Entire Section

  • Percentage ratios (14.07-14.08)

    • 14.07

      The percentage ratios are the figures, expressed as percentages resulting from each of the following calculations:—

      (1) Assets ratio — the total assets which are the subject of the transaction divided by the total assets of the listed issuer (see in particular rules 14.09 to 14.12, 14.16, 14.18 and 14.19);
      (2) Profits ratio — the profits attributable to the assets which are the subject of the transaction divided by the profits of the listed issuer (see in particular rules 14.13 and 14.17);
      (3) Revenue ratio — the revenue attributable to the assets which are the subject of the transaction divided by the revenue of the listed issuer (see in particular rules 14.14 and 14.17);
      (4) Consideration ratio — the consideration divided by the total market capitalisation of the listed issuer. The total market capitalisation is the average closing price of the listed issuer's securities as stated in the Exchange's daily quotations sheets for the five business days immediately preceding the date of the transaction (see in particular rule 14.15); and
      (5) Equity capital ratio — the number of shares to be issued by the listed issuer as consideration divided by the total number of the listed issuer's issued shares immediately before the transaction.

      Notes:

      1. The numerator includes shares that may be issued upon conversion or exercise of any convertible securities or subscription rights to be issued or granted by the listed issuer as consideration.
      2. The listed issuer's debt capital (if any), including any preference shares, shall not be included in the calculation of the equity capital ratio.

      Listed issuers must consider all the percentage ratios to the extent applicable for classifying a transaction. In the case of an acquisition where the target entity uses accounting standards different from those of the listed issuer, the listed issuer must, where applicable, perform an appropriate and meaningful reconciliation of the relevant figures for the purpose of calculating the percentage ratios.

    • 14.08

      The table below summarises the classification and percentage ratios resulting from the calculations set out in rule 14.07. However, listed issuers should refer to the relevant rules for the specific requirements.

      Transaction type Assets ratio Consideration ratio Profits ratio Revenue ratio Equity capital ratio
      Share transaction less than 5% less than 5% less than 5% Less than 5% less than 5%
      Discloseable transaction 5% or more but less than 25% 5% or more but less than 25% 5% or more but less than 25% 5% or more but less than 25% 5% or more but less than 25%
      Major transaction — disposal 25% or more but less than 75% 25% or more but less than 75% 25% or more but less than 75% 25% or more but less than 75% Not applicable
      Major transaction — acquisition 25% or more but less than 100% 25% or more but less than 100% 25% or more but less than 100% 25% or more but less than 100% 25% or more but less than 100%
      Very substantial disposal 75% or more 75% or more 75% or more 75% or more Not applicable
      Very substantial acquisition 100% or more 100% or more 100% or more 100% or more 100% or more

      Note: The equity capital ratio relates only to an acquisition (and not a disposal) by a listed issuer issuing new equity capital.