When an investor wishes to take over or increase its stake in a Vietnamese public company beyond a certain threshold, the law does not allow quiet, gradual market accumulation — it requires a public tender offer. This procedure protects minority shareholders, and violations can lead to the entire share acquisition being sanctioned. How does the public tender offer procedure work?
Trigger threshold: 25% of voting shares
Under Article 35 of Securities Law No. 54/2019/QH14 (as amended by Law No. 56/2024, still in force), the public tender offer obligation arises when an organization or individual expects to own 25% or more of the voting shares of a public company.
The critical point in calculating the 25% threshold: it must aggregate shares held by related persons and indirect ownership (held through other entities). Many investors breach the threshold unknowingly because they count only shares in their own direct name, omitting shares held by subsidiaries, affiliates, or related persons.
Follow-on thresholds: 35%, 45%, 55%, 65%, 75% — and the 80% obligation
The tender offer obligation does not arise only once. After the first offer, each time ownership crosses each subsequent threshold — 35%, 45%, 55%, 65%, 75% of voting shares, the organization or individual must conduct a new public tender offer.
There is also a special obligation: having acquired 80% or more of the public company’s voting shares within 30 days, the organization or individual has the obligation to continue purchasing remaining shares at shareholders’ request. This is an “exit” mechanism protecting minority shareholders when the company has been nearly fully taken over.
Three-step procedure: filing — disclosure — SSC confirmation
The registration procedure for public tender offers is prescribed in Article 86 of Decree 155/2020/ND-CP, as amended by Decree 245/2025/ND-CP (effective from 11/9/2025):
Step 1 — Filing: the tender offeror submits the tender offer registration dossier to the State Securities Commission (SSC) and simultaneously to the target company.
Step 2 — Target company disclosure: within 03 working days of receiving the registration dossier, the target company must disclose information about the received tender offer on its website and the Stock Exchange.
Step 3 — SSC confirmation: within 07 working days of receiving a valid dossier, the SSC notifies the offeror in writing and publishes on the SSC website that the complete tender offer registration dossier has been received; in case of refusal, it must reply in writing stating the reasons.
Source note: the 07-working-day timeline above is based on Clause 32, Article 1 of Decree 245/2025/ND-CP amending Clause 3, Article 86 of Decree 155/2020/ND-CP — shortened from 15 days under the old rules with effect from 11/9/2025. When proceeding, always check the latest official text, as procedural rules may be further amended.
Equal treatment: the backbone of the tender offer regime
The entire tender offer regime is built around the principle of equal treatment of all shareholders:
- Tender offer terms (price, payment method, duration, etc.) must apply equally to all shareholders holding the same class of shares — no preferential treatment for any group;
- During the tender offer period, the offeror may not withdraw the offer and may not amend the offer terms to shareholders’ disadvantage.
Breaching this principle not only exposes the offer to sanctions but also destroys market confidence — something the regulator monitors closely.
Offer price: not lower than market price or fair value
On pricing, the law requires fairness: the offer price must not be lower than the market price or fair value of the shares. Detailed pricing principles are set out in Decree 155/2020/ND-CP (including amendments — among them Decree 245/2025/ND-CP).
In practice, determining “fair value” often requires an independent valuation, especially for illiquid shares. Offerors should prepare the valuation approach early, as this is a part of the dossier the SSC scrutinizes closely.
Key takeaways for buyers
- The tender offer obligation triggers at 25% of voting shares, aggregating related persons and indirect ownership.
- Each crossing of 35%, 45%, 55%, 65%, 75% requires a new public tender offer; reaching 80% within 30 days creates an obligation to continue purchasing remaining shares.
- Three-step procedure: file with the SSC and the target company, target discloses within 03 working days, and the SSC confirms within 07 working days of receiving a valid dossier (Clause 32, Article 1, Decree 245/2025/ND-CP).
- The equal-treatment principle governs everything: identical terms for all shareholders, no withdrawal, and no adverse amendments during the offer period; the offer price must not be lower than market price or fair value.
Frequently asked questions
Does the 25% threshold aggregate related persons’ shares?
Yes — it aggregates related persons and indirect ownership. Omission is a common cause of inadvertent tender offer breaches.
After a tender offer at 25%, is a new offer needed at 40%?
Yes — crossing the 35% threshold requires a new public tender offer, and likewise for the 45%, 55%, 65%, and 75% thresholds.
How long does SSC confirmation take?
07 working days from receipt of a valid dossier, under Clause 32, Article 1 of Decree 245/2025/ND-CP (effective 11/9/2025).
Applicable legal sources
- Securities Law No. 54/2019/QH14 — Article 35 (public tender offers), as amended by Law No. 56/2024 — still in force.
- Decree No. 155/2020/ND-CP — Article 86 (tender offer registration procedure), as amended by Clause 32, Article 1 of Decree No. 245/2025/ND-CP — effective from 11/9/2025.
Planning a takeover or stake increase in a public company? Contact FLAT Law Firm for tender offer advice.
The legal content of this article was reviewed by FLAT’s AI Legal Council and submitted to the owner for approval; it is not the opinion of a human lawyer and does not replace legal advice for specific cases.
For reference only; not legal advice.