Kuwait Issues New Rules For Increasing Company Stakes

Kuwait’s financial regulator issued new rules on Sunday which will allow major shareholders to increase their ownership in listed companies without having to make an offer for all of the shares, a move which could help drive acquisitions.

At present, investors wishing to increase their stake in a company to more than 30 per cent must offer to buy all of its shares under the same price and conditions.

Under the new rules, shareholders with a stake of between 30 and 49 per cent can increase their holding by up to two percentage points without triggering the automatic offer, the Capital Markets Authority (CMA) said.

Shareholders with 50 per cent or more can increase their stake by up to five percentage points without making an offer to all shareholders, the CMA said in a statement.

It said it had looked at other similar stock markets and felt that the new rules would benefit shareholders and the public. It added that the changes were in accordance with the 2010 law which established the CMA, suggesting they came into effect immediately.