Document background
A Letter of Intent to Purchase Shares is commonly used in Malaysian corporate transactions as a preliminary step before entering into a definitive share purchase agreement. This document is typically used when a potential buyer has identified a target company and wishes to formally express their interest in purchasing shares while setting out the basic terms of the proposed transaction. It serves multiple purposes: demonstrating serious intent, establishing a framework for negotiations, and outlining key terms such as purchase price, exclusivity period, and due diligence requirements. While generally non-binding, certain provisions like confidentiality and exclusivity are typically binding. The document must comply with Malaysian legislation, including the Companies Act 2016, Capital Markets and Services Act 2007, and relevant securities regulations. It's particularly important in complex transactions or when dealing with multiple shareholders, as it helps align parties' expectations and provides a roadmap for the transaction.
