EGYPT Law and Practice Contributed by: Nadia Abdallah, Zahra Ashraf, Beshoy Mounir and Yasmine Attia, Matouk Bassiouny & Hennawy
Approval of the Offer Price by the FRA The offer price is submitted to the FRA as part of the MTO Draft. Please refer to the pricing conditions in 4.4 Consideration of the Minimum Price . MTO Duration The validity duration of the MTO (MTO Duration) shall commence on the business day immediately following the publication of the MTO. The MTO Duration shall not exceed 30 business days (except for the case of competing tenders) and shall not be less than ten business days. However, in the event the target company is obliged to appoint an IFA, the MTO Duration shall not be less than 20 business Please refer to 4.13 Securities Regulator’s or Stock Exchange Process for details on the extension of the MTO Duration. Timeline for Obtaining Regulatory Approvals If any of the thresholds in 4.2 Mandatory Offer are like - ly to be triggered, the offeror must promptly notify the FRA and the EGX that an MTO is likely to be triggered. In such case, since applicable regulatory approvals are obtained prior to launching the MTO, the notifica- tion to the FRA and the EGX should be made in case of the submission of requests by the offeror to the relevant authorities to obtain their preliminary regula- tory approvals on the envisioned acquisition. 4.15 Privately Held Companies Privately held companies in Egypt may be acquired either through a share purchase (including by way of merger or acquisition) or an asset purchase. Such transactions may require the relevant corporate approvals from the target company, as well as all applicable regulatory and/or contractual approvals, which vary depending on the sector, in addition to any antitrust approvals in accordance with 5.5 Anti- trust Regulations . days from the commencement date. 4.14 Timing of the Takeover Offer MTO Duration For joint stock companies, the share transfer must be executed before the EGX via a licensed Egyptian bro- ker following completion of all required account open-
the agreement of the parties and are determined on a case-by-case basis. 4.11 Additional Governance Rights The statutory governance rights a bidder can obtain would generally depend on the percentage acquired in the company’s share capital (control over the board, ordinary and extraordinary general assembly meet- ings, etc, and consequently, controlling the decision- making arm of the company). Notwithstanding the foregoing, contractual rights also depend on the commercial agreement of the relevant parties. For minority acquisitions, reserved matters requiring the bidder’s prior consent or granting the same a veto right are common, along with other cus- tomary minority protections such as a tag-along right and other priority rights in future exits. Bidders acquir- ing a majority stake may be granted control over the board of directors, accompanied by other contractual protections, such as a drag-along right. 4.12 Irrevocable Commitments It is common to obtain irrevocable commitments from principal shareholders of the target company to ten- der or support the transaction. Such undertakings are contractual in nature and may trigger the principal shareholder’s liability if they tendered their shares for a better offer submitted by another offeror. However, the undertaking/commitment is merely con- tractual, and the principal shareholder may still opt to back out of the transaction, regardless of the con- tractual liability. 4.13 Securities Regulator’s or Stock Exchange Process FRA Review of the MTO Draft Within two business days of the submission of the MTO Draft, the FRA must issue its decision on the MTO Draft to either (i) approve the MTO Draft; (ii) reject the MTO Draft; or (iii) request submission of further information, documents, or amendments of the MTO Draft (Requested Information). Upon submission of the Requested Information by the Offeror, the FRA shall issue its decision on the MTO Draft no later than two business days as of the said submission.
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