EGYPT Law and Practice Contributed by: Nadia Abdallah, Zahra Ashraf, Beshoy Mounir and Yasmine Attia, Matouk Bassiouny & Hennawy
8. Disclosure 8.1 Making a Bid Public
8.2 Prospectus Requirements A prospectus is required only when a company car- ries out an IPO. Stock-for-stock takeover offers and business combinations do not require a prospectus. There are no legal obligations requiring the buyer to list its shares in either the home or foreign markets. 8.3 Producing Financial Statements There are no legal obligations requiring bidders to pro- vide financial statements. However, Egyptian compa- nies are required to prepare their financial statements in accordance with Egyptian Accounting Standards and have them audited by a registered auditor in accordance with the applicable statutory timelines set out under the Companies Law. 8.4 Disclosure of Transaction Documents Parties are not required to file copies of the trans- action documents per se. However, certain authori- ties may require or request a copy or summary of the transaction documents (eg, the Egyptian Competition Authority). No specific directors’ duties apply solely in relation to business combinations. The general duties imposed on directors under the Companies Law apply through- out their tenure. Directors are responsible for manag- ing the company and performing all necessary acts to achieve its objectives, while observing the following duties, among others: • duty of care: (a) exercise due care and diligence in performing their duties; (b) avoid conflicts between personal interests and the company’s interests, and disclose any such conflicts to the board, ensuring they are recorded in the meeting minutes; (c) devote adequate time and attention to the company’s affairs and avoid assuming perma- nent executive roles in other joint stock compa- nies without general assembly approval; (d) attend and actively participate in board meet- ings; and 9. Duties of Directors 9.1 Principal Directors’ Duties
Tender offers shall be disclosed to the EGX and the FRA by the offeror, the target company and the main shareholders holding more than one-third of the tar- get’s share capital (the “Main Shareholders”), as fol- lows. Offeror’s Notification The offeror must notify the FRA and the EGX when an MTO may be triggered. This disclosure requirements shall be triggered, inter alia, under the following cir- cumstances: • the offeror announces its intent to acquire shares and informs the target; • conditions triggering the MTO are fulfilled, as out- lined in 4.2 Mandatory Offer ; • the offeror seeks preliminary approval requests to authorities for the acquisition; and/or • market rumours or unusual share movements sug- gest a potential tender offer. Target’s Notification Obligation The target company must also notify the FRA if, for instance: • it receives notice of the offeror’s intent to launch an MTO; • any binding or non-binding MOU, LOI, or similar agreement is signed; • an agreement to conduct due diligence is signed; or • serious negotiations on a potential MTO are taking place. Main Shareholders Notification Obligation Any shareholder holding more than one-third of the target’s capital must notify the FRA if, inter alia: • any of the target company’s disclosure triggers above occur; and/or • such shareholder enters into a binding or non- binding agreement(s) with the offeror, which has not been disclosed to the target company.
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