FINLAND Law and Practice Contributed by: Christoffer Waselius and Niko Markkanen, Waselius
prevent, postpone or frustrate the completion of the tender offer. • The board of directors of the target company has issued its recommendation to the shareholders to accept the offer and the recommendation remains valid. • The combination agreement entered into by the offeror and the target has not been terminated. According to the guidelines of the FIN-FSA, the offeror shall not invoke a condition to the completion of a tender offer unless the non-fulfilment of such condi- tion has a material impact for the offeror in view of the tender offer, as such action by the offeror would frustrate or materially impede the implementation of the tender offer. 4.6 Deal Documentation An agreement is usually entered into in connection with a public takeover. Typical terms are undertakings concerning the conduct of business and customary representations and warranties, for example: • undertaking to inform the offeror of any possible competing offers; • undertaking to provide the offeror with an opportu- nity to improve their offer terms, including the offer price, in case of a superior competing offer (match- ing right); • undertaking to reimburse the offeror for certain documented expenses and costs following a termi- nation of the combination agreement under certain circumstances (break fee); and • non-solicitation undertaking regarding any compet- ing offers. A combination agreement is typically entered into in connection with a merger. 4.7 Minimum Acceptance Conditions Typically, a minimum acceptance condition of an acceptance exceeding 90% is required in public ten- der offers. This is due to the fact that, under the Finn- ish Companies Act, once a shareholder has a holding exceeding 90% of the shares and votes, such share- holder has the right and obligation to redeem all out- standing shares.
There have been cases where tender offers have been lower than 90% due to weak preliminary results or competing bids. 4.8 Squeeze-Out Mechanisms Once a shareholder has a holding exceeding 90% of the shares and votes, such shareholder has the right to redeem all outstanding shares. Conversely, a minority shareholder has a right to demand that the majority shareholder redeem their shares. The redeeming majority shareholder shall notify the company of the commencement and termination of redemption proceedings and the company shall notify the Finnish Trade Register of the same. If the offeror intends to reach the 90% threshold in connection with a public tender offer, the potential intention to demand a squeeze-out of minority shares must be disclosed in the offer documents. Once the offeror acquires more than 90% of the shares and voting rights in the target company, it must initiate the squeeze-out process without undue delay. The process is technical and time-consuming, involv- ing several legal and administrative steps, including formal notifications, documentation, and communica- tion with minority shareholders. In most cases, the redemption price determination is handled through a statutory arbitration procedure under the Finnish Companies Act. 4.9 Requirement to Have Certain Funds/ Financing to Launch a Takeover Offer The offeror must, before launching its tender offer, ensure it can deliver the promised consideration. For cash offers, this means having sufficient funds availa- ble or entering into financing agreements that provide a high degree of certainty – ie, the lender shall not be allowed to withdraw unilaterally. However, the offeror does not need to hold the funds at launch; financing arrangements may be conditional on the offer being completed according to its terms. A voluntary tender offer may include a condition relat- ing to financing availability up until completion. By contrast, a mandatory tender offer can only be condi-
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