FINLAND Law and Practice Contributed by: Christoffer Waselius and Niko Markkanen, Waselius
tional on obtaining required regulatory approvals and cannot depend on financing. 4.10 Types of Deal Protection Measures Break fees, matching rights and non-solicitation provi- sions are commonly used. See 4.6 Deal Documenta- tion for further information. 4.11 Additional Governance Rights In Finland, tender offers typically include a minimum acceptance condition of more than 90% ownership, as this threshold grants the bidder the statutory right to initiate compulsory redemption proceedings and acquire all remaining shares and votes (see 4.7 Mini- mum Acceptance Conditions ). If the bidder cannot reach 100% ownership through the tender offer process, governance rights depend on the size of the stake acquired: • With at least 50% of the votes and shares, the bid- der can generally control ordinary resolutions at the general meeting, including the election of the board of directors. • With two-thirds of the votes and shares repre- sented, the bidder gains broader powers, such as approving amendments to the articles of associa- tion, authorising directed share issues, and, in certain cases, approving mergers or demergers. Domination or profit-sharing agreements similar to those in some jurisdictions are not typical. Instead, governance influence is exercised through sharehold- ing thresholds and voting rights. Minority protections under the Finnish Companies Act remain in place, so bidders should anticipate limitations on actions that require unanimity or special majority beyond two- thirds. 4.12 Irrevocable Commitments In order for a tender to be successful, obtaining irrevo- cable commitments from the principal shareholders of the target company may be conclusive and, thus, it is common to aim to ensure the involvement of the principal shareholders in the tender. Negotiations with shareholders are made before public disclosure of the offer. It should be noted that such shareholders will subsequently usually become subject to regulations
on insider trading. The undertakings are usually con- ditional in that they provide an out for the shareholder if a better competitive offer is made, by reserving the shareholder’s right to attend to the competitive offer instead. 4.13 Securities Regulator’s or Stock Exchange Process Before the offer period begins, the offeror must pub- lish and make available to the public an offer docu- ment containing all relevant information about the bid. This document can only be released after approval by the FIN-FSA. The FIN-FSA has five business days from receipt of the document to decide whether it can be published or if amendments are required. The FIN-FSA will approve the offer document if it pro- vides sufficient and essential information on the bid for shareholders to make an informed decision. The FIN-FSA does not typically review or approve the offer price or commercial terms, provided they are lawful and do not breach shareholder equality. If a consor- tium makes the tender offer, it needs to have prelimi- nary discussions with FIN-FSA to enable it to review the consortium structure and offer terms in detail. The statutory offer period must be, in general, at least three weeks and no more than ten weeks. Extensions beyond ten weeks are permitted in certain circum- stances, such as pending regulatory approvals or the announcement of a competing offer, provided the tar- get’s day-to-day operations are not disrupted for an unreasonable period of time. 4.14 Timing of the Takeover Offer Under Finnish takeover rules, the offer period during which target shareholders may accept the bid must generally last at least three weeks and no more than ten weeks (refer to 4.13 Securities Regulator’s or Stock Exchange Process ). According to FIN-FSA guidance, if completion of the bid depends on regulatory approval, such as merger control clearance, the offeror must extend the offer period until the authority has issued its decision and the offeror has had time to evaluate any conditions imposed. The extension may be structured either as continuing “until further notice” or ending on a speci-
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