FINLAND Law and Practice Contributed by: Christoffer Waselius and Niko Markkanen, Waselius
8. Disclosure 8.1 Making a Bid Public
8.3 Producing Financial Statements Pro forma financial information is generally required in prospectuses prepared for stock-for-stock takeo- ver bids and merger-based business combinations. This information is typically presented using the same accounting standards applied by the target company in preparing its financial reports. In contrast, the offer document for a cash takeover bid does not need to include pro forma financial informa- tion. 8.4 Disclosure of Transaction Documents The combination agreement entered into in connec- tion with a voluntary tender offer or a merger is gener- ally not made public. However, in the case of a merger, the merger plan signed by the merging entities must be published when the merger is announced and filed with the Finnish Trade Register. While the combination agreement remains confiden- tial, certain key terms, such as consideration struc- ture and timetable, are typically disclosed in the offer document or prospectus. The board’s role in a business combination is assessed under the general principles of Finnish company law: management, including the board of directors, must act with due care and in the best interests of the com- pany and its shareholders. In practice, the management is expected to secure the most favourable outcome for shareholders in a merger or takeover bid. In merger negotiations, this typical- ly means obtaining the most advantageous merger consideration; in a takeover bid, it involves taking all necessary steps to achieve the best possible offer, including evaluating strategic alternatives. To fulfil this duty, the board must gather adequate information for its assessment and determine whether external advis - ers should be engaged. In a public takeover, the target company’s board must prepare and publish a statement on the bid, recom- 9. Duties of Directors 9.1 Principal Directors’ Duties
A voluntary takeover bid is entirely at the discretion of the offeror and is not triggered by any statutory share- holding thresholds. Once the offeror decides to pro- ceed, the obligation to disclose the bid arises imme- diately. The offeror must disclose the decision without delay and notify the target company in accordance with the requirements of the SMA. In contrast, a mandatory bid obligation occurs when a shareholder’s voting rights in a company listed on a regulated market or a multilateral trading facility at the initiative of the issuer exceed either 30% or 50% of the total voting rights of the target. Once this threshold is crossed, the party obliged to bid must promptly disclose the obligation to bid and publish the manda- tory bid within one month. The takeover bid procedure must commence within one month of publication. The offeror must, in addition to making the bid public, also publish and keep publicly available an offer docu- ment containing material and sufficient information for shareholders to assess the bid’s merits. The offer doc- ument can only be published following approval of the FIN-FSA. Disclosure of the bid must be carried out in a manner ensuring fast and non-discriminatory access to information, and the offeror’s decision to launch a bid must also be reported to the stock exchange. 8.2 Prospectus Requirements For a stock-for-stock takeover bid or a merger-based business combination, a prospectus prepared in accordance with the EU Prospectus Regulation and its delegated acts is generally required. In the case of a cash takeover bid, the offeror is instead required to prepare and make available to the public an offer document containing sufficient details for shareholders to evaluate the bid’s merits. This document must comply with the relevant provisions of the SMA. The FIN-FSA must approve the prospectus or the offer document after which the bidder shall publish the document.
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