BELGIUM Law and Practice Contributed by: Thomas Lenné, Mathias Hendrickx, Valentijn de Boe and Bram Devlies, Loyens & Loeff
4. Acquisitions of Public (Exchange- Listed) Energy and Infrastructure Companies 4.1 Stakebuilding It is not uncommon for bidders to acquire a stake in a public company prior to making an offer. Generally speaking, a prospective bidder may acquire shares in the target in the period leading up to a bid. Stake- building on or off the stock exchange is, however, pro- hibited as from the time when the information which the bidder possesses meets the definition of inside information (ie, insider dealing) under the EU Market Abuse Regulation (MAR). Under the MAR, a potential bidder may rely on inside information and therefore engage in insider dealing for the exclusive purpose of proceeding with the bid. A potential bidder cannot, however, rely on insider information for the purposes of stakebuilding, eg, to strengthen its position prior to launching a bid, and stakebuilding based on the decision or (assuming the inside information test is met) intention to launch a public takeover bid, does not constitute legitimate behaviour under the MAR according to the Belgian Financial Services and Markets Authority (FSMA). Every person acquiring, directly or indirectly, securities conferring voting rights, must declare to the target and the FSMA the number and percentage of securities they hold if the same confer 5% or more (and every multiple of 5%) of the voting rights. The disclosure obligation applies both ways, that is, upwards and downwards. The Belgian Transparency Law permits the target to include additional thresholds at 1%, 2%, 3%, 4% or 7.5% in its articles of association. When disclosing such shareholding, it is not required to state the purpose of the acquisition of the stake. On the contrary, a potential bidder is obliged to keep its intentions strictly confidential until it has notified the FSMA of its intention to launch a bid. However, the FSMA may request a person who could be involved in a public takeover bid to announce whether they intend to launch a public takeover bid, if this is required for the proper functioning of the market. Additionally, in case a person, itself or through an inter- mediary, made statements raising questions among
the public regarding its intentions to launch a bid, the FSMA may request that person to clarify their/its intentions within a maximum of ten business days. If such person confirms their/its intentions, they/it must proceed with notifying the FSMA of such intention, in accordance with the requirements set out in Belgian takeover legislation. If such person does not confirm their/its intention to launch a bid within the time limit set by the FSMA, they/it (and their/its persons acting in concert) will have to refrain from launching a bid for In accordance with Belgian public takeover regula- tions, a mandatory offer must be launched once one or more persons acting in concert acquire(s) a stake in excess of 30% of securities granting voting rights of a company listed on a regulated market. 4.3 Transaction Structures Public companies in Belgium may be acquired through various means, such as public takeover offers, legal mergers, or a private sale of a shareholding not exceeding 30% of the securities granting access to voting rights – often leading to a de facto control of the listed company. a period of six months. 4.2 Mandatory Offer The majority of these operations are public tender offers. Legal mergers (with a non-listed company) are very rare in Belgium. The reason can be found in the requirement under Belgian law that the shareholders of the acquired company in a merger must receive shares in the acquiring company and, as the case may be, a cash payment that may not exceed one tenth of the nominal or fractional value of the shares issued. In other words, the shareholders of the acquired com- pany cannot be entirely compensated in cash, which would prevent them from becoming a shareholder of the acquiring company. As such, the mandatory com- pensation in shares in the acquiring company will typi- cally be irreconcilable with the candidate-acquirer’s intention to acquire full control of the listed company. 4.4 Consideration and Minimum Price A considerable majority of public takeover acquisi- tions in Belgium are structured as cash transactions. Both in case of a voluntary bid and a mandatory bid, the offer consideration may consist of either cash or
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