NETHERLANDS Law and Practice Contributed by: Jan-Willem van Rooij, Anne Brugmans and Jordy Kusters, Loyens & Loeff
sory acquisition procedure ( uitkoopprocedure ) or pre- wired back-end measures, depending on the amount of shares that were tendered in the public offer. Generally, the offeror declares the offer unconditional once the minimum threshold (often starting at 95% but sometimes lowered to a range between 70–90%) and other offer conditions have been satisfied or waived. If the offeror holds at least 95% of the issued share capital of the target company, the offeror may initiate a compulsory acquisition procedure against the remaining minority shareholders in accordance with the Dutch Civil Code. Dutch practice has evolved such that, provided that certain resolutions have been adopted by the target company’s general meeting pri- or to the end of the offer period, if following the offer, the offeror’s shareholding meets a minimum threshold (see above), the offeror can initiate so-called pre-wired back-end measures to obtain sole ownership of the target company. Such pre-wired back-end measures often take the form of an asset sale or a (cross-border) legal merger ( juridische fusie ). Alternative transaction structures to public offers include inversions, dual-headed structures, joint ven- tures, spin-offs, and reverse takeovers. 4.4 Consideration and Minimum Price Most public offers for shares in Dutch-listed compa- nies across all industries are made in cash, rather than as a stock-for-stock exchange offer. The considera- tion may also consist (in whole or in part) of shares, provided that such shares should also be listed to more objectively determine the value of the shares and the exchange rate. In the case of a friendly public tender offer, the offeror would have negotiated the offer price with the man- agement of the target company, who will have been advised by investment banks through fairness opin- ions. However, if the offeror must make a mandatory offer the offeror would be required to pay a fair or equitable price ( billijke prijs ). The fair price is the high- est price paid by the offeror in the year preceding the announcement of the mandatory offer. If the offeror has not acquired any shares in the preceding year and acquires predominant control due to other cir- cumstances (eg, cancellation of shares), the average
share price during that preceding year will be deemed a fair price. Shareholders may also request the Dutch courts to set a fair price. If, after the announcement, the bidder purchases securities at a higher price than the fair price, that higher “best price” must be paid to all shareholders who validly tender and do not with - draw their shares in the offer. In case a takeover is structured as a legal merger, the consideration will merely consist of shares in the acquiring company, unless it is a cross-border legal merger in which case dissenting shareholders must be offered a right to cash-out. Contingent value rights, or other mechanisms to bridge value gaps in case of valuation uncertainties, may be used but are not typically used in the public takeovers of Dutch-listed companies. 4.5 Common Conditions for a Takeover Offer/ Tender Offer In a friendly takeover, the bidder and target are free to determine the relevant offer conditions. The following four typical offer conditions are most common. • The minimum threshold, being the minimum percentage of share capital and voting rights the offeror may obtain after the offer, when adding up the offeror’s existing capital interest and voting rights and the amount of tendered shares. The min- imum threshold often starts at 95% but, depending on certain resolutions being adopted, is lowered to a range between 70–90%. • Obtaining the applicable regulatory approvals and other clearances (eg, competition clearance). These will have to be determined during the nego- tiations by the offeror and target. • Obtaining all required corporate authorisations from the general meeting of shareholders of the target. • No public announcements having been made for competing public offers. The offer conditions may not include such conditions of which the fulfilment is solely dependent on the will of the offeror (so-called potestative conditions).
285 CHAMBERS.COM
Powered by FlippingBook