NORWAY Law and Practice Contributed by: Robin Aker Jakobsen, Amund Fougner Bugge, Jan Magne Langseth and Stig Walle, Simonsen Vogt Wiig
• a selective rollover available only to certain exist- ing shareholders, while the remaining shareholders receive cash consideration only; or • an offer allowing all shareholders of the target com- pany to roll over a specified portion of their hold- ings, with the balance settled in cash. Rollover mechanisms provide flexibility in terms of reinvestment and financing. However, to the extent such mechanisms have been used in regulated mar- kets, they have been subject to criticism for raising issues concerning the equal treatment of sharehold- ers (whereas such concern is weaker with regard to MTFs). An offeror will be free to introduce a rollover mecha- nism as part of a voluntary offer. However, if used as part of a mandatory offer, a rollover mechanism will only be legal to the extent that it includes a cash alter- native for all the shares. 4.4 Consideration and Minimum Price In Norway, public company acquisitions in the energy and infrastructure sectors are commonly structured as all-cash transactions. Although share-for-share or mixed consideration has increased during recent years, cash offers are still the most-used offer mecha- nism. In relation to mergers, the consideration is typically shares. However, a cash component of up to 20% of the overall consideration is allowed as part of the merger settlement. As regards mandatory offers, the offer price must at least equal the highest price paid or agreed to be paid by the offeror for shares in the target during the six months preceding the offer obligation. There are no restrictions on price in voluntary offers, either in a regulated market or an MTF. Finally, there is no statu- tory minimum price requirement in statutory mergers, but the board of directors of the target company is required to ensure that the exchange ratio and the consideration are fair to shareholders. It is not typical to use contingent value rights or simi- lar mechanisms in public transactions in the Norwe- gian market. For mandatory offers, this follows from a
requirement that settlement must take place as soon as possible and no later than 14 days after expiry of the acceptance period. For voluntary offers in a regulated market, there is no similar rule. However, in practice, the Norwegian FSA is likely to require that the shareholders who are invited to accept an offer are provided with sufficient information regarding the consideration to be paid upon acceptance; contingent value rights are unlikely to fulfil this requirement. There is more room for contingent value rights in an offer on Euronext Growth Oslo but, so far, the authors have not seen this in practice. This may also be due to practical challenges with such pricing models in a public environment. 4.5 Common Conditions for a Takeover Offer/ Tender Offer Voluntary offers typically include conditions such as: • a minimum acceptance level at 90% (allowing the bidder to complete a compulsory acquisition and subsequent delisting); • the target board recommends the offer to its shareholders and maintains such recommendation throughout the acceptance period, • necessary approvals from public authorities (eg, typically from the Norwegian Competition Authority (NCA)); and • the absence of any company-specific material adverse change (MAC) affecting the target or the offer. Mandatory offers, however, must be unconditional and irrevocable. Once the mandatory offer obligation is triggered under the Norwegian Securities Trading Act, the bidder must make an offer to acquire all remaining shares on the same terms as those already acquired and may not attach any conditions to completion. In practice, the Norwegian FSA requires that condi- tions are specific and objectively verifiable, such as competition clearance or a fixed acceptance thresh- old. Broad or subjective conditions (eg, “to the bid- der’s satisfaction” or “no adverse market changes”) are generally not acceptable.
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