NORWAY Law and Practice Contributed by: Robin Aker Jakobsen, Amund Fougner Bugge, Jan Magne Langseth and Stig Walle, Simonsen Vogt Wiig
4.6 Deal Documentation In Norway, it is customary for the bidder and the tar- get company to enter into a transaction agreement in connection with a recommended voluntary takeover offer or a business combination. Such agreements typically regulate the conduct of the parties during the offer period and the target’s board of directors’ recommendation of the offer. The target company typically undertakes limited obli- gations to facilitate the offer, such as: • access to information to conduct due diligence; • agreeing to conduct the business in the ordinary course between signing and closing; • providing non-solicitation undertakings (not to actively solicit competing offers); • granting the bidder a matching right if a superior competing offer is received; and • agreeing to disclose or support filings required for regulatory approvals. However, the Norwegian regulators expect that such undertakings must not unduly restrict the board of directors’ ability to act in the best interests of the shareholders and emphasise that “no-shop” and break-fee provisions must be reasonable and not pre- vent superior offers. It is uncommon for a Norwegian public company to provide representations and warranties connected to a takeover offer. To be valid, any such representations must be accepted by the board of directors and can- not be in conflict with applicable financial assistance regulations. The authors have been involved in discus- sions on establishing representations and warranties covered by warranty and indemnity (“W&I”) insurance connected to public bids and believe this could be a viable solution to the issue. 4.7 Minimum Acceptance Conditions Voluntary tender offers for listed companies common- ly include a minimum acceptance condition of at least 90% of the shares and voting rights in the target com- pany. This level corresponds to the statutory thresh- old for compulsory acquisition (squeeze-out) under the Norwegian Public Limited Liability Companies
Act, which allows the bidder to acquire the remaining minority shares and subsequently delist the company. The bidder may also set a lower acceptance thresh- old. If the threshold is set to more than 50% of the voting rights, this provides simple majority control at the general meeting and the ability to elect the board of directors. Higher thresholds (eg, two-thirds) may also be used to secure the ability to approve mergers, amend the issuer’s articles of association, or increase the share capital through issuance of new shares – given that these matters require such qualified major- Any shareholder owning more than 90% of both the share capital and voting rights of a Norwegian lim- ited liability company is entitled to require compulsory acquisition of the remaining shares. Minority share- holders holding less than 10% have a corresponding right to require a majority shareholder holding at least 90% to buy their shares on the same terms. ity under Norwegian corporate law. 4.8 Squeeze-Out Mechanisms These rules apply equally in a regulated market and in an MTF. According to the Norwegian Securities Trad- ing Act, where compulsory acquisition takes place in a regulated market within three months after the expiry of the acceptance period for the bid, the redemption price must in principle be equal to the bid price. Also, in an MTF (and, in particular, where the squeeze-out takes place quite shortly after the bid expires), the bid price makes a natural basis for the squeeze-out price unless it does not reflect the fair value of the shares. 4.9 Requirement to Have Certain Funds/ Financing to Launch a Takeover Offer In order to launch a mandatory offer (in a regulated market), the bidder must have financing in place before the launch of the offer, as there is a requirement that the offer document includes a bank guarantee or equivalent confirmation from a reputable financial institution securing full settlement of the offer. Voluntary offers are not subject to a statutory fund requirement. However, in relation to both a voluntary or mandatory offer in a regulated market, the offer document must specifically state how the purchase of the shares is to be financed and what guarantees
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