DENMARK Law and Practice Contributed by: Jakob Østervang, Peter Østergaard Nielsen, Anders Hørlyck Jensen and Tejs Degn Leth Ernst, Accura Advokatpartnerselskab
to purchase their shares, often at a premium to the market price. The offeror will typically approach the board of directors of the target company and, in cer- tain cases, the target company’s major shareholders prior to making any announcement of a tender offer in order to secure a certain acceptance for the offer and, thereby, a certain level of deal certainty. The objective of the offeror is often to obtain a defined acceptance level to gain control over the target company – eg, a 90% acceptance level with the purpose of squeezing out minority shareholders and potentially removing the company’s shares from trading after completion of the tender offer. As such, a transaction agreement with the company and irrevocable undertakings with major shareholders may be entered into prior to making the tender offer and preparing the actual offer document. Merger It is possible to acquire a public company through a merger, but such transactions are less common com- pared to public tender offers. Mergers often require more complex negotiations and approvals, including shareholder approvals at the general meetings of the companies involved, which can be time-consuming compared to a public tender offer. Moreover, while a tender offer can be used as a strategic move to gain control without immediate full integration, a merger typically leads to full integration and a greater degree of operational and strategic cooperation between the merging entities. 4.4 Consideration and Minimum Price In Denmark, public company acquisitions in the tech- nology industry can be structured as either cash or share based transactions. Both methods are used, but cash transactions are sometimes preferred due to their simplicity and the immediate liquidity they pro- vide to shareholders. In particular, cash is often used when the acquirer is a larger strategic buyer with suffi- cient liquidity, seeking to gain control without immedi- ate full integration. Stock-for-stock transactions may also be used, especially in mergers between equals or where the buyer seeks to preserve cash or align long-term interests. Use of Cash in Merger Transactions Cash is permissible and commonly used in merger transactions, not just in takeover offers and tender
offers. In Denmark, consideration in a merger or a mandatory takeover offer can be provided in cash, shares, or a combination of both. This flexibility allows parties to structure the deal in a way that best suits their financial strategies and shareholder preferences. Minimum Price Requirement For mandatory tender offers, a minimum price require- ment applies whereby the offer price must be at least equal to the highest price paid by the offeror for any shares within the six months preceding the offer. In a voluntary tender offer, there is no minimum price requirement. However, the offeror must treat all share- holders equally. In terms of mergers, no specific minimum price requirements apply. While there is no explicit mini- mum price, the valuation of shares in a merger must be fair and reasonable. This is often ensured through independent financial advisors who provide fairness opinions. Bridging Value Gaps with Contingent Value Rights Bridging value gaps with contingent value rights is not common in transactions involving an acquisition of a Danish listed company. 4.5 Common Conditions for a Takeover Offer/ Tender Offer In Denmark, a voluntary tender offer can include con- ditions provided that the fulfilment of these is not within the control of the offeror, except that the offer cannot be conditional upon financing. The Danish FSA often approves the following (non- exhaustive) common conditions: • Minimum acceptance level often set at 90%, ensur- ing that the offeror gains sufficient control over the target company, which enables a squeeze-out of the minority shareholders and potential removal from trading post completion of the tender offer. • Regulatory approvals necessary clearances from competition authorities and other relevant regula- tory bodies. • No material adverse change ensuring that there are no significant negative changes in the target com-
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