DENMARK Law and Practice Contributed by: Jakob Østervang, Peter Østergaard Nielsen, Anders Hørlyck Jensen and Tejs Degn Leth Ernst, Accura Advokatpartnerselskab
pany’s business or financial condition until comple- tion of the tender offer. • Board recommendation that the board in the target company recommends the offer and does not revoke or modify its recommendation of the offer. • No breach that the target company does not breach any (transaction) agreement entered into between the offeror and the target company. • A mandatory tender offer: this must not contain any conditions. 4.6 Deal Documentation It is customary in Denmark to enter into a transac- tion agreement in connection with a takeover offer or business combination. This agreement, often referred to as a transaction agreement (TA) or a business com- bination agreement (BCA) depending on the transac- tion, outlines the terms and conditions of the offer and the obligations of both parties. Obligations of the Target Company Beyond the board’s agreement to recommend the offer, the target company can undertake certain other obligations, including: • Agreeing not to solicit or engage in discussions with other potential buyers (no-shop clause). • Providing the acquirer with access to necessary information for a certain level of due diligence. • Agreeing to operate in the ordinary course of busi- ness and not undertake any significant changes without the offeror’s consent. • Assisting in obtaining necessary regulatory approv- als for the transaction. Representations and Warranties In takeovers, it is – as a general rule – not possible for the target company to give representations and war- ranties with recourse against the company. However, representation and warranties can be provided as condition precedents or if backed by a W&I insurance. 4.7 Minimum Acceptance Conditions In Denmark, the minimum acceptance condition for tender offers is typically set at 90% or two-thirds of the voting rights. This threshold is significant for several reasons:
• achieving more than 90% allows the offeror to initiate a squeeze-out procedure, compelling the remaining minority shareholders to sell their shares, whereby the offeror gains full control of the com- pany; and • achieving 90% allows the offeror to request the removal of the public company from trading on the Nasdaq Copenhagen. Two-thirds of the voting rights gives the offeror opera- tional control over the company. Please refer to 4.11 Additional Governance Rights . 4.8 Squeeze-Out Mechanisms The squeeze-out mechanism allows a majority share- holder to compel minority shareholders to sell their shares following a successful tender offer provided that the offeror after completion of the offer holds more than 90% of the shares and voting rights in the target company. Procedure The offeror must notify the remaining minority share- holders of its intention to exercise the squeeze-out right at the latest no later than three months after the expiration of the offer period. The redemption price offered to the minority share- holders must be fair, and typically matches the price offered in the initial tender offer. If the minority share- holders disagree on the offered price, they can request an independent expert to determine the price under certain conditions. However, if the redemption follows a voluntary offer, the price is considered fair in all cir- cumstances if the offeror, upon acceptance of the offer, has acquired at least 90% of the share capital. If the redemption follows a mandatory offer, the con- sideration offered is deemed fair in all circumstances. Minority shareholders must determine within a four-week acceptance period whether they accept compulsory redemption, including the redemption price. If they do not respond within this period, their shares will be noted as registered under the offeror in the company’s shareholder register. If all minority shareholders have not transferred their shares to the redeeming shareholder within the deadline, the offeror must, as soon as possible, unconditionally deposit
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