BAHRAIN Law and Practice Contributed by: David Walker, Simone Del Nevo, Sherif Saadeldin and Rahul Sud, ASAR - Al Ruwayeh & Partners
of any party that receives confidential, non-publicly available information, along with advisers and con - sultants. 5.4 Standstills or Exclusivity Standstills are somewhat unusual, probably due to the fact that hostile takeovers were traditionally unu - sual if not altogether non-existent, although things are changing in this respect. Standstills – in certain forms at least – could also give rise to an issue of validity under local law. Exclusivity is more commonly demanded and granted. 5.5 Definitive Agreements It is permissible to document the agreements reached between the buyer and the target in the terms of a framework agreement defining the roadmap of the deal, although the exact terms and conditions of the offer would, of course, have to be included in the offer document to be addressed to the shareholders of the target, noting that the board of the target has no pow - er to bind shareholders but can influence their vote by issuing a board circular with its opinion on the offer. 6. Structuring 6.1 Length of Process for Acquisition/Sale Each transaction is different, and different considera - tions arise depending on the circumstances of each transaction. Governmental departments are now operating at full capacity, and transaction timelines have returned to the pre-pandemic transaction time - lines. With regard to private transactions, the timeline for completing the acquisition process differs from one case to another, depending on the nature of the busi - ness to be acquired. While the process of closing non- regulated business acquisitions could be completed within two to three weeks from all required documents being prepared, acquisitions of other regulated busi - nesses that are subject to prior regulatory approvals, including from the CBB, the Ministry of Education, the Council for Regulating the Practice of Engineer - ing Profession, etc, could be closed within five to 16 weeks. If the approval of the CPA is required, the
transaction timeline may be extended for up to anoth - er 60 to 90 days. All takeover offers must be open for acceptance for at least 15 days after becoming or being declared unconditional. The acceptance condition must be sat - isfied within 60 days from posting the offer document. All other conditions must be fulfilled within 15 days of the first closing date or the date on which the offer becomes or is declared unconditional as to accept - ances, whichever is later. A merger will typically imply a shorter timeframe for completion. Competing offers In Bahrain, a mandatory offer is required when: • any person acquires 30% or more of the voting rights of a company, whether by a series of trans - actions over a period of time or not; • two or more persons acting in concert collectively hold less than 30% of the voting rights of a com - pany, and any one or more of them acquires voting rights that increase the holding to 30% or more of the voting rights of the company; and • any person, alone or together with persons acting in concert, is interested in shares that in total carry not less than 30% of the voting rights of a com - pany but does not hold shares carrying more than 50% of such voting rights, and such person, or any person acting in concert with them, acquires addi - tional shares carrying more than 1% of the voting rights in any six-month period. 6.3 Consideration Unless CBB consent has been obtained, a cash offer is required where the bidder has bought – for cash, during the offer period or within three months before its commencement – an interest in shares of any class under offer in the target carrying 10% or more of the voting rights of that class or if in the view of the CBB there are circumstances that render such a course of action necessary. adopt the timetable of the new bidder. 6.2 Mandatory Offer Threshold 6.4 Common Conditions for a Takeover Offer The TMA regulations prohibit an offer from being declared unconditional as to acceptances unless the bidder has acquired over 50% of the voting rights in
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