PHILIPPINES Law and Practice Contributed by: Rose Marie M. King-Dominguez, Melyjane G. Bertillo-Ancheta and Franco Aristotle G. Larcina, SyCip Salazar Hernandez & Gatmaitan
Other Required Disclosures Moreover, the forms require a description of any con - tract, arrangement, understanding or relationship among the reporting persons and between those persons and anyone with respect to any securities of the issuer. This includes the transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or with - holding of proxies, naming the person with whom the contracts, arrangements, understandings or relation - ships have been agreed. The forms also require information for any of the securities that are pledged or otherwise subject to a contingency that would give another person voting power or investment power over the securities. The disclosure of standard default and similar provisions contained in loan agreements need not be included, however. In addition, the forms require the submission of copies of all written agreements, contracts, arrangements, understandings, plans or proposals relating to the acquisition of issuer control, liquidation, the sale of assets, a merger, or a change in business or corpo - rate structure, or any other matter as disclosed in the report, as well as the transfer or voting of the securi - ties, finder’s fees, joint ventures, options, puts, calls, guarantees of loans, guarantees against losses or the giving or withholding of any proxy. A target entity is required to disclose a deal when the information ceases to be soft information, which is indefinite in nature. Under PSE rules, soft information may, depending on certain facts and circumstances, include uncertainties and developments in process, incomplete proposals or preliminary negotiations, or corporate transactions in the planning stage or bid submissions. A listed company will typically take the position that information ceases to be soft information only when the board of directors of the listed company has 5. Negotiation Phase 5.1 Requirement to Disclose a Deal
approved the transaction (to the extent it is a party to the transaction), or if it acquires verifiable informa - tion of the corporate approval of the contemplated transaction or signing of the definitive agreements, whichever is earlier. 5.2 Market Practice on Timing In most instances, market practice does not differ from legal requirements, although whether an actual disclosure is compliant with the requirements will depend on facts and circumstances. 5.3 Scope of Due Diligence Where a potential investor or buyer is seeking to acquire a controlling stake or a significant majority in a local enterprise, full due diligence is usually carried out. This covers all key legal areas – eg, corporate ownership and governance, licences and regulatory matters, material contracts, debts and liens, financing, property (including intellectual property) and insur - ance, tax, material litigation and employment matters. The investor or buyer would also conduct financial due diligence. During the pandemic, certain situations called for greater emphasis on employment matters, scope of insurance coverage, and force majeure clauses and it was prudent to look into compliance with the various laws and regulations relating to COVID-19. 5.4 Standstills or Exclusivity It is more typical for the potential buyer to require exclusivity than standstills. However, the purchase agreement will usually provide for standstill provisions from signing until closing. 5.5 Definitive Agreements There is nothing in the law or regulations preventing parties from documenting the tender offer terms and conditions in the definitive agreement for the private sale that will trigger the requirement to make the man - datory tender offer. The definitive agreement (eg, a share sale and purchase agreement between a prin - cipal stockholder and acquirer) will typically make a general reference to the completion of the tender offer as a condition precedent to the closing of the (private) share sale and purchase transaction. The terms and conditions of the offer are set out in SEC Form 19-1,
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