PHILIPPINES Law and Practice Contributed by: Rose Marie M. King-Dominguez, Melyjane G. Bertillo-Ancheta and Franco Aristotle G. Larcina, SyCip Salazar Hernandez & Gatmaitan
the exercise of such options also being dependent on the fulfilment of performance-based conditions. 6.4 Common Conditions for a Takeover Offer The terms and conditions of a mandatory tender offer should be compliant and not inconsistent with the regulations. Among the regulatory requirements is that no tender offer shall be made unless it is open to all security holders of the class of securities subject to the offer, and the consideration paid to any security holder within the offer must be the highest paid to any other security holder during a tender offer. Moreo - ver, the offeror is compelled to offer the highest price paid by them for the securities during the preceding six months. If the offer involves payment by transfer or allotment of securities, they must be valued on an equitable basis. Unless a special exemptive relief is obtained, the regu - lator will not allow the imposition of certain conditions in the tender offer if these conditions are inconsistent or will result in the violation of the regulations of the offer. 6.5 Minimum Acceptance Conditions Voluntary Tender Offer In a voluntary tender offer, the tender offer documents may contain a condition that a minimum number of shares must be tendered in order for the bidder to accept the tender offer shares. The minimum number varies and would depend on the goals of the bidder and the amount of shares held by the bidder prior to the tender offer. 35% Mandatory Tender Offer Threshold Regarding any person, or group of persons acting in concert, who intends to acquire 35% of the out - standing voting shares or sufficient outstanding voting shares to gain control of the board in a public com - pany in one or more transactions within 12 months, that person, or group of persons, is required to make a tender offer for the percentage sought to all holders of the securities within that period. If the tender offer is oversubscribed, the aggregate amount of securities to be acquired at the close of the offer must be proportionately distributed across selling shareholders, with whom the acquirer may
have been in private negotiations, and other share - holders. The last sale that meets the threshold will not be consummated until the closing and completion of the tender. Regarding any person, or group of persons acting in concert, who intends to acquire 35% of the out - standing voting shares or sufficient outstanding vot - ing shares to gain control of the board in a public company directly from one or more stockholders, that person, or group of persons, is required to make a tender offer for all the outstanding voting shares. The sale of shares from the private transaction or block sale will not be completed prior to the closing and completion of the tender. 50% Mandatory Tender Offer Threshold Any acquisition that will result in ownership of over 50% of the total outstanding equity securities of a public company requires the acquirer to make a ten - der offer for all the outstanding equity securities to all remaining stockholders of the company at a price supported by a fairness opinion of an independent financial adviser or equivalent third party. The acquirer in such a tender shall be required to accept all securi - ties tendered. 6.6 Requirement to Obtain Financing The regulations on mandatory tender offers require the tender report to include confirmation by the offeror’s financial adviser or another appropriate third party that the resources available to the offeror are sufficient to satisfy full acceptance of the offer. Moreover, the regu - lations require that before any announcement of an intention to tender is made, the offeror should have the resources to implement the offer in full. 6.7 Types of Deal Security Measures A bidder typically seeks any or a combination of these security measures:
• break-up fees; • match rights; • force-the-vote provisions; • non-solicitation provisions; and • exclusivity.
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