BAHRAIN Law and Practice Contributed by: David Walker, Simone Del Nevo, Sherif Saadeldin and Rahul Sud, ASAR - Al Ruwayeh & Partners
9.5 Directors’ Ability to “Just Say No” The board can refuse to engage in discussion with a would-be bidder, but the latter could still seek to acquire control by launching a voluntary offer. In this case, the board could recommend the shareholders not to accept the offer, but the ultimate decision would rest with the shareholders. 10. Litigation 10.1 Frequency of Litigation Litigation in the field of M&A is generally rare in Bah - rain. 10.2 Stage of Deal Lawsuits can occur at any time, both prior to closing and post-closing. 10.3 “Broken-Deal” Disputes As far as is known, there have been no recent disputes between parties with transactions pending. 11. Activism 11.1 Shareholder Activism There is no significant shareholder activism in Bahrain. 11.2 Aims of Activists Activists do not appear to seek to encourage compa - nies to enter into M&A transactions. 11.3 Interference With Completion As far as is known, there are no cases where sharehold - ers have sought to stop the progress of announced transactions.
the approval by the shareholders of the target, nor may any action be taken that results in the sharehold - ers of the target being denied an opportunity to decide on the merits of an offer. In particular, the target’s board must not, without shareholders’ approval, do or agree to do the follow - ing: • issue any shares; • create, issue or grant, or permit the creation, issue or grant, of any convertible securities, options or warrants in respect of shares of the target; • sell, dispose of or acquire assets of a material amount, other than during the normal course of business; • enter into contracts, including service contracts, other than in the ordinary course of business; or • cause the target or any subsidiary or associated company to purchase or redeem any shares in the target or provide financial assistance for any such purchase. 9.3 Common Defensive Measures Without approval by the shareholders of the target, a board of the target may consider the following pos - sible anti-takeover defences or impediments: • encouraging shareholders not to accept the offer. In the case of a merger, the non-co-operation of the target’s board could prevent the merger from complet - ing. In such instances, the hostile bidder would nec - essarily have to launch a contractual takeover offer. 9.4 Directors’ Duties The directors are under the overarching duty to act in the sole interest of the shareholders, and this duty is clearly enshrined in the TMA regulations. This duty is not “new” as it stems from the general fiduciary duties of the directors. • denying due diligence access; • soliciting competing offers; and
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