PORTUGAL Law and Practice Contributed by: Bernardo Abreu Mota, David Oliveira Festas and Francisco Albuquerque Reis, CS’Associados
requirement to address or remedy any material issues arising therefrom which are considered essential for the deal to take place. Resorting to W&I insurance is increasingly common if the time for the underwriting process is not factored into the transaction calendar, as it may amount to additional delays in the implemen - tation of the transaction. In the acquisition of listed companies, specific timing requirements regarding takeover procedures should be considered. In particular, it should be noted that the offer period lasts between two and ten weeks, in accordance with the Portuguese Securities Code. However, should any unusual circumstances arise, this period may be extended well beyond the statu - tory maximum. 6.2 Mandatory Offer Threshold The mandatory offer thresholds in Portugal are set at one third or one half of the voting rights represent - ing a public company’s share capital, calculated in accordance with the relevant voting aggregation rules. However, the duty to launch a mandatory offer will not be precipitated if the person under such duty proves that they do not control the target company. 6.3 Consideration Consideration is usually paid in cash. However, an asset swap as consideration is not uncommon and has been used in some high-profile transactions. The Portuguese Securities Code also allows for shares or other securities (already issued or to be issued) to be awarded as consideration within public takeover offers, provided that they have suitable liquidity and may be easily evaluated. In any event, and specifically in respect of manda - tory takeover offers, there are stricter requirements for consideration to consist of shares or other securities, which must be of the same type as those targeted by the offer and must also be listed in a regulated market or be of the same category as securities of proven liquidity listed in a regulated market. Further - more, the offering bidder or any related entity must not have acquired or undertaken to acquire any shares of the targeted company against consideration in cash within the six months prior to the preliminary takeover announcement and until the offer is completed.
In different deal environments or industries, the high valuation uncertainty tools used to bridge value gaps between the parties may vary and include, for instance, material adverse change clauses, price adjustment mechanisms or earn-outs. 6.4 Common Conditions for a Takeover Offer The offeror is obliged to launch the takeover offer under similar or more favourable terms and conditions than those described in the preliminary announcement of the offer. Nonetheless, the offeror may subject the offer to certain conditions, excluding those that would need to be met by the offeror, as long as such condi - tions correspond to a legitimate interest of the offeror and are not deemed to affect the regular functioning of the market. All conditions must be set out in the preliminary announcement of the offer. In mandatory bids, the Portuguese Securities Code imposes certain rules on minimum considerations to be provided, and it is understood that mandatory offers may not be subject to conditions (other than those that may result from mandatory law). 6.5 Minimum Acceptance Conditions No minimum accepted condition is imposed by Portu - guese law concerning the percentage of voting rights acquired following the offer. Such a condition may, however, be imposed by the offeror, subject to the requirements detailed in 6.4 Common Conditions for a Takeover Offer . The existence of the mandatory bid regime (under which the offeror must launch a bid for the entire share capital of the target company) implies that, from a practical standpoint, any offeror acquiring a controlling stake in a company is usually inclined to launch an offer for the entire share capital of the com - pany, unless this acquisition fails to trigger the duty to launch a mandatory bid. 6.6 Requirement to Obtain Financing In general, within the structuring of transactions the parties are free to agree on the terms and conditions under which a business combination may occur, including completion of a transaction that is condition - al on the bidder obtaining financing. However, from a practical perspective, it is not common for parties to
1042 CHAMBERS.COM
Powered by FlippingBook