SENEGAL Law and Practice Contributed by: Khaled Abou El Houda, Malick Lo, Chadi Safieddine and Mohamed Kamil, SCP Houda & Associés
8.2 Special or Ad Hoc Committees Use of Special and Ad Hoc Committees
permitted by law, though they remain uncommon in practice. The regulatory framework is designed to ensure that if a hostile bid occurs, it is conducted transparently, allowing the market and the target’s board to react appropriately. In addition, many listed companies in the region have highly concentrated shareholding structures, often with a dominant founding family, a strategic multinational partner, or the State. Taking control without the support of these principal share - holders is technically difficult. Furthermore, corporate culture in the UEMOA zone tends to favour negotiated transactions. Most suc - cessful deals are “friendly” and preceded by extensive private discussions. 9.2 Directors’ Use of Defensive Measures In the Senegalese jurisdiction (under the AMF-UMOA and OHADA frameworks), directors of a target com - pany are allowed to use defensive measures, but their actions are subject to strict regulatory oversight and disclosure requirements to prevent the unfair frustra - tion of a bid. The regulatory framework acknowledges that a target company may have pre-existing or reactive defensive strategies. • Disclosure of defence agreements The target company is specifically required to transmit to the AMF-UMOA any “defence agreements” ( accords de défense ) it has concluded with other partners. • Motivated opinion Within 15 days of being notified of an offer, the Board of Directors must provide the regulator with a report containing its motivated opinion on the offer’s merits. Constraints on Director Actions While defences are permitted, the law limits the auton - omy of directors once an offer is in progress to protect shareholder interests, as follows. 9.3 Common Defensive Measures Board’s Right to Respond and Defence Agreements
Although the OHADA Uniform Act allows for the crea - tion of ad hoc committees, this remains rare in practice for private companies in Senegal. The management of conflicts of interest relies more on the legal procedure of “regulated agreements” (prior approval and voting without the interested party) than on the creation of specific governance structures, which are reserved for the most sophisticated or regulated entities. 8.3 Business Judgement Rule In Senegalese law (OHADA), the concept of the “Busi - ness Judgment Rule” does not exist under this English name, but a similar principle of non-interference by judges in corporate management is applied by the courts. Senegalese courts observe a principle of deference towards the strategic choices of the board of direc - tors. The judge generally refuses to censor a decision on the grounds that it is economically “bad” or “inap - propriate”. As long as the decision-making process complies with the law and the articles of association, the judge considers that he or she or they should not substitute for the directors in assessing the commer - cial appropriateness of a merger or takeover bid. 8.4 Independent Outside Advice Lack of independent advice: in the vast majority of private transactions, the Board of Directors does not seek any independent outside advice. Directors rely solely on information provided by the majority share - holder or the company’s usual advisors (long-standing lawyer or accountant). 8.5 Conflicts of Interest In Senegalese practice (OHADA), conflicts of interest are subject to strict legislative oversight, but effec - tive judicial review remains limited to cases of post- acquisition disputes or crises between shareholders.
9. Defensive Measures 9.1 Hostile Tender Offers
In the Senegalese jurisdiction (under the AMF-UMOA and OHADA frameworks), hostile tender offers are
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