SIERRA LEONE Law and Practice Contributed by: Gelaga King, Eku Williams, Robert Koroma and Valentina Coker, GPKLegal
4.5 Filing/Reporting Obligations See 4.4 Dealings in Derivatives . 4.6 Transparency
to lock in negotiations, particularly in competitive min - ing deals. 5.5 Definitive Agreements It is permissible but not common for tender offer terms and conditions to be documented in a definitive agree - ment in Sierra Leone; however, tender offers are rare. Most mergers and acquisitions occur through private negotiations, with terms finalised in share purchase or asset transfer agreements. 6. Structuring 6.1 Length of Process for Acquisition/Sale Acquiring or selling a business typically takes between six and 12 months. This timeline reflects the time needed for due diligence, regulatory review and negotiation, although the actual duration will depend on the complexity of the deal and the specific sector involved. Further delays may occur from a lack of full digitalisation, bureaucratic processes and stakeholder consultations. 6.2 Mandatory Offer Threshold The takeover rules require a person or group to make a mandatory offer for a company when that person or group acquires interests in shares carrying 40% or more of the voting rights of a company. They must make a cash offer to all other shareholders at the high - est price paid in the 12 months before the offer was announced. 6.3 Consideration Cash is the predominant form of consideration in Sier - ra Leone. In certain transactions, a mix of cash and shares may be used. Common tools to bridge valu - ation gaps include earn-outs, escrow arrangements and contingent payments. 6.4 Common Conditions for a Takeover Offer Common conditions for takeover offers in Sierra Leone include securing the necessary shareholder approvals, obtaining regulatory consents and com - pleting satisfactory due diligence. Although the regulatory framework does not impose overly restrictive conditions, it does require any con -
Shareholders acquiring a significant stake must dis - close their purpose and intentions regarding control of the company. Any shareholder crossing the 10% threshold must disclose the shareholding. This is designed to protect minority shareholders and prevent covert takeovers.
5. Negotiation Phase 5.1 Requirement to Disclose a Deal
For publicly listed companies, disclosure obligations may arise when negotiations become formal, such as when definitive agreements are signed or once mate - rial information is available. In private transactions, disclosure is usually governed by contractual terms rather than statutory require - ments. While deal volumes are not high in Sierra Leo - ne compared to more developed markets, common law and the statutory rules of duties owed to share- holders apply here in that a deal should be disclosed to the shareholders if/when an offer is made. 5.2 Market Practice on Timing In practice, parties in Sierra Leone tend to disclose material information earlier than the legal minimum to maintain transparency and manage market expec - tations, especially where public companies are con - cerned. 5.3 Scope of Due Diligence Due diligence usually covers corporate structure and legal, financial, operational and regulatory aspects. Particular attention is paid to local compliance issues, corporate governance practices and potential liabili - ties in areas such as labour, tax and environmental regulation. In certain sectors (most notably mining), cultural due diligence in respect of land rights and local customs is conducted. 5.4 Standstills or Exclusivity Standstills are rarely demanded. Exclusivity is more common, with buyers seeking short-term agreements
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