BANGLADESH Law and Practice Contributed by: Nasirud Doulah and Amina Khatoon, Doulah & Doulah
(a) factors related to changes in financial condi - tions; (b) information relating to the corporate declara - tion; and (c) information regarding changes in corporate structure, such as: (i) acquisition or disposal of any assets of 5% or more of the existing assets; (ii) merger with another company or substan - tial acquisition of shares of any company, or acquisition of any company, etc; (iii) demerger of any unit of the company; (iv) conversion or winding up of any unit of the company; (v) changes of corporate activities through capital reorganisation, merger, or de - merger; (vi) proposal to take over the authority of any company or proposal for the acquisition of internal services; (vii) change of ownership, which may affect the control of the company; and (viii) change of name or address, etc; and (d) information regarding changes in capital struc - ture, such as: (i) any decision relating to private or public rights, offer of securities, or changes in its capital structure; (ii) systematic repurchase or redemption of securities; (iii) any decision relating to consolidation of shares, exchange of shares, conversion of any security into equity security or conver - sion of debentures into shares; and (iv) significant changes relating to the rights of security-holders, etc. 5.2 Market Practice on Timing In line with the above requirements outlined in 5.1 Requirement to Disclose a Deal , market practice on the timing of disclosures conforms with the legal requirements. Companies disclose the deal upon entering into binding definitive agreements. 5.3 Scope of Due Diligence Purchasers generally engage separate teams to per - form legal, business and financial due diligence on
the target. Legal due diligence in general covers the following aspects: • share capital and corporate governance; • indebtedness and financial arrangements; • regulatory matters and compliance with public list - ing regulations (for listed companies); • licenses and authorisations from the government; • material contracts; • tax; • IP; • employment and pensions; • real estate; • environment; • information technology and data management; • litigation and disputes; and • insurance. 5.4 Standstills or Exclusivity Exclusivity is usually demanded during negotiations of the term sheet through closing. Unless multiple bid - ders are involved, parties generally agree to exclu - sivity for an agreed time. In general, once definitive agreements are executed, parties to such agreements undertake not to: • take any action other than in the ordinary course of business; • deal in any asset or contract beyond a pre-agreed pecuniary threshold • effect any substantial change in the financials of the company; • do anything that would have a material adverse effect on the business of the company; or • act in derogation of the obligations undertaken under the definitive agreements. 5.5 Definitive Agreements For M&A transactions and tenders involving non-list - ed companies, as well as negotiated deals involving listed companies, it is standard practice for parties to execute a definitive agreement setting out the agreed terms and conditions. Such agreements, however, are not applicable to purely open public offers.
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