BANGLADESH Law and Practice Contributed by: Nasirud Doulah and Amina Khatoon, Doulah & Doulah
6. Structuring 6.1 Length of Process for Acquisition/Sale Non-Listed Companies The time required to acquire or sell a business depends on the type of transaction (an acquisition of shares or an amalgamation), the scope of due diligence, nego - tiations and regulatory approvals (industry-specific and/or competition-related). Listed Companies With regard to listed companies, with the generic timeline as described below, a takeover bid may take twelve to twenty weeks from the date of definitive agreements if such acquisition deals with Post IPO locked shares belonging to sponsors or institutional investors or minimum maintenance of 30% share - holding by sponsors and directors, as express BSEC approval is required in such cases. Purchase through the exchange at market price The typical timetable for an offer is one to two weeks, as follows: • once an irrevocable offer has been filed, together with the relevant documents, with a corresponding stockbroker or merchant bank, this notice will be circulated immediately; and • the corresponding stockbroker or merchant bank will complete the purchase, per the offer and report to the regulator within a week of completion. The offer may be cancelled if there is no seller for the shares. Purchase through the exchange at negotiated price The typical timetable of an offer is twelve weeks, as follows: • a detailed sale and purchase agreement is execut - ed between the seller and the purchaser; • the seller gives an irrevocable sell order to the cor - responding broker or merchant bank; • the broker freezes the shares and sends a confirm - atory notice to the exchange; • the purchaser deposits 20% of the purchase price at the exchange by cheque (for non-cash consid - eration);
• the exchange immediately circulates the news; • once the news has been circulated, the broker will complete the transaction; • on completion, the purchaser shall report to the regulator within a week; and • if applicable, upon completion, the cheque as stated above will be returned to the purchaser. 6.2 Mandatory Offer Threshold BSEC has discontinued mandatory takeovers under its latest enactment of the Bangladesh Securities and Exchange Commission (Substantial Acquisition of Shares and Takeovers) Rules, 2018 and, accordingly, there is no mandatory offer threshold at present. 6.3 Consideration Non-Listed Companies There are no restrictions on consideration for general acquisitions and the issue of shares of a target. How - ever, all transfers involving foreign shareholders must take place at a fair price under valuation by a char - tered accountant/merchant bank. For foreign sellers, up to BDT10 million in sale proceeds may be repatriat - ed without valuation and up to BDT100 million in sale proceeds may be repatriated by the bank based on valuation by a chartered accountant/merchant bank, without central bank approval. Prior approval must be sought from the central bank for repatriable sale pro - ceeds over BDT100 million. In other cases involving local shareholder to foreign buyer transfer and foreign seller to foreign buyer transfer, a simple post-closing notification to the central bank, along with the valua - tion report, shall suffice. The fair market valuation must be conducted by an accredited chartered accountant or a licensed bank, following an approximate mix of the following: • the asset-based approach; • the market value approach and • the income approach. However, such valuation is exempt from repatria - tion of sale proceeds if the fair value of the shares is determined using the net asset value (NAV) approach, based on the latest audited financial statements and tax returns, without any consideration of intangible assets. Under such circumstances, an undertaking is
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