BANGLADESH Law and Practice Contributed by: Nasirud Doulah and Amina Khatoon, Doulah & Doulah
issued by the target specifying that the impairment of assets has been adjusted in arriving at the NAV and the remitting bank is satisfied that there is no abnor - mal growth in total assets in any of the last three years, particularly in the last year. Listed Companies With regard to listed companies, consideration is based on the following. Purchase through exchange at market price Consideration is simply based on the current market price. Purchase through exchange at negotiated price The regulation has not imposed any valuation method for this purpose. However, in the case of the acquisi - tion of shares subject to BSEC approval, as stated in 4.3 Hurdles to Stakebuilding , BSEC may seek the basis of the consideration and may require a valua - tion certificate. 6.4 Common Conditions for a Takeover Offer Non-Listed Companies: There are no conditions that are mandated by regula - tions. The main substantive clauses in an acquisition agreement include: • purchase considerations and modality of payment; • interim adjustment, hold-back and escrow arrange - ment; • conditions precedent to the acquisition; • conditions subsequent to the acquisition, including perfection; • closing and closing-related actions; • post-closing obligations; • representations, warranties and covenants; • indemnities, particularly tax indemnities; • governing law and dispute resolution process; • non-compete restrictions; and • payment of costs and expenses. Listed Companies For public takeover offers, the only conditions man - dated by regulation are:
• disclosure by way of public disclosure through the exchange of the intention to purchase, which would include conditions of the purchase offer; and • irrevocable instruction to the broker or merchant bank to acquire shares up to the target limit at market price. Common conditions for a takeover offer include a minimum level of acceptance. The acquirer is bound to disclose all such conditions in the detailed public statement and the letter of offer for a takeover offer. 6.5 Minimum Acceptance Conditions There are no minimum acceptance conditions man - dated by regulations. An open offer should be for at least 26% of the target company, ensuring that the acquirer acquires a simple majority if all shareholders who are made an offer accept it. However, in the case of a voluntary offer for a listed company, the acquirer would be required to acquire at least the number of shares that would entitle them to exercise 10% of the voting rights in the target com - pany. 6.6 Requirement to Obtain Financing Small-scale transactions are primarily financed by equity, while larger transactions are financed by a mix of debt and equity. Non-Listed Companies Although not mandatory, a business combination may be conditional on the bidder obtaining financing, pro - vided the parties agree to such an arrangement. Listed Companies There is no obligation for the acquirer to obtain financ - ing for the public offer (at market price or through a negotiated deal); however, the acquirer must ensure that firm financial arrangements for the fulfilment of the obligations under the public offer are in place and suitable disclosures in this regard have been made in the public announcement. The broker firm is also responsible for ensuring that adequate funds have been provisioned. In the case of the acquisition of shares off the exchange for non-cash consideration, such as a share swap, a
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