UAE Law and Practice Contributed by: Ahmed Ibrahim, Malack El Masry and Maryam Quadri, IN’P IBRAHIM .N. PARTNERS
Acquiring 30% or more of a publicly listed company The CMA An MTO is triggered where an acquirer acquires, or where an acquisition results in such acquirer hold - ing, 30% plus one share or more of a publicly listed company. The acquirer is obliged to immediately stop increasing its ownership ratio and notify the CMA of its ownership ratio and whether there is any intention to make an MTO; if not, the acquirer’s ownership ratio must be reduced to 30% or less within three months It is likely that the approval of any industry-specific regulator will be required prior to obtaining approval from the CMA. For example, an acquirer purchasing shares in a bank will need approval from the CB before it can obtain approval from the CMA. The DED of notification to the CMA. Industry-specific regulator Procedural approvals and beneficial ownership filings may be required with DED in the case of a change in 25% or more of the ultimate beneficial ownership. The Market Where the acquirer has been granted a stay, it will be required to disclose to the Market immediately upon execution of the purchase order. OTC acquisitions Certain transactions can be carried out on an OTC basis, meaning that they are executed outside of the market trading system. The Market The seller and the acquirer will need to submit a formal request to the chair of the Market containing the details of the transaction (including the agreed price) and containing a signed undertaking to the Market. OTC acquisitions must exceed a certain financial threshold. For example, under the Dubai Financial Market, the minimum size of the shares being acquired through a block deal would be at least between AED1 million and AED15 million (depending on the relevant com - pany whose shares the block deal is being carried out on), and the execution of such block deal can be at a price higher or lower than a maximum of either 10%
or 25% of the previous close price, depending on the percentage by which the transaction value exceeds
the block amount thresholds. Mandatory Tender Offer (MTO)
A mandatory tender offer is triggered where an acquir - er acquires, or where an acquisition will result in such acquirer holding, 30% plus one share or more of a publicly listed company. The acquirer is obliged to immediately stop increasing its ownership ratio, notify the CMA of its ownership ratio and whether there is any intention to make an MTO; if not, the acquirer’s ownership ratio must be reduced to 30% or less within three months of notification to the CMA. Where the acquirer wishes to make an MTO, it will be completed if such offer results in the acquirer holding at least 50% plus one share or more shares in the capital of the publicly listed company. If this thresh - old is not reached, the offer will be cancelled and the acquirer’s share ratio must be reduced to 30% or less. The CMA can make exceptions to this rule, including for government-owned companies, distressed com - panies and securities acquired through inheritance. Any transaction that creates an “economic concentra - tion” must be notified to the UAE Ministry of Econo - my and obtain clearance before being implemented. Under the Decree, a transaction will be regarded as an economic concentration capable of affecting com - petition in the relevant market if either of the following conditions is met: • if the total annual sales value of the relevant parties in the relevant market in the country (ie, the UAE) during the last fiscal year exceeds AED300,000,000; or • if the total share of the relevant parties exceeds 40% of the total transactions in the relevant market in the country during the last fiscal year. Where one of these thresholds is met, the parties involved must make an application for approval at least 90 days prior to completing the relevant trans - action. The CRC then has 90 days (extendable by a further 45 days) to review the transaction and issue a
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