UAE Law and Practice Contributed by: Ahmed Ibrahim, Malack El Masry and Maryam Quadri, IN’P IBRAHIM .N. PARTNERS
Conversely, minority shareholders possess a cor - responding right. They can require an acquirer, who holds or following an acquisition will hold the same threshold of 90% plus one share or more of the total share capital of a publicly listed company, to buy them out. Any holders with at least 3% of the total share capital of a publicly listed company may submit an offer to the acquirer to purchase the minority shares. The acquirer must respond within 60 days and can approve or reject the offer. If the offer is rejected or the acquirer does not respond, the minority shareholders can ask the CMA to force the acquirer to make an offer. If the CMA agrees, the acquirer will be required to make an offer within 60 days of being notified of the CMA’s decision. 6.11 Irrevocable Commitments Irrevocable commitments have occurred in the past; however, clients are not generally advised to enter into such commitments, as they could be viewed as a vio - lation of the law when it comes to public M&A. When it comes to private M&A transactions, there are no requirements in relation to making any bid pub - lic. However, shareholders are treated equally, and statutory pre-emption rights apply in the event of any transfer of shares. In relation to public M&As, there are strict disclosure requirements depending on the level of ownership. Such disclosures can be a pre/post-notification to the authorities and the market, otherwise, the company may ask for a stay on the requirement to notify the market until the transaction is binding. The authorities are entitled to grant or reject such stay at their discre - tion. However, the authorities generally do grant stays and extend the duration of a stay depending on the stage of each transaction. 7.2 Type of Disclosure Required For private companies, corporate and regulatory approvals are required to issue shares; however, there are no disclosure requirements. For listed companies, any issuance of shares is referred to as a rights issue 7. Disclosure 7.1 Making a Bid Public
(unless such issuance is for a strategic investor) and follows a mandatory process that includes approvals and disclosures to the regulator and the market. 7.3 Producing Financial Statements Bidders do not need to produce financial statements; however, the target company may be required to do so. Generally, financial statements need to be pre - pared in accordance with the IFRS. 7.4 Transaction Documents The only transaction documents that are disclosed in full are the announcement of intention to make an offer, the offer document and shareholder circu - lar, which mainly include all the terms of the relevant transaction. For example, the merger agreement itself is not required to be disclosed, but most of its provi - sions are already set out in the shareholders’ circular. The directors’ duties are to act within the company’s best interests, exercising independent judgement to promote the success of the company. In doing so, directors must always avoid conflicts of interest. The duties of the directors in an LLC are owed to the com - pany, the shareholders and any interested third par - ties. In public joint stock companies, it is the same position; however, the CMA extends the directors’ duties to all stakeholders, including employees, credi - tors, suppliers, and any other person who has an inter - In public M&A transactions, special and ad hoc com - mittees are often established to address a specific issue. For example, a merger committee is estab - lished to oversee the merger process. These commit - tees are not used in practice to resolve any conflict- of-interest issues. Board members that are conflicted must declare such conflict and abstain from voting. 8.3 Business Judgement Rule Although there are apparently no precedents, a rec - ommendation of the board is generally required to be made to the shareholder to either recommend the 8. Duties of Directors 8.1 Principal Directors’ Duties est in the public joint stock company. 8.2 Special or Ad Hoc Committees
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