UGANDA Law and Practice Contributed by: Arnold Lule Sekiwano, Ritah Nakalema, Evelyn Maria Nakigudde and Collette Melvina Awano, Engoru, Mutebi Advocates
6.10 Squeeze-Out Mechanisms In Uganda, when a takeover leads to the acquirer acquiring at least 90% of the voting rights in the tar - get company, a squeeze-out mechanism is triggered. Under this framework, the acquirer is required to extend an offer to the remaining minority sharehold - ers, providing them with compensation equivalent to either the prevailing market price of the voting rights or the price offered to other shareholders, whichever is higher. This mechanism presents an exit opportunity for minority shareholders. 6.11 Irrevocable Commitments There are no restrictions imposed on bidders from obtaining irrevocable commitments from principal shareholders of the target company. The commit - ments will be subject to negotiations and agreements before a formal offer is made to the target company. The timing and method of making a takeover bid public differ significantly between private and public companies. For private companies in Uganda, the Companies Act does not prescribe public disclosure requirements. However, if the proposed acquisition triggers com - petition sector-related approvals, notification to the specific sector regulator is mandatory. In contrast, for companies listed on the USE, there are ongoing disclosure requirements which must be met by way of releasing an announcement by press notice of the proposed takeover offer within 24 hours, and formal notifications must be initiated and issued to the CMA, 7. Disclosure 7.1 Making a Bid Public Under the USE Listing Rules of 2025, an issuer is obli - gated to announce significant events as soon as pos - sible and no later than 24 hours after they occur. The Listing Rules define significant events to include any changes in substantial shareholdings, acquisitions of shares that lead to a company becoming a subsidiary or associated company, sales of shares that result in a company no longer being a subsidiary, and any sale the USE and the board of the target. 7.2 Type of Disclosure Required
of assets that amounts to 10% or more of the issuer’s net assets, and the announcement must include the information necessary to enable holders of the issuer’s listed securities and the public to avoid the creation of a false market in its listed securities. The Companies Act imposes a requirement to dis - close the details of any shares or debentures held by directors, as well as any rights they have to acquire such securities, if these holdings are affected by the transaction. This includes shares held in the company, its subsidiaries, its holding companies, or subsidiaries of its holding companies. The Takeovers and Mergers Regulations generally require all persons concerned with acquisitions, take - overs and mergers to make full and prompt disclosure of all relevant information and take every precaution to avoid the creation or continuance of an uninformed market. During a takeover offer period, the acquirer is not allowed to sell any voting rights related to the offer. 7.3 Producing Financial Statements There is no requirement to disclose the financial state - ments of the acquirer to the shareholders of the tar - get. However, in terms of the Takeovers and Mergers Regulations, a summary of audited financial state - ments – in particular, balance sheet, income state - ment, statement of changes in equity, cash flow state - ment, and basic and diluted earnings per share – must be included in the acquirer’s statement of intention. According to the Accountants Act, Cap 294, finan - cial statements must be prepared in accordance with internationally accepted accounting standards, such as IFRS and/or GAAP. 7.4 Transaction Documents It is important to disclose transaction documents in full to regulatory bodies in the process of obtaining requisite transaction approvals or waivers.
8. Duties of Directors 8.1 Principal Directors’ Duties
Under Ugandan law, directors have extensive com - mon law and statutory duties that apply in the per - formance of their duties, including during a business
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