BARBADOS Law and Practice Contributed by: Debbie Fraser, Joanna M. Austin, Makela Harrison-Yarde and Jael Smith, Fraser Law
expectations. It must be noted that the Companies (Take-over Bid) Regulations, 2002 imposes certain requirements that impact such conditions. Regulation 7 (d) of the Companies (Take-over Bid) Regulations, 2002 mandates that a takeover bid cir - cular must disclose the method and timing of payment for the shares of the offeree company, which ensures transparency regarding financing arrangements. Addi - tionally, Regulation 18 (4) requires that if the bidder elects to proceed with the offer, they must take up and pay for the shares within 30 days of the closing of the offer. This suggests that while financing con - ditions may be included, bidders must ensure they can secure the financing to complete the transaction within the required timeframe. 6.7 Types of Deal Security Measures A bidder in Barbados can seek protection mecha - nisms to secure its position in a transaction, including lock-up agreements whereby the acquirer seeks cer - tainty before launching an offer from key shareholders who vote in favour of the transaction. The regulatory framework in Barbados has not seen changes in recent years that have significantly impact - ed the length of interim periods. It must be noted, however, that the timeline may be impacted where regulatory approvals are required – for example, where the FTC has to review for reasons of competition. 6.8 Additional Governance Rights Additional governance rights are typically outlined in shareholder agreements and may include securing the right to appoint a specified number of directors to the target’s board, which allows for oversight and partici - pation in the decision-making process. Pre-emptive rights to maintain shareholding, tag-along rights or drag-along rights may also be negotiated for future sales. These rights ensure that the bidder maintains a level of oversight despite not having 100% ownership. 6.9 Voting by Proxy A shareholder who is entitled to vote at a meeting of shareholders may, by means of a proxy, appoint a proxy holder or one or more alternate proxy holders, none of whom need be shareholders, to attend and act at the meeting in the manner and to the extent
authorised by the proxy, and with the authority con - ferred by the proxy. The proxy appointment must be in writing and typi - cally submitted before the meeting, as per the com -
pany’s by-laws or notice of meeting. 6.10 Squeeze-Out Mechanisms
The use of a squeeze-out mechanism to buy share - holders that have not tendered following a success - ful tender offer is the subject of a lawsuit in the High Court of Barbados and is therefore now also the sub - ject of judicial review. While Barbados does not have a statutory squeeze- out mechanism, Section 186 of the Companies Act provides that, if (within 120 days after the date of a regularly made takeover bid for all the shares of the offeree company) the bid is accepted by holders of 90% or more of the shares of any class of shares to which the takeover bid relates, other than shares held at the date of the takeover bid by or on behalf of the offeror or an affiliate or associate of the offeror, the offeror may acquire the shares held by the dissent - ing offerees. Minority shareholders may therefore be forced to sell under a compulsory acquisition process initiated by the bidder. 6.11 Irrevocable Commitments In Barbados, it is not unusual for bidders to seek irrev - ocable commitments from the principal shareholders of the target company to tender their shares or vote in favour of a proposed transaction. These commitments help to provide certainty of the deal and are usually negotiated prior to the public announcement of a bid. Consequently, these negotiations are usually under - taken at the early stages of a transaction, especially in friendly takeovers or mergers where the bidder wants to secure key shareholder support before proceeding with the launch of an offer. The parties will need to be mindful of disclosure obligations under the applicable rules and regulations during the negotiations. The nature of these undertakings is often formalised through lock-up agreements, which legally bind prin - cipal shareholders to support the transaction in case of both hard lock-up agreements, which restrict with - drawal by shareholders, and soft lock-up agreements,
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