ZIMBABWE Law and Practice Contributed by: George Gapu, Fidelis Manyuchi and Tapiwa John Chivanga, Scanlen & Holderness
5.5 Definitive Agreements It is permissible for tender offer terms and conditions to be documented in a definitive agreement. This is, however, not common, differing from transaction to transaction. 6. Structuring 6.1 Length of Process for Acquisition/Sale There is no set timeframe within which transactions occur in the Zimbabwean jurisdiction. This differs depending on the nature of the transaction, that is, on the attitudes of the parties involved and the com - plexity of the deal – ie: • whether it is between private parties or involves a public company; • the value of the transaction; and • the number of regulatory approvals required. 6.2 Mandatory Offer Threshold The mandatory offer threshold in Zimbabwe is 35%; this is known as the “control block”. 6.3 Consideration Both cash and shares are common forms of consid - eration in Zimbabwean transactions, although cash tends to be the most preferred. Common tools used to bridge value gaps between the parties in a deal include requesting proof of availability of funds for a certain specified period, in the form of certified bank statements and/or a bank guarantee or surety from an acceptable third party. Funds can also be held in escrow by a trusted third party. Virtually all transac - tions are now conducted in US dollars, and this brings some stability in valuations. 6.4 Common Conditions for a Takeover Offer Takeover offers usually contain the following condi - tions: • the period during which the offeree shareholders can accept the offer to acquire shares (which may not be less than 30 days from the date of sending the offer to shareholders); • the minimum number of shareholders who must approve the offer;
ings Requirements) Rules, 2019 requires that a pre - liminary announcement must be issued in the press at the earliest possible moment, and not later than 48 hours after the offer, in the event of a takeover bid by a listed or unlisted company, or where a takeover bid is received by an issuer. 5.2 Market Practice on Timing Generally, the market practice on timing of disclosure does not differ from the legal requirements when there It should be noted that the company being acquired is not mandated to extend an option to the prospective acquirer to conduct due diligence. This right is negoti - ated between the parties involved. Due diligence reports differ depending on the transac - tion in question. Generally, the most common areas include: • legal (that is, the nature of incorporation of the company, whether its directors are duly established in terms of the law, its physical address, whether its constitutive documents are in order, whether the companies’ annual returns are in order and a review of its contractual obligations and regula - tory and licensing compliance, including exchange control approvals, mining titles and environmental compliance where applicable); and is a legal requirement to disclose. 5.3 Scope of Due Diligence • financial and tax (that is, whether the company has audited statements where mandated by law and whether its financial statements are up to date). 5.4 Standstills or Exclusivity Neither standstills nor exclusivity are usually demand - ed. These are usually negotiated between the parties. The target companies’ boards of directors usually, subject to their duties to act in the best interests of the company, negotiate in good faith and extend a certain level of exclusivity to the offeree for a certain period of time before looking to other prospective offers. This, however, usually depends on the eagerness of the target company to sell, which differs from transaction to transaction.
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