ZIMBABWE Law and Practice Contributed by: George Gapu, Fidelis Manyuchi and Tapiwa John Chivanga, Scanlen & Holderness
ment on behalf of the registered business entity in relation to the matter unless specifically requested or directed to do so by the board or meeting of members.
company; and (f) turning a hostile takeover into a merger. 9.4 Directors’ Duties In employing defensive measures against a hostile takeover, directors must always act in good faith, in the best interests of the company and with the care, skill and attention that a diligent businessperson would exercise in the same circumstances. In other words, directors must discharge all their common law and statutory duties to the company. They cannot put their interests above all else. 9.5 Directors’ Ability to “Just Say No” Directors can “just say no” to takeover offers and take actions that prevent a business combination. This is, however, subject to them disclosing the offer(s) to the shareholders for their consideration. If the sharehold - ers are not interested in the offer, the directors can then proceed to just say no. Outside litigation related to competition/merger con - trol, litigation is not common in connection with M&A deals in the Zimbabwean jurisdiction. 10.2 Stage of Deal Litigation in M&A is not common in Zimbabwe apart from isolated cases. 10.3 “Broken-Deal” Disputes Information relating to this is currently not publicly available. 10. Litigation 10.1 Frequency of Litigation
9. Defensive Measures 9.1 Hostile Tender Offers
Hostile takeovers are currently not precluded in the Zimbabwean jurisdiction, although they are not com - mon as a form of M&A. Most transactions tend to be by consent of both parties. 9.2 Directors’ Use of Defensive Measures Subject to acting in accordance with their common law and statutory duties, there is no law precluding directors from using defensive measures in Zimba - bwe. 9.3 Common Defensive Measures Hostile takeovers are not prevalent in the Zimbabwe - an market. Although defensive mechanisms remain available, they are rarely used. Some of the common defensive mechanisms that can be employed by the board are as follows. • Clauses in the constitutional documents of the tar - get – some constitutional documents of a company require a special resolution (vote by two-thirds majority) to confirm a takeover and/or require any person making an offer to acquire the target to pay a fair price for the shares, with a fair price being the highest price recently paid for the shares in the company. • Active counteractions after receiving an offer – after receiving an offer, the board can take active steps to avoid a successful hostile takeover. These involve: (a) rallying the shareholders against accepting the offer; (b) media campaigns that highlight the pitfalls of the potential takeover; (c) buying shares of the attacking company and taking control of it; (d) selling or merging with another investor; (e) restructuring the assets of the company in a way that makes it unattractive to the attacking
11. Activism 11.1 Shareholder Activism
Shareholder activism is not a common feature in Zim - babwe. To the extent that activism occurs, the typical aims and focus of activist shareholders include: • to improve the governance and accountability of the board (including encouraging compliance with the law);
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