BELGIUM Law and Practice Contributed by: Michel Bonne, Hannelore Matthys and Virginie Lescot, Van Bael & Bellis
In addition, the articles of association may permit the board to take various defensive measures making takeovers more difficult; for example, to increase the capital of the company within certain limits or pur - chase shares in the company without prior sharehold - ers’ approval. 4.4 Dealings in Derivatives Dealings in derivatives are allowed under Belgian law. Regulation (EU) No 648/2012 on over-the-counter (OTC) derivatives, central counterparties and trade repositories, which is directly applicable in Belgium, is the most relevant source in relation to these deal - ings. This Regulation includes provisions on exchange traded derivatives, but mainly provides a legal frame - work for OTC derivatives, which account for almost 95% of the derivatives markets within the EU. 4.5 Filing/Reporting Obligations Pursuant to Section 6, paragraph 6 of the Law on public disclosure of important participations, finan - cial instruments linked to securities conferring voting rights, where the exercise of those instruments might lead to the acquisition of voting rights, are subject to the same reporting regime as the voting securities themselves (see 4.2 Material Shareholding Disclo- sure Threshold ). Examples of financial instruments that could meet these requirements are warrants, futures and swaps. If such financial instruments are exercised, resulting in the acquisition of the shares the financial instrument was linked to, the same rules apply once again. 4.6 Transparency When bidders acquire shares, they are generally not under an obligation to disclose the purpose of their acquisition, nor their intention regarding control of the company (if they were to have such an intention). There is, however, an exception to this rule, which applies if a bidder intends to acquire portfolio man - agement and investment advice companies, man - agement companies of undertakings for collective investment and management companies of public alternative investment funds.
Furthermore, the bidder shall have an obligation to notify the FSMA of a decision to acquire shares or shareholder rights in the entity if the bidder would, as
a result of the intended acquisition: • acquire a “qualifying holding”; or
• increase an existing qualifying holding so that the proportion of the voting rights, or of the capital held, will cross the thresholds of 20%, 30% or 50%, or so that the target would become its sub - sidiary. The Law of 1 April 2007 on public takeovers (the “Pub - lic Takeover Law”) also contains a “put up or shut up” rule, allowing the FSMA to require a potential bidder to disclose its intention to launch a bid following market rumours. If no intention to launch a bid is announced, this person will be precluded from making a bid on the same target company for six months (save in excep - tional circumstances). In the case of an acquisition of a private company, there is no obligation to disclose the deal. As parties are frequently bound by non-disclosure agreements, the acquisition is often only announced as soon as signing or closing has taken place (assuming the par - ties wish to disclose the deal). If a company intends to acquire a listed company, the Public Takeover Law provides for several notification and publication requirements (see also 6.1 Length of Process for Acquisition/Sale ). Companies that are submitting a public takeover bid must notify this to the FSMA, which will release a public announcement before the bidder does so. In view of this, bidders are encouraged to reach out to the FSMA early in the process to discuss the envisaged timeline. The FSMA may also require the parties involved in a potential takeover bid to issue a press release. 5. Negotiation Phase 5.1 Requirement to Disclose a Deal In the case of a public takeover bid, the Royal Decree of 27 April 2007 on public takeovers (the “Takeover Decree”) requires that the same information be pro -
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