BELGIUM Law and Practice Contributed by: Michel Bonne, Hannelore Matthys and Virginie Lescot, Van Bael & Bellis
rights in a Belgian company (i) whose securities are admitted to trading on a regulated market, or (ii) more than 50% of whose securities are admitted to trading on Euronext Growth or Euronext Access and no secu - rities are admitted to trading on a regulated market. However, in certain exceptional circumstances, a mandatory bid is not required when the 30% thresh - old is exceeded. For example, within the context of a voluntary takeover bid, a transfer between affiliated companies, or a share capital increase with prefer - ential subscription rights. In addition, the obligation to launch a mandatory offer does not apply where a third party controls the target or owns a larger stake than the person(s) acquiring 30% of the voting rights securities. This exception will no longer apply when, within a period of three years after the acquisition, the entity or person that initially exceeded the 30% threshold obtains the largest stake or control following a subsequent acquisition. An exception also applies when the threshold is tem - porarily exceeded by a maximum of 2%, provided that the buyer (i) sells the excess within 12 months, and (ii) does not exercise its voting power relating to the excess. In relation to squeeze-out thresholds, see 6.10 Squeeze-Out Mechanisms . 6.3 Consideration In principle and subject to certain exceptions, consid - eration offered within the framework of both private and public acquisitions can consist of cash, securi - ties, or a combination of both. Consideration in cash is almost exclusively used for both private and pub - lic M&A transactions in Belgium. Exchange bids are extremely rare on the Belgian market, and are more common in private M&A transactions (eg, roll-over structures). In the case of mandatory takeover bids, a cash alternative must, in some circumstances, be offered to the security holders. If the consideration offered by the bidder does not consist of liquid secu - rities listed on a regulated market or if the bidder, alone or acting in concert, has acquired securities of the target in cash during the 12 months prior to the announcement of the bid or during the offer period,
the bidder must foresee a consideration in cash as an alternative. The most common tool used to bridge value gaps is an earn-out mechanism. Furthermore, warranty and indemnity insurance is now more frequently used to bridge more general negotiation gaps, including to resolve valuation discussions on certain issues. 6.4 Common Conditions for a Takeover Offer A mandatory takeover bid must be unconditional, whereas a voluntary takeover bid can be subject to certain specific conditions, which need to be pre- approved by the FSMA. If the conditions of the voluntary takeover bid are not met, the bidder may modify the offer or notify the FSMA of an intention to withdraw the offer. An offer may, for instance, be subject to: • a minimum acceptance threshold to ensure that the bidder can control the target company after the bidding process (eg, the obtaining of 60% of the shares); • the non-occurrence of an event beyond the bid - der’s control; or • amendments to the target company’s articles of association. In any case, the bid should normally allow the offeror to achieve the intended result. In practice, the FSMA is reluctant to approve any specific conditions if they are likely to limit (or even undermine) the success of the bid. Furthermore, a bidder may withdraw its voluntary offer if the European Commission and/or of the relevant national competition authority decide that the takeo - ver would constitute a concentration which is incom - patible with applicable competition law. 6.5 Minimum Acceptance Conditions A voluntary tender offer can be subject to conditions (see 6.4 Common Conditions for a Takeover Offer ). One of the most common conditions included by the bidder in its offer is a minimum level of acceptance to ensure that the bidder can control the target com - pany after the bidding process. Thresholds have var -
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