BELGIUM Law and Practice Contributed by: Michel Bonne, Hannelore Matthys and Virginie Lescot, Van Bael & Bellis
ied between 50% and 95%. In practice, the FSMA is reluctant to approve any specific conditions, such as minimum acceptance, if they are likely to limit the success of the bid. 6.6 Requirement to Obtain Financing In public M&A transactions, a bid cannot be con - ditional on obtaining the necessary financing. The funding must be entirely committed before the bid is announced. The bidder must provide evidence to the FSMA that it has the necessary funding to pay in full the bid price, either in the form of an unconditional and irrevocable bank credit facility concluded with a Belgian credit institution, or in a special bank account opened with a Belgian credit institution. In exchange offers, the bidder must provide evidence to the FSMA that the securities to be offered in exchange are avail - able to it, or that it has the power to issue or acquire these securities from another person (for example, an affiliate). In private M&A transactions, it is possible to include the obtaining of financing as a condition precedent in the acquisition agreement. While it is not uncommon, the seller will always try to avoid a financing condi - tion precedent. If unavoidable (including, for instance, when the purchaser is a private equity player), the seller may sometimes try to negotiate thresholds for obtaining the financing (ie, a sufficiently high interest rate and leverage ratio). 6.7 Types of Deal Security Measures In principle, a non-solicitation clause pursuant to which the company undertakes not to solicit any addi - tional offers from other bidders is valid. However, the validity of (other) deal security measures is debated under Belgian law as it could be argued that they are not in the corporate interest of either the bidder or the target company. Therefore, deal protection measures such as match rights or force-the-vote provisions are rare, and it may be delicate to enforce such measures under Belgian law. However, break-up fees are included from time to time in documentation regarding private M&A transactions, in particular in competitive auction processes or in larger transactions, where the parties are already com -
mitted, or will commit, to each other between signing and closing. New Regulatory Environment Impacting the Length of Interim Periods The Belgian FDI screening mechanism, which has been in place since 2023, may impact the length of interim periods. See 2.6 National Security Review . 6.8 Additional Governance Rights Where a bidder does not seek to acquire 100% owner - ship of a target company, it may choose to strengthen its governance rights by entering, for instance, into a shareholders’ agreement with the remaining principal shareholder(s) of the target. Shareholders’ agreements will typically include clauses regarding governance at the level of the board of directors and the sharehold - ers’ meeting (including quorum, majority and/or vot - ing requirements, or providing veto rights for certain essential decisions). They also typically include share transfer restrictions (pre-emption rights, tag-along rights, drag-along rights, call and put options). For listed companies, a shareholders’ agreement con - cluded between shareholders may qualify as a con - certed action within the meaning of Belgian takeo - ver legislation, and therefore trigger the obligation to launch a mandatory takeover offer if the mandatory offer threshold of 30% would be met. 6.9 Voting by Proxy Shareholders may vote by proxy. The shareholder may specify precise voting instructions or leave the voting up to the discretion of the proxyholder. The articles of association may not suppress a shareholder’s right to appoint a proxyholder, but it is possible to modulate this right (eg, a proxy can only be granted to other shareholders, and only one proxy per shareholder). Furthermore, the articles of association may impose a registration procedure on shareholders represented by proxy. This will, in particular, be the case for listed companies. In addition, the BCAC provides the flexibility to organise shareholders’ meetings virtually. Such vir - tual shareholders’ meetings are still subject to certain conditions on security and identity verification and simultaneous participation.
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