BELGIUM Law and Practice Contributed by: Michel Bonne, Hannelore Matthys and Virginie Lescot, Van Bael & Bellis
6.10 Squeeze-Out Mechanisms Within the framework of a takeover bid, if the bidder holds, directly or indirectly, at least 95% of the share capital conferring voting rights and 95% of the voting securities in the target as a result of the tender offer (and provided that the bidder acquired 90% of the share capital conferring voting rights of the target in the course of the bid), the bidder can squeeze out the remaining security holders under the same condi - tions as the initial bid. The bidder must reopen the bid within three months as from the closing of the accept - ance period. The offer period must be a minimum of 15 business days, during which the remaining minor - ity security holders may communicate any objections to the FSMA. Any securities not tendered to the reo - pened bid are considered transferred to the bidder by operation of law. On the other hand, under these circumstances, the remaining securities holders also have a sell-out right following a public takeover bid. Furthermore, the BCAC also provides for a squeeze- out mechanism outside the framework of a public takeover bid. The securities holders of listed limited liability companies which, acting alone or in concert, hold 95% of the securities conferring voting rights are, subject to certain conditions, entitled to require that all the remaining minority security holders sell their secu - rities at an equitable price. The securities not offered at the end of the acceptance period of the offer are transferred automatically to the offeror. Finally, the BCAC provides for a squeeze-out mech - anism for non-listed companies. Both the majority security holders of limited liability companies which are not listed on a regulated market, as well as the majority security holders of private limited liability companies, have a similar squeeze-out right. How - ever, as opposed to the minority security holders of listed liability companies, the minority security holders who have explicitly confirmed in writing their refusal to sell their securities to the offeror, will not be squeezed out at the end of the acceptance period of the offer. The validity of other squeeze-out mechanisms under Belgian law, such as an asset sale to a special pur - pose vehicle, will be subject to scrutiny and may result in director’s liability.
6.11 Irrevocable Commitments Many Belgian companies (both private and listed) are characterised by a concentrated (family) shareholder structure. Consequently, a tender offer for a Belgian listed company is often only successful if the majority/ significant shareholders of the company have commit - ted to tender their shares to the bidder. In practice, a bidder will therefore negotiate with the principal shareholders of the target company before submitting its offer. In this respect, it is not uncommon to obtain the irrevocable commitment of the principal shareholder(s) to tender their shares within the context of the offer. However, the validity of such a commit - ment cannot be fully guaranteed, as a security holder who has accepted within the context of the offer may always withdraw their acceptance at any time during the acceptance period of the offer. Unlike public takeover bids, bids in the context of negotiated business combinations are not subject to specific disclosure requirements. Takeover bids on shares of listed companies are sub - ject to strict disclosure requirements. In this case, only the FSMA is allowed to publicly announce a bid following the notification thereof by the bidder. Upon notification of the bid, the bidder should submit the following information to the FSMA: • information regarding the bid; • any envisaged advertisement or publication; • the draft prospectus; and • if the bidder controls the target, an independent expert’s report. 7. Disclosure 7.1 Making a Bid Public The FSMA will subsequently publish the notification the following working day. No public announcements regarding the bid are allowed prior to such publication. If the target has voting shares listed on a regulated market in a different EU member state, the bidder must also notify its bid in that EU member state in accordance with local regulations.
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