BERMUDA Law and Practice Contributed by: Natalie Neto, Rachel Nightingale, Hannah Tildesley and Marah Smith, Walkers
5.3 Scope of Due Diligence Due diligence is a standard requirement and is impor - tant in every transaction. Due diligence will be con - ducted in the same way as in many other onshore jurisdictions (for example, in the UK and the US). The scope of due diligence undertaken will usually be lim - ited to corporate, regulatory and (where applicable) employment matters and reviewing any contracts that are governed by Bermuda laws (where the target is an exempted company). Where the target is a local company, the scope would typically be widened to include all commercial and property matters. Following the pandemic, entities are tending to have a more commercial focus on contracts, rather than being limited to considering change of control claus - es. Termination and force majeure clauses are often a focus, to determine the potential impact of another pandemic. There has also been an increasing focus on compliance with corporate governance and ESG matters (where applicable). In an increasingly regulated environment, a due dili - gence process would also include confirmation of compliance with the applicable regulatory laws, including those relating to data protection and anti- bribery and corruption, and also any specific Bermuda regulatory requirements, depending on the nature of the target’s business. Certain information is publicly available in Bermuda, For a fee, anyone can conduct a company search of the records held by the Registrar of Companies, which include: • Certificate of Incorporation; • Memorandum of Association; • registered office address; and • registered charges. Supreme Court Registry Any judgments or legal proceedings can be searched at the Bermuda Supreme Court. including the following. Registrar of Companies
Registered Office At the registered office of the company, the register of directors and officers as well as the register of mem - bers can be requested. BSX Financial accounts, auditor reports and any other fil - ings and announcements of a Bermuda listed com - pany can be requested from the BSX. 5.4 Standstills or Exclusivity Exclusivity for transactions is often requested at the point of entering into formal discussions once a win - ning bidder has been selected. Exclusivity clauses may be incorporated into the heads of terms, or a separate exclusivity agreement may be entered into between the parties. Standstills are not often used in Bermuda transac - tions. 5.5 Definitive Agreements Tender offers may be used in both friendly and hostile transactions. The Companies Act does not prescribe the manner in which a tender offer may be made (except for the timings and thresholds described in 2.1 Acquiring a Company ). It is also possible for an acquisition that originally commenced as a tender offer to be converted into a merger or amalgamation when the applicable thresholds have been met. If the target’s shares are listed, the rules and regulations of the applicable stock exchange, and any takeover rules (which may have been incorporated into the tar - get’s bye-laws) will also need to be complied with in terms of how the tender offer will be communicated to shareholders. Typically, a target shareholder will receive: • an announcement to the shareholders; • an offer document; • an acceptance form; and • notices of intention to acquire shares (where the remainder are being compulsorily acquired pursu - ant to Section 102/103). The extent to which the target is involved in the com - munications will depend on whether it is recom - mending that shareholders accept the offer and on
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