BERMUDA Law and Practice Contributed by: Natalie Neto, Rachel Nightingale, Hannah Tildesley and Marah Smith, Walkers
6.4 Common Conditions for a Takeover Offer There is no specific takeover code in Bermuda and there are no specific Bermuda law requirements restricting the use of offer conditions. Conditions for a takeover offer would be subject to the commercial requirements of the bidder (and the target if a recom - mended offer). 6.5 Minimum Acceptance Conditions Please see 2.1 Acquiring a Company regarding the applicable acceptance thresholds for a tender offer under Section 102 of the Companies Act. 6.6 Requirement to Obtain Financing Any requirement to obtain financing would need to be set out in the plan of amalgamation or merger, but it is common for transactions to be conditional upon financing being obtained and upon evidence being provided, in the form of a commitment letter or similar. Rarely, pre-funded escrow accounts may be required, in order to evidence the availability of the considera - tion. 6.7 Types of Deal Security Measures There are no prescribed rules under statute or com - mon law with respect to deal security measures in a transaction. However, many Bermuda companies are based in the United States or Europe, and the influ - ence of the laws of the relevant jurisdiction is often felt. It is very common for the transaction agreement to be governed other than by Bermuda law, in which case the availability of deal security measures may be limited or restricted in accordance with the relevant laws. In Bermuda, the measures most often seen are Break fees are becoming increasingly standard in transaction agreements. For example, in the case of a proposed amalgamation or merger, the agreement and plan of merger/amalgamation may include a provision for a fee to be paid to the original bidder if the board of the target company changes its recommendation and supports a competing bid where the acquisition takes place within a certain period of time from the date of the agreement. When the board of a target is considering whether or not to agree to accept a break fee provision, care must be exercised to ensure that as follows. Break Fees
the requirements of any applicable listing or takeover rules.
6. Structuring 6.1 Length of Process for Acquisition/Sale Under Bermuda law, there is no statutory timeframe for acquiring or selling a company. Timing will depend on: • the manner in which the acquisition is being struc - tured (and compliance with any statutory require - ments or timelines); • the provisions of the bye-laws (which may include provisions that incorporate takeover code-type provisions); • the rules of any applicable stock exchange if the target’s shares are listed; • any governmental approvals required (for example, Section 114B and Section 129A licences); and • whether or not the target is regulated (including the requirement for the approval of the Bermuda and foreign regulators, for example, where the target is a holding company and the subsidiaries are regu - lated in Bermuda and elsewhere). In private acquisitions involving unregulated enti - ties, an acquisition may be effected within a matter of weeks. Where a target is listed and/or regulated, completion usually takes a few months in order to ensure that all applicable listing rules have been com - There are no requirements under Bermuda law for a mandatory offer threshold. Please see 5.5 Definitive Agreements regarding the requirements for tender offers. 6.3 Consideration There are no restrictions under Bermuda law on the type of consideration that can be offered or the com - bination of different types of consideration (eg, shares and cash). A wide variety of consideration structures have been seen of late, involving combinations of shares in either the surviving or amalgamated com - pany (or its parent), cash or promissory notes. plied with and approvals obtained. 6.2 Mandatory Offer Threshold
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