BERMUDA Law and Practice Contributed by: Natalie Neto, Rachel Nightingale, Hannah Tildesley and Marah Smith, Walkers
7.2 Type of Disclosure Required As noted in 7.1 Making a Bid Public , unless the tar- get’s shares are listed, there is no disclosure require - ment for the issuance of shares in a business com - bination. 7.3 Producing Financial Statements There is no requirement for bidders to produce finan - cial statements in their disclosure documents. Under the Companies Act, there is a general require - ment for Bermuda companies to lay financial state - ments before the company’s shareholders in a general meeting. Those financial statements must include: • a statement of the results of operations for the period; • a statement of retained earnings or deficit; • a balance sheet at the end of such period; • a statement of changes in financial position or cash flows for the period; • notes to the financial statements; and • an auditor’s report. It is possible to waive the laying of financial accounts and the appointment of an auditor. If all members and directors of a company, either in writing or at a general meeting, agree that in respect of a particular period no financial statements or auditor’s report thereon need to be laid before a general meeting or that no audi - tor shall be appointed, there shall be no obligation to lay financial statements or appoint an auditor for such period. In that circumstance, the company is still required to maintain records of account at the regis - tered office in such form as will enable the directors to ascertain with material accuracy the financial con - dition of the company, at least on a quarterly basis. A company listed on the BSX need not send financial statements to the members, but may instead send them summarised financial statements. The listed company shall make a copy of the financial state - ments available for inspection by the public at the company’s registered office. Generally, accepted accounting principles in Bermuda include those of Bermuda or a country or jurisdiction
• a holding company and one or more of its wholly owned subsidiaries; or • two or more wholly owned subsidiaries of the same holding company. As the subsidiaries must be wholly owned, these pro - visions would not be particularly useful as a squeeze- out mechanism. 6.11 Irrevocable Commitments Irrevocable voting undertakings are often required in transactions where there is a shareholder who holds a significant portion of the total issued share capital of the target. Where there are significant sharehold - ers involved, discussions will often start early on in the transaction to ensure they are supportive of the deal. Such commitments are typically irrevocable, and the terms would be subject to negotiation (and may include a right to terminate if a superior proposal is received). Under Bermuda law, there are no specific provi - sions requiring a bid to be made public. However, as many Bermuda M&A transactions involve companies whose shares are listed, the rules of the relevant stock exchange would apply and dictate any disclosure requirements. If the company is listed on the BSX, it may be required to disclose certain information to the public. The com - pany would have to keep the BSX informed of any information relating to the company that: 7. Disclosure 7.1 Making a Bid Public • is necessary to enable the BSX and the public to appraise the financial position of the company and the group; • is necessary to avoid the establishment of a false market in its securities; and • might reasonably be expected materially to affect market activity in and the prices of its securities. When an acquirer becomes a shareholder of 5% or more of a domestic issuer, the issuer must notify the BSX.
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