BRITISH VIRGIN ISLANDS Law and Practice Contributed by: Matthew Cowman, Alex Drysdale, Rosalind Nicholson and Omonike Robinson-Pickering, Walkers
4. Stakebuilding 4.1 Principal Stakebuilding Strategies In the case of a tender offer, it is customary for a bid - der to build a stake in the target prior to launching an offer. Tender offers with respect to BVI companies that are listed on a stock exchange are more common in hostile or competitive scenarios, as board approval is not required to commence a tender offer, unlike the other mechanisms for implementing public M&A involving a BVI target company – ie, the BVI statutory merger regime, schemes of arrangement and plans of arrangement – where board support is necessary in each case. 4.2 Material Shareholding Disclosure Threshold Except as mentioned in the following sections, there are no specific BVI disclosure requirements or filing obligations with respect to material shareholding dis - closure triggers, although the disclosure rules of the applicable stock exchange will apply. 4.3 Hurdles to Stakebuilding Subject to restrictions on the ownership of shares con - tained in a BVI company’s Memorandum and Articles of Association and the rules of the applicable stock exchange, there are no restrictions on stakebuilding. 4.4 Dealings in Derivatives Subject to the rules of the applicable stock exchange, there are no restrictions on dealings in derivatives. 4.5 Filing/Reporting Obligations Subject to the rules of the applicable stock exchange and any relevant competition authority with jurisdic - tion, there are no filing or reporting obligations for derivatives with respect to securities disclosure and/ or competition regulations as a matter of BVI law. 4.6 Transparency Subject to the rules of the applicable stock exchange, there is no requirement under BVI law for shareholders to make known the purpose of their acquisition and/ or their intention regarding control of the BVI target company.
ance with their rights and to produce finality for both company and dissenting shareholders within a short space of time. Whilst strictly an issue of Cayman law, the Privy Coun - cil’s decision in Changyou.com Ltd v Fourworld Global Opportunities Fund Ltd and others JCPC/2023/0018 is also of application to BVI company mergers since the relevant statutory provisions governing “short- form” or “vertical” mergers in Cayman and the BVI are materially the same. The Privy Council determined that shareholders dissenting from a “short-form” merger (ie, a merger between a parent company and a subsidiary under Part XVI of the Cayman Islands’ Companies Act) have a right to apply for a “fair value” appraisal as an alternative to accepting the company’s cash offer at the price determined by the company. Whilst the appraisal process is different in the BVI from that in Cayman, the principle with respect to their right to an appraisal applies equally to vertical mergers under BVI law. On the question of the appraisal process itself, in Oasis Core Investments Fund Ltd. & Others v Hollysy Automation Technologies Ltd BVIHCOM2024/0619, 0620, 0621 & 0622, Mithani J held that the procedural timetable imposed by Section 179 of the Act where the company and dissenting shareholders fail to agree the price to be paid for the dissenters’ shares within the initial period of 30 days allowed by Section 179 (8) is mandatory, and the timetable cannot be extended by the court in the absence of all party agreement. This means that, unless the parties mutually agree to vary the statutory timetable, as sanctioned by the BVI Court in Prince Faisal v PIA Investments BVIHC (COM) 2011/03, Section 179 (9) of the Act requires that the entire appraisal machinery – appointment of apprais - ers, selection of the third, fixing fair value and payment – be completed within the 20‑day period prescribed by the statute. 3.2 Significant Changes to Takeover Law There have been no significant changes in the last 12 months.
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