BRITISH VIRGIN ISLANDS Law and Practice Contributed by: Matthew Cowman, Alex Drysdale, Rosalind Nicholson and Omonike Robinson-Pickering, Walkers
• an acceptance form; and • notices of intention to acquire shares (where the remainder are being compulsorily redeemed). The extent to which the target is involved in the com - munications will depend on whether it is recommend - ing that shareholders accept the offer and the require - ments of any applicable listing or takeover rules. 6. Structuring 6.1 Length of Process for Acquisition/Sale Under BVI 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 constitutional documents (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 foreign governmental approvals required; and • whether or not the target is regulated (including the requirement for the approval of the BVI and foreign regulators, for example, where the target is a hold - ing company and the subsidiaries are regulated in the British Virgin Islands 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 - plied with and approvals obtained. 6.2 Mandatory Offer Threshold There are no requirements under BVI law for a manda -
either the surviving or amalgamated company (or its parent), cash or promissory notes. 6.4 Common Conditions for a Takeover Offer There is no specific takeover code in the BVI and there are no specific BVI 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 recommended offer). 6.5 Minimum Acceptance Conditions There are no minimum acceptance conditions for ten - der offers under BVI law. 6.6 Requirement to Obtain Financing Any requirement to obtain financing would need to be set out in the plan of merger or consolidation and relevant agreements, but it is common for transac - tions to be conditional upon financing being obtained and upon evidence being provided, in the form of a commitment letter or similar. 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 BVI companies are based in the United States or Europe, and the influence of the laws of the relevant jurisdiction is often felt. It is very common for the transaction agreement to be governed other than by British Virgin Islands law, in which case the availability of deal security measures may be limited or restricted in accordance with the relevant laws. In the BVI, the measures most often seen are as follows. Break Fees Break fees are becoming increasingly standard in transaction agreements. For example, in the case of a proposed merger, the agreement and plan of merger 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 com - peting 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 the directors’ fiduciary duties at statute and common law are being properly
tory offer threshold. 6.3 Consideration
There are no restrictions under BVI law on the type of consideration that can be offered or the combina - tion 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
243 CHAMBERS.COM
Powered by FlippingBook