CAMEROON Law and Practice Contributed by: Lynda Amadagana, Elise Ngo Nyobe, Kevin Djomgoue and Cecile Bella, Amadagana & Partners
that the exposure limits on derivatives (5%, 10% and 20%) have been complied with; and • group transparency – compliance with the 35% limit per group requires disclosure of risk concen - tration (cumulative securities and derivatives) to ensure free competition and market stability. 4.6 Transparency Pursuant to an order of COSUMAF, shareholders have to make known their objectives and intentions regard - ing control of the company which forms part of the information package to be provided. In terms of the regulation of COSUMAF, the bidder has the obligation to disclose the transaction by filing an information document along with the offer. 5.2 Market Practice on Timing Market practice in terms of publication deadlines complies with legal requirements. In accordance with CEMAC legislation, foreign direct investments (equity investments or subscriptions for shares in existing or new companies) are subject to the obligation for the investor or their agent to declare the transaction to the Central Bank and the Minister in charge of money and credit at least 30 days before the transaction takes place. (See Sections 118 and 122 of Regulation No 02/18/CEMAC/UMAC/CM on foreign exchange regu - lations in CEMAC of 21 December 2018. Regarding merger transactions, the requirement to register the transaction in the commercial register one month before the first general meeting called to decide on the transaction is an obligation, on pain of nullity (see Sections 194 and 198 of the Uniform Act on Commercial Companies). 5.3 Scope of Due Diligence The scope of due diligence generally conducted in a negotiated business combination is as follows: • the structure and governance of the business; • compliance with general and sectoral regulations; • labour issues; 5. Negotiation Phase 5.1 Requirement to Disclose a Deal
• commercial contracts; • real estate and property issues; • intellectual property and information technology • tax compliance; • current and potential litigation; • financial valuation; and • IT/IP issues. 5.4 Standstills or Exclusivity Before making an offer to purchase a company, a potential buyer will often want to conduct preliminary due diligence on the target company to assess the opportunity and set a price. To govern the use of, or access to, non-public information, the parties to a share purchase agreement will generally enter a con - fidentiality clause or establish letters of intent. In most cases, these will contain a standstill clause, which will generally prohibit the buyer from making a hostile or unsolicited offer for the information for a given period. In general, transactions are often carried out privately and confidentially between companies that are not listed on the stock exchange. In such cases, standstill clauses are not necessary. 5.5 Definitive Agreements To date, there have been no legal restrictions prevent - ing the terms of a takeover bid from being set out in a definitive agreement. The General Regulations of the Central African Financial Market Supervisory Commis - sion provide that takeover bids may be the subject of competing public offers. However, most transactions are not carried out by means of a tender offer, which is therefore not common. 6. Structuring 6.1 Length of Process for Acquisition/Sale The duration of the procedure for acquiring or selling a company depends on the length of the discussions and negotiations, the completion of the acquisition audit, and the administrative formalities following the finalisation of the sale. The duration is generally between six months and three years.
253 CHAMBERS.COM
Powered by FlippingBook