CAYMAN ISLANDS Law and Practice Contributed by: Shari Seymour, Kerry Ann Phillips and Michael Lockwood, Maples Group
• all material contracts and licences. A search of the court registers in the Cayman Islands may also be performed and will disclose any Originat - ing Process pending before the Grand Court of the Cayman Islands in which the target is identified as a defendant or respondent. The due diligence process is a collaborative effort, as most Cayman Islands M&A activity is cross-border. 5.4 Standstills or Exclusivity Standstill agreements and exclusivity agreements are not common for Cayman Islands M&A transactions. Due to the cross-border nature of Cayman Islands M&A transactions, deal documents (including stand - still agreements and exclusivity agreements, if used) are negotiated onshore and governed by onshore laws. 5.5 Definitive Agreements It is permissible for tender offer terms and conditions to be documented in a definitive agreement. Due to the cross-border nature of Cayman Islands M&A transactions, tender offer documents (if used) are negotiated onshore and governed by onshore laws. 6. Structuring 6.1 Length of Process for Acquisition/Sale There is no standard length of time for acquiring/sell - ing a business in the Cayman Islands – the time will vary depending upon common factors/procedures, including available financing, due diligence and (if necessary) regulatory approvals. Governmental meas - ures in the Cayman Islands have not created major practical delays or impediments to the deal-closing process. 6.2 Mandatory Offer Threshold There is no mandatory offer threshold in the Cayman Islands.
In relation to CSX-listed target companies, unless the Council Executive Rules of the CSX provide otherwise, the following persons are obliged to make mandatory offers to holders of any class of equity capital and to holders of any class of voting non-equity capital of which such person or persons acting in concert with them hold shares: • any person who acquires shares that (taken together with shares held by such person or held or acquired by persons acting in concert with such person) carry 30% or more of the voting rights of a company; or • any person who, together with persons acting in concert with such person, holds not less than 30% but not more than 50% of the voting rights of a company and such person, or any person acting in concert with such person, acquires in any period of 12 months additional shares carrying more than 1% of the voting right. Offers for different classes of equity capital must be fair and appropriate, having regard to current circum - stances, and the Council Executive of the CSX must be consulted in advance in such cases. 6.3 Consideration Cash and shares (or equivalent equity securities) are equally common forms of consideration for M&A transactions involving Cayman Islands companies. There are no specific common tools used in Cay - man Islands M&A transactions to bridge value gaps between the parties in a deal environment or industry with high valuation uncertainty. The deal documents are usually governed by onshore law (eg, New York or Delaware law) and, as such, the tools used for onshore M&A transactions would typically apply. 6.4 Common Conditions for a Takeover Offer Cayman Islands laws and regulations do not prescribe any conditions for a takeover offer, nor impose any restrictions on offer conditions. Any conditions would be a commercial matter to be agreed among the parties. Typical conditions in a tender offer relate to material matters such as regulatory and shareholder approval or consents.
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