COLOMBIA Law and Practice Contributed by: Jaime Trujillo and Natalia Ponce de León, Baker McKenzie
3.2 Significant Changes to Takeover Law There have been no significant changes to takeover law in the past 12 months. A change occurred in 2024, to add an additional item in the list of events exempt from the obligation to launch a public tender offer. Note, however, that this regulation was tailor-made to facilitate a particular transaction, the Gilinski pub - lic tender offers, so this particular regulation has not been used in any other transaction. The weaknesses highlighted by the Gilinski public tender offers has prompted certain important listed companies, such as Bancolombia and Argos, to take matters into their own hands by amending their by- laws to shield themselves against future takeovers. The changes are aimed at: (i) expanding the cases where public tender offers are required; (ii) regulat - ing how public tender offers should be priced; and (iii) regulating the effects of subsequent public tender offers, allowing shareholders who sell early to benefit from prices paid later in the process. However, opinions on the enforceability of these amendments are divided. 4. Stakebuilding 4.1 Principal Stakebuilding Strategies Stakebuilding prior to launching non-solicited offers is uncommon, because hostile tender offers themselves are uncommon. Still, bidders are allowed to acquire shares directly in the open market up to an amount that is less than 25% of the voting shares of a given target before hav - ing to launch a public tender offer. 4.2 Material Shareholding Disclosure Listed companies are required to disclose, as special or material information, the fact that a single person has become the beneficial owner of 5% or more of its voting shares. No express equivalent obligation exists for non-list - ed shareholders. In practice, shareholders who hold Threshold Disclosure
sions; (ii) the role of representations and warranties; and (iii) the process for instituting claims. This precedent has been reinforced by another recent arbitral award, Korn Arquitectos S.A.S. vs César Anto - nio Pérez & others (2021), emphasising its relevance and impact in shaping M&A practices in Colombia. The tribunal reached several noteworthy conclusions, which are outlined below. Sandbagging In the absence of a specific provision to the contrary (pro-sandbagging), a buyer cannot claim for damag - es arising from circumstances it was aware of before closing a transaction. Representations and Warranties Representations and warranties are alien to Colom - bian law and are thus difficult to understand within the framework of obligations under civil law, which categorises them as obligations to give, to act, or to refrain from acting ( dar, hacer y no hacer ). However, representations and warranties should be given legal effect and viewed as statements of facts which, if untrue or inaccurate, may lead to indemnification as specified in the acquisition agreement. Nevertheless, if the agreement lacks an indemnity clause or specific consequences for misrepresenta - tions, a misrepresentation could lead to the termina - tion of the agreement or reduction of the purchase price. This can be sought by claiming hidden defects ( vicios ocultos ) under the agreement, or by claiming losses resulting from the breach of the agreement or failure to meet disclosure duties. Claims Process The parties are free to establish the process to insti - tute claims in share-purchase agreements and, if such process is not followed, this may result in the loss of the right to claim. This ruling aligns with the principle that, according to Colombian law, the agreement itself sets out the rules that govern the relationship between the parties ( autonomía de la voluntad privada ).
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