COLOMBIA Law and Practice Contributed by: Jaime Trujillo and Natalia Ponce de León, Baker McKenzie
or intend to hold 5% or more of voting shares (but less than 25%) avoid the disclosure obligations by acting through two or more holding vehicles, none of which exceed the 5% threshold. Some consider such strategy an aggressive approach. If the holding vehicles are given discretion on how the shares are to be voted (pursuant to a mandate, a trust, a swap or otherwise) then the shareholder is not considered to be the ultimate beneficial owner and thus no reporting obligations apply, even under the most conservative of approaches. Filing Obligations Public tender offers are mandatory when: • any person (or group of persons constituting the same beneficial owner) intends to acquire shares representing 25% or more of the voting shares of a listed company; • any person (or group of persons constituting the same beneficial owner) who already owns 25% or more of the voting shares of the relevant company, intends to acquire an additional 5% or more of the voting shares of a listed company; • any person (or group of persons constituting the same beneficial owner) has acquired voting shares representing 25% (or representing more than 5% if the buyer already owns 25% or more) or more of a listed entity company as a result of a merger, in Colombia or abroad (in which case an “ex- post” public tender offer must be launched within three months of the transaction, unless the buyer divests the relevant shares within three months of the merger); • any person (or group of persons constituting the same beneficial owner) holds more than 90% of the shares of the public company, if: (i) this thresh - old was reached by other means than a public tender offer for all of the shares in the company; and (ii) the minority shareholders owning at least 1% of the voting shares of the target company request the launch of a public tender offer (in which case the public tender offer must be launched within three months of the date on which the 90% threshold was exceeded); or • the shareholders of the listed company decide to delist the company by a simple majority sharehold -
er vote (as opposed to a unanimous shareholder vote). 4.3 Hurdles to Stakebuilding A listed company may not introduce higher or lower reporting thresholds to facilitate stakebuilding via arti - cles of incorporation or by-laws. Stakebuilding is limited in Colombia by a combination of the following: • the concept of beneficial ownership: the “beneficial owner” of a share is defined as the person or group of persons that, directly or indirectly, as a result of a contract or otherwise, has decision-making capacity over such share – ie, the ability or power to vote the share in the election of the manage - ment of the company issuing the share or to direct or control such vote, as well as to sell or encumber the share; • the disclosure obligation triggered for the listed company when the same beneficial owner holds 5% or more of the voting shares of a listed entity; and • the obligation to launch a public tender offer in the situations described in 4.2 Material Shareholding Disclosure Threshold . 4.4 Dealings in Derivatives Dealings in derivatives are permitted in Colombia, pro - The filing and reporting obligations for derivatives dealings, under securities and competition law, are the same as those applicable to the acquisition of shares in publicly listed companies as described throughout this chapter. 4.6 Transparency vided that certain rules are followed. 4.5 Filing/Reporting Obligations When launching a public tender offer, bidders must disclose the purpose of the acquisition and their inten - tion with respect to the control of the company, and explicitly outline their plans regarding the future activi - ties of the target company. Such disclosure must include, where appropriate, plans for the future use of the assets of the listed
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