CYPRUS Law and Practice Contributed by: Kyriacos Scordis, Anna Borovska and Constantinos Kazamias, Scordis, Papapetrou & Co LLC
composed of cash consideration and conditional to any applicable squeeze-out provisions. In addition, the implementation of Regulation (EU) No 910/2014 on electronic identification and trust ser - vices for electronic transactions in the internal market (the “Electronic Identification Regulation”), which was incorporated into Cypriot law as the Electronic Identi - fication and Trust Services for Electronic Transactions in the Internal Market Law 55 (I)/2018 (the “Electronic Identification Law”), has facilitated the application and acceptance of electronic signatures at a time when remote-working and restrictions in movement were mandated. 6.2 Mandatory Offer Threshold Private companies in Cyprus do not have any manda - tory offer threshold. According to the provisions of the Takeover Bids Law, the proposed consideration for the acquisition of a public company must be at least equivalent to the highest price paid or agreed to be paid for the respective securities by the bidder or by the persons acting on behalf of the bidder, during the 12 months prior to announcing the bid (the “Equitable Price”). In the circumstance where a bid is voluntary, CySEC may allow for a lower bid price, something which is entirely discretionary. 6.3 Consideration Consideration in M&A transactions can be either in the form of cash, in kind, or both. Private companies are free to decide on the type of consideration, during negotiations. In contrast to that, the Takeover Bids Law states that a bidder can offer cash, shares or a combination of both. If, however, the bid involves cash consideration, the offer must be accompanied by a bank guarantee from a credit institution that the funds are and will remain available until the expiration of the bid. The law explicitly provides for situations when the bidder must provide cash alternatives as part of the consideration offered by the bidder. For example: • when the consideration offered does not include any liquid securities admitted to trading on a regu - lated market;
• when a bidder has acquired shares in the target company within the last 12 months prior to the declaration that a public offer has been made, which amounts to 5% or more of the voting rights of the company; and • when a bidder is exercising a “squeeze-out” and “sell-out” right, or in the case of a “mandatory offer”. In the case of public companies, shares cannot be issued below nominal value. 6.4 Common Conditions for a Takeover Offer A public takeover offer will be subject to the accept - ance conditions specified in 6.5 Minimum Accept- ance Conditions (see also 6.3 Consideration ) and the requisite regulatory shareholder and antitrust approv - als. Additionally, regulatory conditions are imposed in the Takeover Bids Law whereby during the period preced - ing the announcement of the bid and including the expiration of the acceptance period, the bidder and any people acting on the bidder’s behalf may not: • make any arrangements with the target’s share - holders; • enter into any arrangements with people who, even though not members of the target, have voting rights in the target; • deal or enter into any arrangements involving trad - ing in securities of the target company; and • enter into arrangements involving acceptance of a bid on more favourable terms than those offered to the target’s shareholders. 6.5 Minimum Acceptance Conditions The following are some of the regulatory conditions which are imposed for the making of a public offer under the Takeover Bids Law. • An offer document must be published by the bid - der and approved by CySEC. • The bid must be made for the total of the target securities, unless approval has been received from CySEC to make a submission of a partial takeo - ver bid. The minimum and maximum number of securities that the bidder will be bound to accept
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