CYPRUS Law and Practice Contributed by: Kyriacos Scordis, Anna Borovska and Constantinos Kazamias, Scordis, Papapetrou & Co LLC
must be specified, otherwise approval will not be granted. CySEC will not permit the submission of a partial takeover bid: (a) if the bidder has acquired interest in shares in the target during 12 months before or at any time after the application for CySEC’s consent; (b) if the bidder aims to acquire 30–50% of the voting rights of a company; and (c) unless the conditions as specified in 6.3 Con- sideration are met. • The equitable price, as referred to in 6.3 Consid- eration , is met; in case of a voluntary bid, it is in CySEC’s discretion to allow a lower price. • A public bid for the acquisition of the target’s secu - rities will be considered successful if the total of the bidder’s voting rights after the bid give it 50% or more of the voting rights in the company. • Squeeze-out rights will be triggered when the bid - der acquires 90% of the voting rights in the target company via a public offer. • All holders of the same class of shares of the target company must be treated equally and must have adequate information so that they can reach a properly informed decision. • Mandatory bid provisions will be triggered when any person, as a result of their own acquisition or the acquisition of persons acting in concert with them, acquires 30% or more of voting rights in that company either directly or indirectly, and such person is obliged to make a bid for the outstand - ing securities at a fair price, at its earliest opportu - nity, to all the holders of the remaining securities. The mandatory public bid provisions are in effect triggered when a bidder, who prior to the bid held less than 30% of the voting rights in a company, acquires more than 30% of the voting rights in such a company, or where a holder of between 30% and 50% of the voting rights wishes to increase its shareholding within the company. 6.6 Requirement to Obtain Financing Buyers in M&A transactions may require third-party financing to acquire shares in a target company. It is not uncommon in the case of a private company that the parties do agree that the transaction will close only once the buyer has secured the necessary financing.
However, if the acquisition involves a publicly listed company, it is a statutory requirement that the bid - der has the necessary financial capability, and that financing has been secured by a credit institution or organisation and will remain secure until the day of payment. The announcement of the intention to make a public offer must include a report on the actions taken to ensure payment of the consideration price, where this is to be paid wholly or partly in cash. Following the impact of the war in Ukraine, it has become more challenging for parties to an M&A deal to obtain financing for additional funding in view of the increased compliance requirements with regards to both due diligence and sanctions. 6.7 Types of Deal Security Measures There are no express restrictions that would prevent a target from agreeing to any security measures. In relation to fees (whether coined as commissions or break fees), special care should be taken by the direc - tors of the company to act in the best interests of the company and not to act in contravention of provisions concerning the provision of commissions (there is a statutory upper limit of 10% and other conditions) and the provisions on financial assistance. It is very common to include exclusivity and confiden - tiality provisions as well as non-solicitation clauses. In addition, it is not unusual for M&A agreements to Depending on the type of company, a bidder inter - ested in enhancing corporate governance or seeking to secure additional governance rights has a variety of options available. For example, in the case of private companies, such a bidder may include such rights in either a sharehold - ers’ agreement or by way of an amendment to the articles of association of the company in question. Possible options include: • enhanced voting thresholds; • weighted voting rights; • classes of shares; • lock-in periods; contain lock-in or exclusivity clauses. 6.8 Additional Governance Rights
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