CYPRUS Law and Practice Contributed by: Kyriacos Scordis, Anna Borovska and Constantinos Kazamias, Scordis, Papapetrou & Co LLC
• board representation thresholds or restrictions; • shareholder reserved matters; • tag-along, drag-along rights; and • call and put options. With regards to public companies, shareholders’ agreements are not generally an option, but a number of the aforementioned options (enhanced governance rights) may be included in the company’s articles of association. 6.9 Voting by Proxy This is a matter regulated by the articles of association of a company. The customary practice is to allow a proxy to be appointed to attend and vote at a gen - eral meeting of a company. The permission given to a proxy need not be the same for all the shares in rela - In the absence of a shareholders’ agreement, there are no squeeze-out mechanisms in relation to private companies, albeit capital increase and the corre - sponding dilution (carried out in good faith) may have a substantially similar effect. Similarly, a merger is a matter of relative voting rights and court sanction. In the case of public companies, squeeze-out provi - sions are contained in the Takeover Bids Law. The squeeze-out is triggered when the bidder has no less than 90% of the capital carrying voting rights and no less than 90% of the voting rights in the offeree com - pany or the bidder has obtained or agreed to acquire securities that would bring its participation no less than 90% of the capital carrying voting rights and no less than 90% of the voting rights. The application to trigger the squeeze-out is made by the bidder to CySEC. If CySEC is satisfied that the relevant conditions are met, it issues a decision authorising the offeror to proceed with the squeeze- out procedure in order to acquire the balance of the securities. 6.11 Irrevocable Commitments A bidder may seek irrevocable undertakings from the principal shareholders of the target company to vote in favour of accepting its offer. Such irrevocable tion to which the proxy is appointed. 6.10 Squeeze-Out Mechanisms
undertakings are subject to relevant regulatory condi - tions being met as referred to in 6.3 Consideration , 6.4 Common Conditions for a Takeover Offer and 6.5 Minimum Acceptance Conditions . Furthermore, reservations may be made that if a higher offer is received the undertaking will not be effective. Alternatively, the principal shareholders may prefer to provide a non-binding letter confirming intent to support the bid. In practice, irrevocable commitments can be provided depending on their relevance in the particular trans - action, the target’s market positioning and the antici - pated benefit to the target. A bid is made public through a public announcement by the person intending to make the bid. The bid pro - cess starts when the announcement is made when the bidder has a firm intention to make a bid or once they have acquired securities which trigger the mak - ing of a mandatory bid; obliging them, pursuant to the provisions of the law, to make an announcement where there is a leak or speculation of a proposed transaction. The announcement must be simultaneously made to the following: • the CSE; • CySEC; • the website of the person making the announce - ment; • if the announcement is made by the bidder, to its employees or their representatives and the board of the target company; and • if the announcement is made by the target com - pany, to its employees or their representatives and the board of the bidder. In the event that any announcement will take the form of a press release, the person making the announce - ment must notify it to the CSE and to CySEC so that the official announcement is made as soon as pos - 7. Disclosure 7.1 Making a Bid Public
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