DENMARK Law and Practice Contributed by: Dan Moalem, Jacob Bier, Thomas Enevoldsen and Poul Guo, Moalem Weitemeyer
the majority has taken decisions granting it undue advantages. Threshold of above 90% • When one shareholder holds more than 90% of the shares and votes in a Danish company, that major - ity shareholder is entitled to initiate a compulsory redemption of the minority shares (a “squeeze- out”). Likewise, each minority shareholder has an individual right to demand that the majority share - holder redeems the shares of such minority share - holder. Shareholders’ Agreements In private M&A transactions, shareholders common - ly enter into shareholders’ agreements to regulate governance matters such as board appointments, reserved matters, information rights, and share trans - fer restrictions. It should be noted, however, that under Danish law a shareholders’ agreement is generally not binding on the company itself. Any breach must there - fore be pursued as a contractual matter between the parties to the agreement, rather than as a corporate law matter vis-à-vis the company. 6.9 Voting by Proxy Under Danish company law, shareholders have the right to attend the general meeting by proxy, and have voting rights exercised on their behalf. Proxy has gained greater influence at general meet - ings in Danish publicly listed companies as a result of the Danish Companies Act’s rules on nominees’ right to exercise voting rights, which entered into force in 2022. The proxy must be issued in writing and dated. A proxy may be revoked by the shareholder at any time. 6.10 Squeeze-Out Mechanisms Squeeze-Out Procedure If the Buyer manages to acquire more than 90% of the shares in the target company, the buyer is able to initiate a compulsory redemption (squeeze-out) of the remaining shareholders. • Notice of squeeze-out must be distributed to the shareholders of the target company (in the same manner as general meetings are convened)
and published through the IT system of the Dan - ish Business Authority. It must include a state - ment from the board on the terms and condi - tions, including price, of the squeeze-out, as well as confirmation that the squeeze-out must be accepted or rejected within four weeks, that the shares will be registered in the name of the majority shareholder after this period, and that payment to non-accepting shareholders must be made into a deposit account. • Minority shareholders disputing the redemption price are entitled to request that an independ - ent surveyor will be appointed by Danish courts to make a final and binding valuation which – if higher – will also apply to non-disputing minor - ity shareholders. For non-accepting shareholders whose share of the redemption price is deposited, this request can be made within three months of said deposit (provided they are simultaneously informed about this). Note that this does not apply if more than 90% of the shares have been obtained in connection with a takeover and the squeeze-out occurs within three months thereof. • The cost of the surveyor must as a starting point be paid by the minority having requested the valu - ation. However, if the valuation comes out in favour of the minority, a court may impose such costs partly or fully on the majority shareholder. Timeline As follows, a compulsory redemption can (disregard - ing preparation of materials) be completed within four weeks in respect of becoming a 100% shareholder. If the valuation is disputed, this process will take longer but only be a matter of price – not ownership. 6.11 Irrevocable Commitments General Practice In connection with public takeover offers, it is relatively common for bidders to seek irrevocable undertakings from principal shareholders to tender their shares into the offer. These commitments can strengthen the bid - der’s position when approaching the target board or when competing with alternative proposals. Timing of Negotiations The timing of negotiations over irrevocable commit - ments varies. In some cases, the bidder will secure
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