EGYPT Law and Practice Contributed by: Mohamed Hashish, Heba El Abd and Mariam Rabie, Soliman, Hashish & Partners
It is worth noting that in recent years, the FRA has taken steps towards launching a derivatives market in Egypt. In December 2024, Dr Islam Azzam, the vice chairman of the FRA, announced that the FRA is expe - diting the establishment of the derivatives market in collaboration with the EGX, to mitigate the impact of price fluctuations, enabling businesses of all sizes to hedge against currency and interest rate risks, and to effectively manage the risks associated with a diverse range of investment instruments. 4.5 Filing/Reporting Obligations Derivatives are subject to the control and oversight of the FRA, EGX and ECA. As highlighted above, eco - nomic concentrations meeting the stipulated thresh - olds under the Antitrust Law must obtain the pre- approval of the ECA and/or FRA (as the case may be). 4.6 Transparency In a public tender offer, the file submitted by the bidder to the FRA for the potential offer must contain spe - cific documents and information, including, inter alia, a memorandum containing certain information such as, inter alia, the objectives/purpose of the bidder with respect to the tender offer and the main aspect of the bidder’s plans for the target company for the 12 months following the successful completion of the transaction. The bidder is required to provide its plans and intentions with respect to, inter alia, any potential restructuring of the target company, any strategies for expansion on a global scale and any sale of shares, and its intentions towards the workers of the target company. In the acquisition of private companies, on the other hand, the shareholder is not required to disclose its purpose or intention for the transaction. However, there may be such an obligation depending on the parties’ agreement prior to the execution of the trans - action.
target company are under obligation to disclose the tender offer as follows: • (a) Disclosure by the target company: The target company shall disclose to the FRA and EGX the potential tender offer immediately upon (i) noti - fication by the bidder of its intention to make a purchase offer, (ii) signing a memorandum of understanding, a letter of intent, an agreement to conduct an examination thereof, or any other bind - ing or non-binding agreements or similar docu - ments, or serious negotiations regarding a potential purchase offer, or (iii) a tangible impact on trading or the price of the shares of the target company as a result of the spread of speculation over a poten - tial purchase offer. • (b) Disclosure by the shareholders of the target company: Upon being notified by the bidder of its intention to submit the purchase offer, the share - holders of the target company owning more than one-third of the target company’s share capital shall immediately disclose to the FRA in any of the cases under (a) above, if there is an agreement between the shareholders and the bidder of which the target company was not notified. On the other hand, the law does not require any pub - lic announcement with respect to shares that are not publicly listed. However, public announcement of a transaction may be required in cases such as, inter alia, the ECA’s announcement of an economic con - centration to allow third parties to submit their views on the said transaction. 5.2 Market Practice on Timing The failure to abide by the legally stipulated time limits of the disclosure or reporting requirements of tender offers may lead to the invalidity of the tender offer. Therefore, the disclosure obligations must be fulfilled within the legally prescribed timeline. 5.3 Scope of Due Diligence As a general rule under the Civil Code, the seller is not answerable for any defects of which the purchas - er was aware at the time of the sale or any defects that could have been discovered by the purchaser by examining the subject of the sale with the care of a
5. Negotiation Phase 5.1 Requirement to Disclose a Deal
In a public tender offer for shares that are publicly listed, the target company or the shareholders of the
453 CHAMBERS.COM
Powered by FlippingBook