GHANA Law and Practice Contributed by: Victoria Bright and Justice Oteng, Addison Bright Sloane
entitle that person to exercise effective control of the target company, unless the takeover procedures pro - vided for under Rule 5 are complied with. Some of the restrictions imposed by regulators on offer conditions include the following. • any purchase of shares from unissued shares, provided that the acquisition does not result in the purchaser owning 50% or more of the shares; • any purchase of shares arising from an increase in authorised share capital; • the acquisition of shares through inheritance; • purchases made in connection with foreclosure proceedings involving a duly constituted pledge or security arrangement, where the acquisition is made by the debtor or the creditor; • purchases made in connection with privatisation undertaken by the government of Ghana; and • purchases made in connection with liquidation or insolvency under court supervision. However, a takeover offer shall not be conditional upon the offeror approving or consenting to payments being made to any director of the offeree as compen - sation for loss of office or retirement from office. 6.5 Minimum Acceptance Conditions The minimum thresholds vary across sectors. For entities regulated by the Bank of Ghana under the Banks and Specialised Deposit-Taking Institutions Act 2016 (Act 930), the applicable thresholds are 5%, 20%, 25%, 30%, 50%, or 75% of equity. Public companies are required to obtain a threshold of 30% or more of the voting shares of the company. Mining companies are required to meet a threshold of 20% of the voting power at any general meeting of the mining company. 6.6 Requirement to Obtain Financing In transactions involving private companies, the par - ties are at liberty to determine any financial arrange - ments.
In takeover offers involving public companies, it is a requirement for the bidder to have sufficient resources required to complete the transaction under the SEC Code on Takeovers and Mergers. 6.7 Types of Deal Security Measures Bidders may seek a variety of deal security meas - ures in private M&A transactions through contrac - tual arrangements such as break-up fees, exclusivity agreements, irrevocable undertakings, and non-dis - closure agreements. In the context of public companies, M&A transac - tions must comply with SEC takeover codes, which typically rely on locked-up shares or pre-acquisition In private M&A transactions, additional governance rights may be secured through a shareholders agree - ment. In public companies, comparable rights may be obtained through regulatory mechanisms. These governance rights may include board represen - tation, approval or control over major transactions, veto or consent rights for minority investors, and pre- emption rights. agreements to secure the transaction. 6.8 Additional Governance Rights In the context of public companies, approval from the SEC may be required, and additional sector-specific regulatory approvals may also be necessary for cer - tain industries. 6.9 Voting by Proxy Under the Companies Act 2019 (Act 992), a share - holder who intends to vote by proxy shall deposit the signed instrument to the receiving officer at least 48 hours before the meeting and 24 hours in case of a poll. 6.10 Squeeze-Out Mechanisms The Companies Act allows minority shareholders to be squeezed out under certain conditions. Where an acquirer has obtained 90% of the voting shares in a target company within four months of mak - ing an offer, the acquirer may compulsorily acquire the remaining minority shares. The minority shares
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