GHANA Law and Practice Contributed by: Victoria Bright and Justice Oteng, Addison Bright Sloane
must be acquired for the same consideration paid to the majority shareholders or the prevailing market price, whichever is higher, and this must occur within two months of reaching the 90% threshold. However, minority shareholders may apply to the court for relief, including an order preventing the compulsory acqui - sition of their shares, within two months of receiving notice. For public companies listed on the GSE, a mandatory offer is triggered to all shareholders. This can result in a squeeze-out where the bidder subsequently reaches the 90% compulsory acquisition threshold. 6.11 Irrevocable Commitments It is fairly standard practice in Ghana to lock in sup - port from principal shareholders before the launch of a takeover bid. These irrevocable commitments are treated as a regular deal protection mechanism. A bid is made by publishing the bidder’s offer in a newspaper of general circulation and, where the company is listed on the Ghana Stock Exchange, by notifying the Securities and Exchange Commission. However, a bidder may only make an announcement where they have sufficient resources to implement the offer in full. A bid is required to be made public where a person acquires, or intends to acquire, more than 30% but less than 50% of the voting shares within a 12-month period; where a person intends to acquire 50% or more of the voting shares; or where a person acquires a company that has effective control of the company. 7.2 Type of Disclosure Required Where new shares are issued as consideration in a business combination, the law requires disclosure through a detailed prospectus or offer document approved by the SEC, together with SEC registration of the new shares offered to the public. 7. Disclosure 7.1 Making a Bid Public The prospectus must set out in detail the terms of the business combination, the valuation agreed by the
parties, the rights attached to the shares, the class of shares being issued, and the effect of the issuance on control and the shareholding structure. Pre-emptive rights must also be addressed. Listed companies are additionally required to notify the GSE and the SEC of any substantial changes in shareholdings and any material business combination. This notification must include information on assets, liabilities, financial statements, the shareholding struc - ture, and any changes in directors. 7.3 Producing Financial Statements Bidders need to provide financial statements in their disclosure documents for public M&A transactions. The financial statements disclosure must comply with the International Financial Reporting Standards. 7.4 Transaction Documents Transaction documents must be fully disclosed to rel - evant regulatory bodies prior to approval, and share - holders before voting on an M&A transaction. 8. Duties of Directors 8.1 Principal Directors’ Duties Under Ghanaian law, the principal duties of directors in a business combination include a duty to: • act in good faith and in the best interests of the company, that is, in the case of private companies, to determine whether the merger is in the com - pany’s best interests and to assess the solvency of the transferee following the transaction; • provide every member of the transferor company with relevant documents, such as the merger proposal, a summary of the key provisions of the transferee company’s constitution, and a statement of members’ rights in the merger, including details of the shares to be allotted and any cash payable; • avoid conflicts of interest and disclose any per - sonal interest in the transaction; and • promote the success of the company in a business combination by carefully considering the interests of shareholders, employees, the community, and the environment.
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