ITALY Law and Practice Contributed by: Roberto Bonsignore, Paolo Rainelli, Gerolamo da Passano and Nicole Puppieni, Cleary Gottlieb Steen & Hamilton LLP
6.5 Minimum Acceptance Conditions The most common minimum acceptance conditions used in voluntary tender offers depend on the bidder’s intentions. Acquiring Control of the Company 50% + 1 of the voting shares gives the bidder math - ematical certainty of controlling ordinary shareholder resolutions (eg, approval of the annual accounts and dividend distributions, and appointment of the board of directors). Two thirds of the voting shares gives the bidder math - ematical certainty of controlling not only ordinary shareholder resolutions but also extraordinary share- holder resolutions (eg, capital increases, mergers and demergers, and amendments to the by-laws). Delisting and Taking the Company Private 90% + 1 of the voting shares allows the bidder to con - duct a “sell-out” procedure leading to delisting and possibly a subsequent “squeeze-out”, and, follow - ing the entry into force of the Capital Markets Reform (see 3.2 Significant Changes to Takeover Law ), to “squeeze-out” the remaining shareholders (see 6.10 Squeeze-Out Mechanisms ). Bidders often initiate the voluntary tender offer with a minimum acceptance condition but retain the right, with certain restrictions, to waive or reduce the thresh - old for such condition before the completion of the tender offer. 6.6 Requirement to Obtain Financing A tender offer cannot be contingent upon the bid - der obtaining financing. The bidder must have all the necessary financing secured before the offer actually commences, with the following specifications: • at the announcement of the decision to launch a voluntary tender offer or when the event triggering a mandatory tender offer occurs, the bidder must ensure it will have all the funds required to com - plete the offer when the time comes; and • before the tender offer period begins, the bid - der must obtain and provide to CONSOB a cash confirmation, typically in the form of a first demand
• a partial rollover by the seller in the buyer’s shares, allowing the seller to share in any future value appreciation of the buyer’s group; • earn-out mechanisms, where a portion of the pur - chase price is contingent upon the target’s future performance; • pre-closing carve-outs, where specific businesses or parts of the target group are sold separately if undervalued by the buyer; • vendor loans or deferred payment terms; and • asset swap transactions. While these instruments are, in principle, also availa - ble in public M&A transactions, they are less common in this context (except, probably, the rollover route), as they may introduce a number of complexities. 6.4 Common Conditions for a Takeover Offer Voluntary takeover bids are irrevocable but may include conditions that must be satisfied in order for the bid to complete. These conditions cannot be dependent on the bidder’s will. Common conditions include: • minimum acceptance threshold – the bid may be contingent upon a minimum percentage of shares being tendered by target shareholders (see 6.5 Minimum Acceptance Conditions ); • regulatory approvals – the bid may require approval from regulatory authorities, such as merger control, FSR, FDI or sector-specific regulatory approvals; and • absence of adverse events – conditions may include the absence of: (a) a material adverse effect; (b) actions by the target outside the ordinary course; (c) defensive actions by the target; or (d) decisions by government authorities prohibit - ing or complicating the transaction. These conditions can typically be waived by the bid - der, except for certain mandatory regulatory approv - als. Mandatory tender offers may not include any condi - tions.
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