KUWAIT Law and Practice Contributed by: Ezekiel Tuma, John Cunha and Luis Cunha, ASAR – Al Ruwayeh & Partners
offers may be subject to conditions required by the bidder. However, in the case of a mandatory takeover offer, the bidder may not impose conditions. 6.5 Minimum Acceptance Conditions There is no minimum acceptance threshold for a man - datory takeover; however, the takeover must be con - cluded within 30 days of the date the mandatory or voluntary offer is published. 6.6 Requirement to Obtain Financing Proof of funding is required for a business combina - tion subject to the takeover regime under the CML. It is mandatory for all offer documents to contain a description of how the offer will be financed and to provide the sources of that financing. The principal lenders for any financing must also be identified. 6.7 Types of Deal Security Measures There are no specific rules in Kuwait dealing with break-up fees and similar deal security measures. Par - ties are free to agree specific arrangements to this effect. 6.8 Additional Governance Rights The bidder may enter into agreements with other shareholders in the form of shareholders’ agree - ments. However, in accordance with the Companies Law, the agreement is not binding on the target entity unless its competent authority has approved it. Vot - ing agreements may also be entered into, but must be disclosed where they relate to ownership stakes in excess of the disclosure threshold. 6.9 Voting by Proxy Shareholders may vote by proxy. 6.10 Squeeze-Out Mechanisms At present, Kuwait law does not have provisions that allow a bidder to compulsorily squeeze out any
they were viewed as offering an advantage to certain shareholders over others. Negotiations are typically undertaken prior to submit - ting a draft offer document to the CMA. The irrevoca - ble commitments are drawn up as unilateral undertak - ings and, generally, do not provide a way out for the principal shareholder.
7. Disclosure 7.1 Making a Bid Public
Following the CMA’s approval of the bid, the bidder must immediately announce the approval to Boursa Kuwait on its website and that of the target company, as well as in at least two daily newspapers. The bid document itself must be published on Boursa Kuwait’s website and those of the bidder and the tar - get company. 7.2 Type of Disclosure Required See 4.2 Material Shareholding Disclosure Threshold . 7.3 Producing Financial Statements A bidder is required to provide its audited financial statements for the previous three financial years. The statements must be prepared using an internationally The following documents are considered transaction documents and must be disclosed and made avail - able from the date the bid document is announced: • the advice of the target’s board of directors on the bid; • the articles of association of both the bidder and the target; • audited financial statements of the bidder and the target for the last three financial years; • any reports, notices or documents referred to in the bid document; • any document providing an irrevocable commit - ment accepting the bid; • documents evidencing funding of the bid; and • any other documents required by the CMA. recognised accounting standard. 7.4 Transaction Documents
remaining minority shareholders. 6.11 Irrevocable Commitments
Irrevocable commitments are permitted by the CML Bylaws. However, these have not yet been extensively used in Kuwait and, therefore, their practice continues to evolve. For instance, at one point the authorities did not look favourably upon irrevocable commitments as
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