LEBANON Law and Practice Contributed by: Joseph Nasrallah, Jad Skaff and Yasmina Ballout, HNS Legal
be completed more quickly, although the timetable is driven primarily by administrative filings and regula - tory approvals rather than negotiation complexity. 6.2 Mandatory Offer Threshold Lebanese law does not provide for a mandatory ten - der offer threshold in the classic sense. Acquiring con - trol of a listed company does not automatically oblige the acquirer to purchase the shares of all remaining shareholders. Public acquisition offers are instead governed by the BSE bylaws. Under its Article 162, a bidder launching a public offer must specify the minimum and maxi - mum number of securities and voting rights it intends to acquire. The bidder is therefore free to determine the scope of the acquisition and is not legally required to acquire all outstanding shares. However, the regulations impose a procedural trig - ger. A person seeking to acquire more than 10% of the voting rights in a listed company, or a participa - tion capable of leading to effective control, must sub - mit a draft public tender offer to the Stock Exchange authorities. The rule requires the transaction to be conducted through a public offer mechanism but does not convert it into a mandatory buyout of minor - ity shareholders. In practice, Lebanese law distinguishes between a tender offer trigger and a mandatory offer obligation: significant acquisitions may require launching a public offer, yet the bidder is not compelled to acquire all remaining shares. Accordingly, Lebanese law regulates when a tender offer must be launched, but not the percentage of shares that must ultimately be acquired for the offer to succeed. 6.3 Consideration In Lebanon, acquisitions are most commonly struc - tured as cash transactions. In private companies, the purchase price may be paid in instalments, and sellers commonly require security, such as a pledge over the transferred shares, to secure deferred amounts.
In listed companies, acquisitions are typically con - ducted through a public tender offer in which the bid - der offers cash to all shareholders, while share con - sideration is uncommon. Mergers differ in structure. Rather than a purchase price, the surviving company issues shares to the shareholders of the absorbed company according to an agreed exchange ratio. Lebanese law permits only a limited cash adjustment not exceeding 10% of the nominal value of the shares issued, resulting in a com - bination of ownership rather than a cash sale. Where valuation uncertainty exists, parties frequently use earn-outs or deferred payment mechanisms to bridge price expectations and allocate risk based on future performance. 6.4 Common Conditions for a Takeover Offer In Lebanon, the permissibility of conditions in a takeo - ver offer depends on the type of company involved. For private companies, parties have broad contractual freedom and may condition the transaction on matters such as due diligence, financing or the absence of a material adverse change. For listed or regulated companies, regulatory approval becomes decisive. Public takeovers are supervised by the CMA, and a bidder cannot rely on vague or discretionary conditions to withdraw once the offer is announced. Transactions may also require competi - tion clearance and, in regulated sectors such as bank - ing, prior approval from the competent authority. Accordingly, takeover conditions are largely negotia - ble in private deals, but acquisitions of listed or regu - lated companies are primarily driven by mandatory regulatory approvals. 6.5 Minimum Acceptance Conditions Lebanese law does not impose a statutory minimum acceptance condition for public tender offers. Unlike jurisdictions that require the bidder to obtain a fixed percentage of shares (such as a majority control threshold), the bidder is free to determine the mini- mum number of shares it wishes to acquire.
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