LEBANON Law and Practice Contributed by: Joseph Nasrallah, Jad Skaff and Yasmina Ballout, HNS Legal
business plans, and transfer protections such as pre- emption, tag-along and drag-along rights. 6.9 Voting by Proxy Under the Code of Commerce, shareholders may be represented at general meetings by proxy or power of attorney. As a general rule, the representative must be another shareholder unless the articles of association allow representation by a non-shareholder, which is commonly permitted in practice. In principle, the proxy should relate to a specific meet - ing and agenda, and an overly broad or unspecified authorisation could be challenged. In practice, howev - er, Lebanese corporate practice accepts broader and even irrevocable powers of attorney granting author - ity to exercise shareholder rights more generally, and resolutions adopted on this basis are routinely filed with the Commercial Register without objection. 6.10 Squeeze-Out Mechanisms In Lebanon, there is no general statutory squeeze- out allowing a majority shareholder to compel minority shareholders to sell once a high ownership threshold is reached. The closest equivalent is a drag-along clause, com - monly included in shareholders’ agreements and reflected in the articles of association, which permits a majority shareholder selling to a third party to require minority shareholders to sell on the same terms. It is purely contractual and only applies if previously agreed. A limited exception exists in the banking sector: under the 2025 Bank Resolution Law, the Higher Banking Commission may order the transfer of a bank’s shares or assets to an acquirer as part of a restructuring, effectively operating as a regulatory squeeze-out despite minority opposition. 6.11 Irrevocable Commitments Bidders typically seek irrevocable commitments from principal shareholders before launching a formal offer, particularly where ownership is concentrated. Nego - tiations usually occur during the pre-announcement stage, often alongside due diligence and prior to any regulatory filing or public announcement.
These undertakings are documented in a support agreement or tender undertaking and are generally drafted as irrevocable to provide the bidder with deal certainty. In some cases, however, they may include a limited “out” allowing the shareholder to withdraw if a clearly superior competing offer is made. As the proposed transaction is disclosed to selected shareholders at this stage, the process is conducted under strict confidentiality arrangements (such as NDAs and restricted disclosure) to avoid insider-trad - ing or market-abuse concerns before announcement. A bid is not made public at the bidder’s discretion. For a listed company, a person wishing to acquire a significant participation must first submit a draft public tender offer to the BSE, usually through a licensed financial intermediary acting on the bidder’s behalf. The offer is initially confidential. The Stock Exchange authorities review the proposed terms, may request clarifications or amendments and, during this review, trading in the securities may be suspended if neces - sary to preserve orderly trading and investor protec - tion. The bid becomes public only once the offer is approved. After acceptance by the SEC, a notice is published in the Official Bulletin of the BSE setting out the terms of the offer and the timetable for sharehold - ers to tender their shares. From that moment, the mar - ket is formally informed and the offer period begins. 7.2 Type of Disclosure Required In Lebanon, the issuance of shares in the context of a business combination is disclosed through the merger plan rather than through a separate securities disclo - sure document. 7. Disclosure 7.1 Making a Bid Public Before new shares are issued in a merger, the compa - nies must prepare a written merger plan, deposit it with the Commercial Register and publish a summary. The document informs shareholders of the essential ele - ments of the transaction, including the identity, legal
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