LEBANON Law and Practice Contributed by: Joseph Nasrallah, Jad Skaff and Yasmina Ballout, HNS Legal
form and registered office of the companies involved, the purpose and conditions of the merger, and the valuation of assets and liabilities. It also specifies the financial closing date adopted for the operation. Importantly, the merger plan sets out the share exchange ratio indicating how many shares each shareholder of the absorbed company will receive in the surviving company, together with any permitted cash adjustment and any merger premium. This infor - mation enables shareholders to understand the eco - nomic impact of the transaction, including the effect on ownership and dilution. Shareholders are given access to this informa - tion before the extraordinary general meeting that approves the merger and the resulting issuance of shares, allowing them to make an informed decision on the transaction. 7.3 Producing Financial Statements In a public tender offer, the bidder is not generally required to publish audited or pro forma financial statements as part of the offer documentation. The disclosure regime focuses primarily on the terms of the offer and the bidder’s ability to perform it rather than on full financial reporting by the bidder. Instead, listed companies themselves remain subject to peri - odic financial disclosure obligations. However, the authorities may require evidence of the bidder’s financial capacity. In particular, the bidder must demonstrate the availability of funds and provide appropriate guarantees supporting the offer price. In regulated sectors, especially banking and financial services, the requirements are more stringent: the pro - posed acquirer must submit documentation regarding its financial standing and the source of funds in order to obtain regulatory approval. Outside the public offer framework, financial infor - mation is often requested as a matter of practice. In negotiated transactions, sellers commonly ask for financial statements or proof of solvency before grant - ing exclusivity or entering into binding agreements, although this arises from contractual protection rather than a statutory obligation.
As to accounting standards, financial statements in Lebanon are generally prepared in accordance with International Financial Reporting Standards (IFRS), which are widely applied by Lebanese companies, particularly listed and regulated entities. 7.4 Transaction Documents There is no general obligation in Lebanon to publicly disclose the full transaction documents. In practice, the contractual documentation is made available only to the shareholders whose approval is required, allow - ing them to review the terms before voting at the gen - eral meeting. For listed companies, disclosure operates different - ly. The market is informed through the tender offer announcement and the notices issued by the BSE, which present the principal terms of the transaction without reproducing the full agreements. In addition, the resolutions approving the transaction and the fil - ings submitted to the Commercial Register become accessible to the public. From a legal perspective, the effectiveness of the transaction depends on the completion of corporate formalities rather than the publication of the contracts themselves. A business combination takes effect upon registration with the Commercial Register or, where applicable, upon registration of the minutes of the shareholders’ meeting that approved the opera - tion (subject to any permissible agreed effective date). Accordingly, Lebanese law relies on approval and reg - istration for legal validity, not on full disclosure of the underlying documentation.
8. Duties of Directors 8.1 Principal Directors’ Duties
In a business combination, the board of directors reviews and negotiates the proposed transaction and submits it to the shareholders for approval. Directors must act in good faith and with due care, determine whether the transaction serves the corporate interest, and provide shareholders with sufficient information to make an informed decision.
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