LIECHTENSTEIN Law and Practice Contributed by: Alexander Appel and Hemma Kohlfürst, Schurti Partners Attorneys at Law Ltd
6.4 Common Conditions for a Takeover Offer Common conditions for takeover offers are contained in the Takeover Act. While regulators do not interfere unnecessarily with the use of offer conditions, they can decide to restrict the use of offer conditions in certain specific circumstances – eg, if a financial ser - vice provider under the regulator’s supervision is sold as part of an extraordinary liquidation or dissolution. 6.5 Minimum Acceptance Conditions The Liechtenstein Takeover Act includes minimum acceptance requirements if the target company is a listed company. Therefore, a mandatory takeover bid is triggered by the direct acquisition of more than 30% of the offeree company’s voting securities or by the indirect acquisition of a controlling stake of 30% in such company. Individuals acquiring such a majority shareholding – whether acting alone or in concert with other persons – are obliged to notify the FMA with - out undue delay and to make an offer for all securi - ties issued by the target company within 20 days, in accordance with the Takeover Act. The Takeover Act also allows for certain limited excep - tions from the obligation to submit a mandatory take - over bid. Under the Takeover Act, the obligation to launch a mandatory takeover bid also extends to the indirect acquisition of control (of more than 30% of the share capital of the target company). Furthermore, the offeree company is entitled to opt out of the afore - mentioned thresholds and requirements by including adequate opting out clauses in its articles. 6.6 Requirement to Obtain Financing It is possible to condition a business combination on the bidder obtaining financing. However, it is more common for the bidder to ensure it has adequate financing before submitting a formal bid or entering into negotiations on a business combination. 6.7 Types of Deal Security Measures Break-up fees and non-solicitation provisions are often agreed between the parties of a transaction, but force-the-vote provisions are not very frequent in Liechtenstein. It is the exception rather than the rule that the shareholder meeting of a target company must vote on or consent to the sale of shares in the target or on a business combination (if the latter does
not result in a merger or demerger). There are other ways of securing the influence of the shareholders on a transaction – eg, through shareholders’ agreements or the representation of the main shareholders on the board of directors of the target. There have been no recent significant changes to the regulatory environment that have impacted the length of interim periods. 6.8 Additional Governance Rights A variety of measures can prove useful to the bidder, such as entering into a shareholder agreement that gives the bidder certain rights to acquire the shares of other shareholders in certain events, or the increase of any quota in the target company’s articles in order to ensure that material decisions cannot be taken with - out the consent of the bidder. In addition, the bidder has an interest in being adequately represented on the board of directors by having delegated board mem - bers appointed. 6.9 Voting by Proxy It is possible for shareholders to vote by proxy. The by-laws of a Liechtenstein company can set forth certain formalities or other requirements for the use of proxies. For instance, it is possible to limit the scope of such authorised representatives to other shareholders, and it is possible for a proxy to repre - sent more than one shareholder. Voting by proxy for bearer shares is more complicated (than for registered shares) since it involves the assistance of a custodian. 6.10 Squeeze-Out Mechanisms The Liechtenstein Takeover Act contains a statutory squeeze-out mechanism. Certain rules of general company law provide for the buyout of a shareholder in cases of serious obstruction, but the threshold is very high. The squeeze-out rules under the Takeover Act are confined to Liechtenstein companies that are listed on a stock exchange; they do not apply to any pri - vate Liechtenstein company. Under the Takeover Act, a bidder who, upon expiry of the term of the bid, owns at least 95% of the voting rights and of the offeree company’s capital that entitles them to vote is entitled to request the FMA to order the nullity ( Kraftloserk -
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