LUXEMBOURG Law and Practice Contributed by: Marcus Peter and Kate Yu Rao, GSK Stockmann SA
rities representing 95% or more of the share capital and 95% or more of the voting rights, the offeror is entitled to squeeze out the minority shareholders, if any. To exercise the squeeze-out right, the majority share - holder must first inform the CSSF, committing to complete the squeeze-out, and then inform the target company and make the decision public without delay. The information must be made accessible quickly and on a non-discriminatory basis. Within one month of notification to the CSSF and the target company, the majority shareholder must com - municate the proposed price and a valuation report of the securities, followed by providing the information without delay to the company concerned and mak - ing it public. Minority shareholders may oppose the proposed price of the squeeze-out, in which case the CSSF must determine the final price within three Although allowed, irrevocable commitments are not commonly implemented. Prospective bidders tend to prefer obtaining the control of a block of shares bought from a core/majority shareholder. Parties mainly negotiate for irrevocable commitments to ten - der the shares to acquire a key shareholding before filing the tender offer. months from the opposition deadline. 6.11 Irrevocable Commitments In accordance with the Takeover Law, a decision to make a bid must be notified to the CSSF and made public by the bidder. In addition, the board of directors of the target company and the bidder must inform the employee representatives as soon as the bid has been made public. After announcing its decision to make a bid, the bid - der must draw up an offer document containing the necessary information for the shareholders of the target company to reach a proper and duly informed decision on the bid. Before publishing the offer docu - ment, a draft of it must be submitted to the CSSF for 7. Disclosure 7.1 Making a Bid Public
approval within ten business days from the day the bid was made public. 7.2 Type of Disclosure Required Under the Takeover Law, the offer document must contain the terms of the bid, the identity and other details of the bidder, the securities for which the bid is made, and all the conditions to which the bid is sub - ject, etc. The mandatory information to be included in the offer document is set out in Article 6 (3) of the Takeover Law. In addition, the board of directors of the target com - pany must communicate its opinion on the bid by drawing up and making public a document setting out its opinion and the arguments on which it is based. The document shall include the board’s view on the effects of implementing the bid on all the company’s interests, and more specifically on employment, and the bidders’ strategic plans for the target company and their likely repercussions on employment and the location(s) of the company’s place(s) of business as set out in the offer document. 7.3 Producing Financial Statements The offer document usually includes information regarding the target company’s financial status. Finan - cial statements are made public annually in the RCS. 7.4 Transaction Documents In principle, the approved offer document must be disclosed in full. The target company and the bid - der may refrain from disclosing sensitive information (eg, information containing business secrets) where the disclosure would be detrimental to the important interests of the target company or of the bidder.
8. Duties of Directors 8.1 Principal Directors’ Duties
According to Luxembourg law, the management body of the target company shall act neutrally and in the best corporate interest of the target company. It is also obliged to comply with the provisions of the Corporate Law and the articles of association of the target com - pany. This includes the obligation to manage the com - pany’s business in good faith with prudent care and to
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