BAHAMAS Law and Practice Contributed by: Michelle Neville-Clarke, Lethea Carey and Stan Burnside, Lennox Paton
tion, the ability to appoint or remove directors and veto or consent rights over specified “reserved mat - ters,” such as the issuance of new shares, significant indebtedness, disposal of major assets, or amend -
a statutory squeeze-out. Under the IBC Act 2000, members holding 90% of the votes can direct the redemption of the remaining shares at the original offer price, in accordance with the Take-over Rules 2019 and statutory safeguards to ensure fairness and market integrity. Full ownership can also be achieved via other restruc - turing tools. Court-sanctioned schemes of arrange - ment under the Companies Winding Up Amendment Act 2011 can transfer 100% of a company’s shares without a separate squeeze-out. Mergers or consoli - dations under the IBC Act 2000 may use the 90% threshold to redeem minority shares and the 2023 IBC Act amendments introduced demergers, enabling corporate restructuring to achieve or enhance control with regulatory approval. 6.11 Irrevocable Commitments Under Bahamian law, takeover regulation differs sharply between public or regulated entities and private transactions. For public entities governed by the Securities Industry (Take-Over) Rules, 2019 (as amended in 2020), shareholders are not typi - cally required to provide irrevocable commitments to tender or vote. The Securities Commission of The Bahamas enforces a framework that emphasises fair treatment, minority protection and equal informa - tion disclosure and prohibits side arrangements that confer unequal benefits. Offer mechanics are highly structured, requiring press notices, deposit and with - drawal regimes, minimum offer periods and appoint - ment of an independent adviser to assess the fairness of the bid. Any increase in consideration must apply to all securities taken up. Offeree directors must act in a fiduciary capacity, with responsibility statements accompanying bid documents to ensure informed shareholder decisions. By contrast, private M&A transactions are far more flexible. Where the Take-Over Rules do not apply, par - ties can lawfully negotiate irrevocable commitments, bespoke collateral arrangements, or other tailored terms, provided they comply with general Bahamian corporate law and the company’s constitutional docu - ments. The strict symmetry and minority protections mandated for public transactions do not constrain these private deals.
ments to constitutional documents. 6.8 Additional Governance Rights
In The Bahamas, a bidder that does not seek 100% ownership of a target may obtain additional govern - ance rights through contractual arrangements and amendments to the target’s constitutional documents, including its Memorandum and Articles of Associa - tion. These rights are commonly set out in a share - holders’ agreement to regulate relationships among shareholders and supplement statutory protections. Typical governance rights include board representa - tion, the ability to appoint or remove directors and veto or consent rights over specified “reserved mat - ters,” such as the issuance of new shares, significant indebtedness, disposal of major assets, or amend - ments to constitutional documents. Additional protections may include pre-emptive rights to prevent dilution and tag-along rights allowing the bidder to participate in sales by other shareholders on the same terms. These provisions are often reflected both in the shareholders’ agreement and the compa - ny’s constitutional documents to ensure enforceabil - ity. In regulated sectors, such arrangements remain subject to approval by the relevant regulator, ensur - ing compliance with licensing, capital and governance requirements while allowing the bidder to exercise meaningful influence despite holding a minority or partial stake. 6.9 Voting by Proxy Shareholders in The Bahamas can vote by proxy. A shareholder has the right to appoint a person or com - pany (who does not necessarily have to be a share - holder) to represent them at a meeting. The proce - dures for proxy appointment are normally outlined in the company’s Articles of Association. Typically, the appointment must be made in writing and signed by the shareholder or an authorised attorney. 6.10 Squeeze-Out Mechanisms In The Bahamas, minority shares remaining after a successful tender offer are typically acquired through
78 CHAMBERS.COM
Powered by FlippingBook