MALTA Law and Practice Contributed by: George Bugeja, Stuart Firman, Nicholas Curmi and Luke Hili, Ganado Advocates
of understanding entered into between the offeror and the major shareholders of the target on or around the date of disclosure of the offer to the public. These provisions would primarily seek to remove or restrict the target’s ability to solicit competing proposals. Standstill provisions, on the other hand, are not as commonly sought. The negotiation of any such clauses and/or agree - ments shall, however, at all times be subject to the principle of equal treatment of all shareholders of the target (including those which are not necessarily a party to a memorandum of understanding as referred to above, for instance), as provided under Article 3 of the Takeover Directive (as transposed in the Maltese Capital Markets Rules). It is common for acquirers of Maltese private target companies to request exclusivity on a transaction. This exclusivity (when given) is typically for a restricted period of time (generally extendable) and occasionally against a fee. It is also common for a seller of a Maltese private target company to restrict access to information on the private target company, especially when a pool of acquirers is interested in the acquisition. These prac- tices are generally adopted to protect the business of Offer terms and conditions between the parties (in the context of a private M&A transaction) are typically set out and agreed upon in a letter of intent or memoran- dum of understanding where the intention to carry out the proposed acquisition is recorded. In the context of a takeover bid carried out in accord- ance with the Maltese Capital Markets Rules, the offeror will also be expected to draw up and publish an offer document that includes the terms and condi - tions of the offer, as described in further detail in 6.1 Length of Process for Acquisition/Sale . Definitive agreements (generally irrevocable com - mitment undertakings) are typically entered into with major shareholders prior to a tender offer being pub - lished, although the terms and conditions offered to the private target company. 5.5 Definitive Agreements
major shareholders would also need to match those eventually offered to all shareholders and thus reflect - ed in the eventual tender offer. 6. Structuring 6.1 Length of Process for Acquisition/Sale The length of an M&A transaction varies depending on a number of factors, including the nature of the buyer (private equity transactions tend to get concluded faster), the complexity and/or protracted nature of negotiations, the general structure of the proposed transaction and any regulatory approvals required (including foreign direct investment notifications, merger control clearances and change-in-control notifications). In the case of a takeover offer made in accordance with the Maltese Capital Markets Rules, a number of additional hurdles need to be cleared. These include, but are not limited to: • the obligation to announce a bid within seven days of having acquired a “controlling interest” in the target (as defined in 6.2 Mandatory Offer Thresh - old ); • the obligation to draw up and publish an offer document not later than 21 calendar days from the announcement of the bid; • the granting of a three-to-ten-week period (from the date of publication of the offer document) for the target’s shareholders to properly consider the merits of the bid; and • the consideration of any competing bids lodged in the interim period. 6.2 Mandatory Offer Threshold The Maltese Capital Markets Rules (in transposing the relevant provisions of the Takeover Directive) pro - vide that, subject to certain exemptions which may be granted by the MFSA, a mandatory bid shall be lodged where a person acquires a “controlling inter- est” – ie, a holding which, when added to any pre- existing holdings, directly or indirectly gives a person, or persons acting in concert with them, 50%+1 of the voting rights of a company.
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