BAHAMAS Law and Practice Contributed by: Michelle Neville-Clarke, Lethea Carey and Stan Burnside, Lennox Paton
7.3 Producing Financial Statements Under Bahamian law, take-over bid circulars must include detailed information about the offer and the parties involved. When an exchange of securities is part of the transaction, the circular must include finan - cial statements of the offeror or issuer, including pro forma balance sheets and income statements reflect - ing the exchange based on the offeree’s most recent audited financials. The circular must also describe the basis of preparation and provide basic and fully diluted earnings per share. The Securities Industry Act 2024 and the Take-Over Rules do not mandate a specific accounting stand - ard, but in practice, financial statements are prepared under International Financial Reporting Standards (IFRS). In limited cases, such as for foreign bidders listed on major international exchanges, other recog - nised standards, such as US GAAP, may be permit - ted upon formal application. IFRS is the default to ensure transparency, consistency and comparability for investors and regulators in The Bahamas. 7.4 Transaction Documents Under Bahamian law, there is no general obligation to disclose every transaction document in full to the public in a takeover bid or merger. The primary regime governing disclosure is the Securities Industry (Take-over) Rules, 2019, as amended. In the context of public takeover bids involving listed companies, the rules require that the offeror prepare and furnish a takeover bid circular containing specified items and disclosures, but they do not mandate public distribu - tion of every underlying transaction document in its complete form. The circular must disclose core infor - mation such as the identity and contact details of the offeror and any concert parties, the class and rights of the offeree’s securities, ownership and trading data where applicable, the terms and conditions of the bid, financing arrangements and material information nec - essary for shareholders to make an informed decision. Where the bid contemplates an exchange of securi - ties, the Rules expressly contemplate the inclusion of the offeror’s or other issuer’s financial statements in the circular, including a pro forma balance sheet and income statement reflecting the exchange, the basis of preparation of those pro forma statements and related earnings per share information, all in a
form consistent with the prospectus-style disclosures required for such an exchange. This reflects a framework in which summarised details and specific filings are disclosed publicly, while the full set of transactional documents may remain with the Securities Commission and the parties, except to the extent required to be disclosed or made accessible to shareholders and regulators. The Securities Com - mission retains the power to require the submission of documents for review and, in certain circumstances, to direct disclosure of material transaction documents to shareholders to ensure informed decision-making. Therefore, while full documentary disclosure is not universally required, the regime obligates substantial, structured disclosure and, in exchange-offer sce - narios, the preparation and presentation of financial statements in accordance with the applicable stand - ards and notes, with the likelihood of Commission access to underlying documents as part of regulatory oversight. In the private or non-listed context, private mergers or acquisitions typically involve non-public handling of documents, though government approvals such as the Bahamas Invest Authority and/or Central Bank of The Bahamas may require copies of specif - ic instruments such as the transaction documents, board resolutions or share registers, particularly for designated or regulated transactions. The framework thus balances investor protection through transpar - ent disclosure in the published circular with regulatory access to the underlying materials, while not univer - sally mandating the public release of every transaction document in full. Under Bahamian law, the primary duties of directors derive from the Companies Act 1992 (as amended) (the “Companies Act”) and, for international business companies, the International Business Companies Act 2000 (as amended) (the “IBC Act”). Section 79 of the Companies Act provides that, subject to any unanimous shareholder agreement, directors shall exercise the powers of the company and direct the management of its business and affairs. Section 81 imposes a duty on every director and officer to act 8. Duties of Directors 8.1 Principal Directors’ Duties
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