BAHAMAS Law and Practice Contributed by: Michelle Neville-Clarke, Lethea Carey and Stan Burnside, Lennox Paton
guide regulatory approvals from authorities such as the Central Bank of The Bahamas and the Securities Commission of The Bahamas. Financial and valuation advisers provide independent valuations and fairness opinions to help directors assess transaction terms, pricing, synergies and impacts on minority share - holders. Tax and regulatory advisers analyse fiscal consequences and propose structures that optimise benefits while ensuring compliance with Bahamian tax and regulatory norms. In transactions presenting potential conflicts of inter - est, boards may establish special committees of independent directors who retain separate legal and financial advisors. This ensures independence from management or related parties, mitigates undue influence and supports informed, prudent decision- making. 8.5 Conflicts of Interest Conflicts of interest involving directors, managers, shareholders and advisers in The Bahamas are close - ly scrutinised by courts and regulators. The judiciary has intervened where conflicts compromised fiduci - ary duties or harmed minority shareholders, including removing directors, officers or even CEOs in cases of oppressive conduct. Under the Companies Act, failure to disclose a material conflict can render contracts void and breaches involving improper purposes, such as share issuances to manipulate control, violate loy - alty and good faith obligations. Regulatory authorities, including the Securities Commission, monitor con - flicts, requiring timely disclosure to ensure transpar - ency, market integrity and prevent self-dealing.
al and substantive requirements such as publication of notices, deposit periods and disclosure obligations to ensure transparency, equal treatment of shareholders and prevention of market manipulation. A hostile bid made without prior negotiation with management falls under the same regulatory require - ments as other offers. The Rules protect minority shareholders, restrict arrangements that could frus - trate the market and mandate communication with offeree shareholders under prescribed conditions. Amendments in 2020 further address dissenting shareholder rights, independent advisory reports and circumstances under which mandatory offers may be waived, reflecting regulatory discretion in restructuring or fairness considerations. In practice, hostile offers are permitted provided the offeror complies with the Take-over Rules, observes the offer period, furnishes required documentation, respects pre- and post-bid restrictions and secures any necessary waivers. The regime balances an offeror’s right to pursue control with shareholder protections and market integrity. 9.2 Directors’ Use of Defensive Measures The Bahamas permits directors to employ defensive measures to protect the company, provided such measures are consistent with their fiduciary duties, the company’s constitutional documents and applicable law. For public companies, however, the use of defen - sive tactics is circumscribed by the Securities Industry (Take-over) Rules, 2019 (and their 2020 amendments), which emphasise the obligation of directors to advise shareholders on takeover bids, prohibit actions that would frustrate a bona fide offer absent proper com - pliance with the regulatory regime and impose specific procedural and disclosure requirements designed to safeguard fairness and minority shareholder protec - tions. Defensive actions that contravene these rules, or that lack appropriate shareholder authorisation or regulatory approval, would be impermissible or sub - ject to regulatory sanction. Accordingly, Bahamian law does allow defensive measures in principle, but such measures must be carefully aligned with fiduciary duties and strictly conform to the Take-over Rules and their amendments, with particular vigilance toward not frustrating bona fide offers and ensuring fair treatment of all shareholders.
9. Defensive Measures 9.1 Hostile Tender Offers
Under Bahamian law, hostile tender offers are regulat - ed by the Securities Industry Act 2024 and the Secu - rities Industry (Take-over) Rules, 2019, as amended. These provisions establish a structured framework governing take-over bids, including the rights of offer - ors and offerees, the duties of directors and advisers and protections for minority shareholders. The Rules allow both formal and issuer bids and do not categori - cally prohibit hostile offers, but they impose procedur -
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