MEXICO Law and Practice Contributed by: Carlo Cannizzo, Marco Cannizzo, Stefano Amato, Enrique García and Paloma Iglesias, Cannizzo
7. Disclosure 7.1 Making a Bid Public
power of attorney granted before two witnesses. No notarisation or legalisation is usually required. Usu - ally, the representation or the form of representation is regulated by the provisions of the by-laws of the company. In the case of public companies, shareholders may be represented by persons who can prove their faculties of representation by means of proxy forms drafted by the company and made available to them through stock market intermediaries or the company itself, at least 15 calendar days prior to the date of the meeting. In addition, in order to participate in the relevant meet - ings, the share certificates must be deposited with the central securities depository, S.D. Indeval, Institución para el Depósito de Valores , which will issue a certifi - cate of deposit evidencing said situation. 6.10 Squeeze-Out Mechanisms Some squeeze-out mechanisms used in Mexico are strategies to modify the capital stock of companies or agreements related to the purchase of shares that companies may foresee in their articles of incorpo - ration and by-laws or even in agreements between shareholders. The LGSM provides that the by-laws may include grounds for exclusion of partners or grounds to exercise separation rights, withdrawal rights or rights to redeem shares, as well as the price It is possible but not common to obtain both irrevoca - ble and revocable offers or voting commitments from major shareholders of the target company. Negotia - tions with shareholders can be conducted at any stage of the deal. For the fulfilment of this type of commit - ment, it would be possible to grant irrevocable powers of attorney of the obligor, allowing the attorney-in-fact to exercise voting rights. This type of commitment and the granting of such irrevocable powers of attorney allowing the voting of shares are particularly common in M&A transactions involving financing and the grant - ing of collateral. or the basis for its determination. 6.11 Irrevocable Commitments
A distinction must be made between private and public transactions, since in the first case there is no regulation that obliges the parties to disclose a trans - action publicly; the parties involved are free to decide whether to make the transaction public and, if so, at what time. Usually, a press release is made for signifi - cant transactions once they have been authorised by all the corresponding regulatory authorities. In the case of public companies, the parties have an obligation to disclose any relevant event that may affect the value of their shares, so the confidentiality of the negotiations must be handled carefully until a takeover bid is carried out. The relevant information related to the request for authorisation of the tender offer must be disclosed to the public on the day of the commencement of the tender offer. In the event of relevant changes with respect to the information disclosed, the same must be substituted. 7.2 Type of Disclosure Required For the issuance of shares of a private company, it is not necessary to make any kind of prior disclosure for a business combination to take place. If the combina - tion is carried out through a merger, the merger agree - ments must be published in the RPC and in the elec - tronic system established by the Ministry of Economy, along with the last balance sheet of each company involved and the system set forth for the extinction of the liabilities of the company or companies that will cease to exist. In the case of issuers of securities registered in the RNV, they are required to submit to the CNBV and the stock exchange on which their securities are listed the relevant information for immediate dissemination to the general public, through various reports, including reports on corporate restructurings such as mergers, spin-offs, acquisitions or sales of assets. Finally, according to the Issuers’ Provisions, spe - cifically those regarding the instructions for drafting prospectuses, these must contain the purposes and plans of the offeror after the public offering – ie, once it has been approved.
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