MONACO Law and Practice Contributed by: Stephan Pastor, Emeline Elbaz-Mondeux and Coralie Trudon, CMS Pasquier Ciulla Marquet Pastor & Svara
7. Disclosure 7.1 Making a Bid Public
6.5 Minimum Acceptance Conditions Any person or entity wishing to take control of a Monaco private company must own more than 50% of the voting rights, it being specified that this thresh - old only provides the majority during the shareholders’ ordinary general assembly, ie, over the matters relat - ing mainly to the approval of the annual accounts as well as the appointment/replacement of members of the board of directors. A wider control, including the power of decision-mak - ing over key issues – eg, approving an M&A deal or the sale of assets, increasing the share capital, amending the by-laws or transferring the company’s headquar - ters – usually requires the acquirer to take over at least 75% of the voting rights (depending on the provisions of the by-laws of the target). This enables the acquir - er to take decisions pertaining to the shareholders’ extraordinary general assembly. 6.6 Requirement to Obtain Financing A share/asset purchase agreement in Monaco may be conditional upon obtaining financing, according to the agreements between the parties. 6.7 Types of Deal Security Measures The most commonly used deal security measures in Monaco are non-solicitation, non-compete and con - fidentiality clauses. 6.8 Additional Governance Rights A bidder that does not seek 100% ownership of a target entity may seek representation in the board or the management of the target company. 6.9 Voting by Proxy Shareholders can vote by proxy in Monaco in accord - ance with the stipulations of the company by-laws. 6.10 Squeeze-Out Mechanisms Squeeze-out mechanisms and short-form mergers, etc, do not exist under Monaco law. 6.11 Irrevocable Commitments Irrevocable commitments do not apply in Monaco.
Monaco-based companies are all private, so bids generally remain confidential unless voluntarily dis - closed to the press or to a third party for specific purposes usually detailed in the confidentiality agree - ment/clause. 7.2 Type of Disclosure Required The requirement of disclosure in relation to the issu - ance of shares in a business combination does not apply in Monaco. 7.3 Producing Financial Statements Although there is no obligation for bidders to produce a document for making a bid public, it is worth not - ing that the financial statements exchanged between parties to a transaction as part of the prior negotiation process need to be prepared in accordance with the International Financial Reporting Standards. These financial statements are either prepared or supervised by a Monaco chartered accountant. 7.4 Transaction Documents Full disclosure of transaction documents does not apply in Monaco. Directors of a target company have a permanent duty to act in accordance with the corporate interests of the company, which implies that they must ensure that the interests of the company are being protected as part of the contemplated deal, along with those of the shareholders and all other stakeholders (mainly employees and creditors). Consequently, directors are supposed to keep in mind that the price offered by the bidder is not the only criterion to take into account when analysing the content of a bid; the bidder’s long- term strategic intentions towards the target company and its stakeholders are also a key element. 8. Duties of Directors 8.1 Principal Directors’ Duties
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