NETHERLANDS Law and Practice Contributed by: Maarten de Boorder, Samuel Garcia Nelen, Jelmer Kalisvaart and Bas Vletter, Greenberg Traurig, LLP
the negotiations, the due diligence process, mandato - ry regulatory clearances and other closing conditions. Public M&A Transactions In a public M&A transaction, the offer rules require that a public announcement will be made on the inten - tion to make an offer if the bidder and the target have reached (conditional) agreement on the public offer. Following the initial announcement of the offer, it typi - cally takes at least two to three months to have the offer memorandum approved by the AFM and to for - mally launch the offer. The offer period must be eight to ten weeks and is subject to an optional extension period of two to ten weeks. Any further extensions, which may be required for regulatory purposes, are subject to AFM approval. After closing of the offer period, the bidder typically announces a post-offer tender period of up to two weeks. If the bidder, following settlement of the offer, holds at least 95% of the target’s issued share capital, it may institute a statutory squeeze-out procedure at the Enterprise Chamber. A statutory squeeze-out typically takes anywhere between three months and one year, depending on shareholder opposition. If a bidder has acquired less than 95% of the target’s issued share capital, various alternative squeeze-out measures may be available to the bidder, if so agreed in the merger protocol (see 6.10 Squeeze-Out Mechanisms ). The timing of such alternative squeeze-out measures dif - fers on a case-by-case basis, but they can typically be executed within a couple of days to a couple of weeks A bidder will be obliged to make a mandatory offer if they are able to exercise, directly or indirectly, at least 30% of the voting rights in the general meeting of a Dutch company listed on a regulated market (alone or together with others with whom the bidder is acting in concert). “Acting in concert” is defined as persons co-operating under an (oral or written) agreement with the aim of acquiring control in the target company. Unfortunately, guidance on when persons are acting in concert is limited. Contrary to other EU jurisdic - tions where similar mandatory offer rules apply, there is no possibility to obtain guidance from any regula - following closing of the public offer. 6.2 Mandatory Offer Threshold
tory authority, since in the Netherlands a Dutch court will ensure compliance with the mandatory offer rules and not the AFM. A mandatory offer should be made at a fair price which will, in principle, be equal to the highest price paid by the bidder for shares in the target in the one- year period preceding the announcement of the man - datory offer. 6.3 Consideration In the vast majority of Dutch public offers, cash is solely used as consideration. However, it is also pos - sible to offer securities or a combination of cash and securities. In the context of private M&A transactions, the most common tool used to bridge value gaps is an earn-out mechanism. We do not see these types of structures in the context of public M&A. 6.4 Common Conditions for a Takeover Offer A public offer is usually subject to “commencement conditions”, being conditions that must be satisfied (or waived) for the bidder to launch the offer, and “offer conditions”, being conditions that must be satisfied (or waived) in order to declare the offer unconditional. Common commencement conditions include: • no breach of the (material provisions of the) merger protocol; • absence of a material adverse change; • no change in the board’s recommendation; • compliance with employee consultation proce - dures; • no legal prohibition of the public offer; and/or • no suspension of trading of the target company’s shares. Similar conditions typically apply as offer conditions. In addition, the following conditions generally apply: • a condition that all regulatory approvals have been obtained; and • a condition that a certain minimum acceptance threshold has been met (see 6.5 Minimum Accept- ance Conditions ).
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