NIGERIA Law and Practice Contributed by: Chinyerugo Ugoji, Tiwalola Osazuwa, Onyinyechi Chima and Edidiong Antai, ǼLEX
tion to the other and could also depend on whether the transaction is structured as a share or asset deal. In conducting due diligence exercises, parties need to consider regulatory restrictions that impact the dis - closure of certain types of information, eg, price-sen - sitive information, especially in transactions involving competitors. In Nigeria, the FCCPC expects parties to take measures that restrict the flow of competition- sensitive information to competitors even during a due diligence exercise. Such measures include the use of a clean team and data anonymisation. 5.4 Standstills or Exclusivity Standstill agreements are not common in Nigeria. It is more common for a potential acquirer to request exclusivity, which will typically be negotiated by the parties. On the other hand, the target will be looking to limit the exclusivity period to ensure that negotiations are concluded quickly. However, a target is likely to be more reluctant to grant exclusivity in an auction sale. In the context of notifiable mergers, a statutory stand - still obligation applies under Sections 95 (5) and 96 (4) of the FCCPA. Merging parties must not take any steps to advance or implement the transaction prior to obtaining approval from the FCCPC, whether before or after notification. 5.5 Definitive Agreements It is permissible under Nigerian law for the terms and conditions of a tender offer to be negotiated and doc - umented in a definitive agreement. 6. Structuring 6.1 Length of Process for Acquisition/Sale The timeline for completing an acquisition will gener - ally depend on the transaction structure and process adopted by the relevant parties. In practice, and par - ticularly in transactions involving private companies, the parties will typically agree the transaction timeta - ble. Some of the factors that could impact the timeline for a transaction include internal approvals, regula - tory filings and approvals, financing arrangements, the preparedness of the seller for due diligence and the complexity of the transaction. For instance, com -
petition filing with the FCCPC could take up to 120 business days, except for transactions where material competition concerns do not arise, which the FCCPC aims to review and approve within 45 business days. For transactions involving publicly listed companies, the acquirer will have to factor the statutory and regu - latory steps and timelines to execute the transaction into its timetable. For mandatory takeovers, the ISA 2007 and the SEC Rules prescribe specific timelines within which each required step must be completed. Some of these timelines are outlined below: • An application for authority to proceed with a bid must be filed with SEC within three business days of the triggering event. • SEC will grant authority to proceed, which is valid for three months, subject to further renewal for a maximum period of one month. • The bid will be registered with SEC and subse - quently despatched to each director and share - holder of the target company, and SEC. • Dissenting shareholders are to be notified within one month of the other shareholders’ acceptance of the bid, allowing them to either elect to be paid in the same proportion as consenting shareholders or to have their shares valued. • Within 20 days of notifying the dissenting shareholder(s) of the election, the acquirer will pay the target company the consideration that will be paid to the dissenting shareholders should they make an election. • The dissenting shareholder(s) can either elect to be paid in the same proportion as the consenting shareholders or elect to have their shares val - ued. Otherwise, if within 20 days, the dissenting shareholders do not make an election, they will be deemed to have accepted to be paid the same as the consenting shareholders. • If the dissenting shareholder(s) elect to have their shares valued, the acquirer will apply to court to determine a fair value for the dissenting sharehold - ers’ shares. If the acquirer fails to apply to the court within 20 days after paying the consideration for the dissenting shareholders’ shares to the target company, the dissenting shareholder(s) may apply
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