NORWAY Law and Practice Contributed by: Fredrik Lykke, Christian P. N. Fenner and Magnus Brox, Advokatfirma DLA Piper AS Norway
6.4 Common Conditions for a Takeover Offer Pursuant to the Securities Trading Act, a mandatory tender offer may not include any conditions. A takeo - ver process is therefore almost always structured by way of the bidder first issuing a voluntary tender offer, in which a bidder is free to set conditions. Common conditions are: • that the bidder received acceptances bringing the bidder up to more than 90% ownership upon com - pletion (sometimes seen as an ownership condition of more than 50% or more than two-thirds); • that required regulatory approvals are obtained; and • that there is no material adverse effect. 6.5 Minimum Acceptance Conditions The most common minimum acceptance condition is more than 90%. There are several reasons for this. Firstly, it is the threshold for the bidder to be able to conduct a squeeze-out, and thereby become a 100% owner, which also results in a swift process to de-list the issuer from the stock exchange. Secondly, owning more than 90% also allows for tax consolidation. The main relevant control threshold in Norway is more than 50%, which entitles a shareholder to appoint the board of directors, decide on dividends, consolidate the accounts of the target company and in general instruct the board in relation to the operations of the company. In practice, however, such control in a listed company typically kicks in at lower ownership levels due to the fact that a significant number of sharehold - ers do not attend or vote at general meetings. The next control threshold is two-thirds ownership, as an owner can then pass various material corpo - rate resolutions, such as changes to the company’s capital, and mergers and changes to the articles of association. 6.6 Requirement to Obtain Financing A voluntary tender offer can contain a financing condi - tion, but such a provision will clearly make the offer less attractive, and it will be more difficult to obtain irrevocable undertakings from the major shareholders
ment drafts are attached to the transaction agree - ment. The issuer wants to protect itself against the bid turning out to be less attractive than anticipated. However, the bidder wishes to ensure that the issuer’s board recommends that its shareholders accept the offer. 6. Structuring 6.1 Length of Process for Acquisition/Sale The process for acquiring/selling a business in Norway typically takes two to four months from “launch” to possible buyers until the signing of the share purchase agreement. However, the process varies significantly, and many business sales take much longer. The last couple of years have seen an increase in time span for various reasons, such as requirements for more in- depth due diligence and increased tensions concern - ing agreement on commercial terms. Given the quick rise in interest rates globally as well as more general uncertainty in the marketplace, we see more discus - sions between parties on pricing than earlier years. This also results in prolonged transaction processes. 6.2 Mandatory Offer Threshold The mandatory offer threshold in Norway is ownership of more than one-third of shares or votes in an issuer listed on a regulated market with Norway as home state. The mandatory offer obligation is repeated if thresholds of 40% and 50% are passed later as a result of subsequent acquisition of shares. 6.3 Consideration In public-to-private transactions, cash consideration is preferred for several reasons both by the selling shareholders and, to some extent, by the bidder. Using shares as consideration creates a number of complexities concerning valuation of consideration shares as well as tactical considerations, mainly as the following mandatory tender offer must be an all-cash offer. It also involves significantly more burdensome documentation as there will typically be prospectus (or similar document) requirements also on the bid - der’s consideration shares.
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