NORWAY Law and Practice Contributed by: Fredrik Lykke, Christian P. N. Fenner and Magnus Brox, Advokatfirma DLA Piper AS Norway
10.2 Stage of Deal As covered in 10.1 Frequency of Litigation , litigation
The board would also need to consider the alternative in case a bidder withdraws because of the defensive measures, and be able to defend its decision to imple - ment defensive measures for its shareholders. 9.5 Directors’ Ability to “Just Say No” The board has the right to try to prevent a business combination occurring. In doing so, it has a fiduci - ary duty to provide reasonable grounds to support its decision. The board cannot hinder an offeror making a public offer on the company’s shares. Also, in private com - panies an offeror can make an offer directly to the shareholders, circumventing the board of directors. 10. Litigation 10.1 Frequency of Litigation Litigation is fairly uncommon with respect to M&A deals in the Norwegian market. When there is litigation (or arbitration) it typically relates to damages claims for breach of sellers’ war - ranties in share purchase agreements. In public-to- private transactions, this is seldom relevant, as it is not market practice for the sellers to give any representa - tions or warranties. In somewhat complex tender offers and squeeze-out situations, litigation may be required to determine the mandatory tender offer price and/or squeeze-out price. Recently, there have also been some disputes (and some arbitration matters) concerning breach of exclu - sivity provisions. Typically, a buyer/investor is arguing that a seller/issuer has breached an exclusivity provi - sion with the bidder/investor when the seller/issuer decides to sell to another bidder or let another inves - tor subscribe for a material part of the target company. Although claimants have succeeded with such claims, the damages award typically is limited to cost cover for the process and not the loss of missed opportunity.
is typically brought post-completion. 10.3 “Broken-Deal” Disputes
In general, there has not been publicity around con - flicts due to “broken deal” issues on the basis of COVID-19 or the war in Ukraine. It may be that there are ongoing disputes (typically confidential arbitration matters) concerning “walk-aways”, but our impression is that there are not many of those in the Norwegian market. Reference is, however, made to the recent court case summarised in 3.1 Significant Court Decisions or Legal Developments concerning the interpretation of a condition precedent in a public-to-private trans - action. Shareholder activism is still not very common in the Norwegian market. However, for some years there has been a focus on senior management remuneration issues as well as supply chain issues and environ - mental issues. These issues are typically fronted by certain major asset/pension fund managers. There are also various examples of investors acquir - ing meaningful minority stakes and thereafter provid - ing strategic market assessments to the board and/or senior management, who then take these into consid - eration. Such investors sometimes receive an invita - tion to become directors, and as such participate in the further direction of the company. 11.2 Aims of Activists Activist investors often have significant views on improvement and restructuring possibilities, and this includes M&A transactions, spin-offs or major dives - titures. Occasionally they encourage and succeed in implementing reverse takeovers into listed companies. 11.3 Interference With Completion 11. Activism 11.1 Shareholder Activism In the Norwegian market, it is not typical to see activists trying to interfere with the completion of
979 CHAMBERS.COM
Powered by FlippingBook