DENMARK Law and Practice Contributed by: Dan Moalem, Jakob Skafte-Pedersen, Poul Guo and Thomas Enevoldsen, Moalem Weitemeyer
6.11 Commonly Litigated Provisions Litigation is Rare but Focused When It Occurs Litigation in connection with private equity transac - tions in Denmark is relatively rare. Most disputes are resolved through negotiation or alternative dispute resolution mechanisms, such as expert determination or arbitration, particularly in cross-border or sponsor- to-sponsor deals. The prevalence of W&I insurance also contributes to a lower incidence of post-closing litigation. Typical Areas of Dispute When disputes do arise, they typically relate to: • earn-out provisions and post-closing performance metrics; • purchase price adjustments under completion accounts; • claims for breach of warranties, including financial statements or compliance matters (with/without fraud allegations); • interpretation of disclosure limitations or alleged non-disclosure; and • specific indemnities, especially in tax or regulatory matters. Public-to-private transactions involving private equity- backed bidders are relatively rare in Denmark, primar - ily due to the limited number of listed companies and the relatively small size of the Danish capital market compared to other jurisdictions. That said, such trans - actions do occur from time to time and are subject to the rules set out in the Danish Capital Markets Act and the Danish Executive Order on Takeover Bids, rules for issuers on Nasdaq Copenhagen (with respect to matters such as delisting) as well as guidance issued by the Danish Financial Supervisory Authority ( Finan- stilsynet ). Role of the Target Company and Its Board In the context of a public-to-private, the target compa - ny’s board plays an important advisory role. Although the bidder is not legally required to seek board 7. Takeovers 7.1 Public-to-Private Public-to-Private Transactions
approval, it is customary for the board to issue a rea - soned opinion on the offer, including an assessment of the offer price and strategic rationale. The board is expected to act independently and in the interest of all shareholders, and it may engage external financial and legal advisers to support its assessment. Where management is expected to participate in the bid - der group post-closing, particular attention is given to managing conflicts of interest and ensuring proper governance during the offer period. The board is not under any obligation to organise an auction and may on the contrary undertake exclusivity obligations (sub - ject to fiduciary out). Relationship or Transaction Agreements A “bid conduct agreement” between the bidder and the target will often be entered into as part of nego - tiating a transaction. In addition, the bidder will often seek to obtain irrevocable undertakings from major shareholders, if relevant. 7.2 Material Shareholding Thresholds and Disclosure in Tender Offers Statutory Disclosure Obligations Upon Threshold Crossings In Denmark, any shareholder acquiring or disposing of shares in a listed company must notify both the com - pany and the Danish Financial Supervisory Authority ( Finanstilsynet ) when its voting rights or share capital crosses any of the following thresholds: 5%, 10%, 15%, 20%, 25%, one-third, 50%, two-thirds or 90%. These rules apply to all shareholders, including private equity funds, and ensure market transparency in listed companies. Attribution and Aggregation for Private Equity Investors Private equity bidders must carefully assess whether holdings by affiliated entities, parallel funds, or co- investors are subject to aggregation under the Dan - ish rules. Attribution may also apply to instruments or rights convertible into shares. Misinterpretation of these rules may lead to delayed or deficient notifica - tions, resulting in reputational and regulatory conse - quences.
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