IRELAND Law and Practice Contributed by: Enda Garvey, Brian McCloskey and Robert Maloney Derham, Matheson LLP
is the regulatory body that is tasked with oversee - ing the application of the Takeover Rules to relevant transactions. The Takeover Rules impose a rigor - ous framework on such transactions and mandate engagement by private equity investors with the Irish Takeover Panel. While the application of the Takeover Rules means that such transactions are generally subject to a more restrictive framework than a typical private company transaction, there are three particular features of the Takeover Rules of note: • A transaction must be independently cash-con - firmed before a bidder can announce a firm inten - tion to make an offer. For a private equity investor, this means that – at the time of announcement – its funding will need to be unconditionally available to the bidder (including possibly being placed in escrow). • Once a firm intention to make an offer is announced, a bidder will generally be bound to proceed with the offer. Furthermore, save for the acceptance condition or any competition/anti - trust condition, a bidder will have limited scope to invoke any other condition to lapse or withdraw an offer once the offer is made. • Special arrangements with any category of target shareholder, including management incentivisa - tion proposals, will generally require consent to be granted by the Irish Takeover Panel. Such consent may be given subject to independent shareholder approval at a general meeting. This necessitates the early formulation of such arrangements or proposals and engagement with the Irish Takeover Panel. The most common acquisition structure in the con - text of a recommended transaction is the scheme of arrangement, which is a court-led and approved stat - utory procedure. A scheme of arrangement requires the approval of target shareholders holding at least 75% in value of shares voted in person or by proxy at a scheme meeting (or each class meeting). Where a target is not listed on a European regulated market, the scheme must also be approved by a simple major - ity of shareholders present and voting at the relevant scheme meeting (for these purposes a “shareholder”
is a person whose name appears on the register of members of the target at the relevant record date). A scheme of arrangement must also be approved by the High Court of Ireland. In Irish recommended public takeovers, a transaction agreement usually provides for certain deal protection mechanisms, including match rights, force-the-vote provisions and non-solicitation provisions. Break fees of up to 1% covering transaction costs (relating to quantifiable third-party costs) are permitted with Irish Takeover Panel consent. Reverse termination fees (ie, providing for payment by the bidder to the target) are also permissible under Irish law, without an upper limit. 7.2 Material Shareholding Thresholds and The Substantial Acquisition Rules (SARs) apply to a person acquiring shares and impose restrictions on the timeline within which a person may increase their shareholding in the target. The SARs prohibit the acquisition by any person (or person acting in concert with that person) of shares or rights in shares carrying 10% or more of the voting rights in an issuer within a period of seven calendar days if that acquisition would take that person’s hold - ing of voting rights to 15% or more but less than 30% of the voting rights in the issuer. Disclosure in Tender Offers Substantial Acquisition Rules A person who makes a substantial acquisition must disclose that fact to the target and the Irish Takeover Panel no later than midday on the business day fol- lowing the date of such acquisition. Irish Takeover Rules Dealings in the securities of a target company that is in an offer period under the Takeover Rules (and, in certain circumstances, dealings in the securities of a bidder) may trigger a disclosure requirement. An opening position disclosure is required to be made by an offeror and target, as well as by any person who is interested in 1% or more of any class of relevant securities of target, within ten business days of the commencement of the offer period or the announce - ment that first identifies the bidder (as appropriate).
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