IRELAND Law and Practice Contributed by: Enda Garvey, Brian McCloskey and Robert Maloney Derham, Matheson LLP
an amount as will increase by more than 0.05% the aggregate percentage of the voting rights in that company conferred by the securities held by them. If a transaction falls within the above-mentioned cri - teria, except with the consent of the Irish Takeover Panel, an offer made must – in respect of each class of shares – be in cash (inclusive of cash alternatives) at a price per share that shall not be less than the highest value of the consideration per share paid by the offeror of that class during the 12 months immediately prior to the announcement of the offer. 7.4 Consideration Please see 6.1 Types of Consideration Mechanism . With regard to any minimum price rules applicable to tender offers, a bidder may be required to make a cash or cash alternative offer matching the high - est price that it previously paid for target shares in a number of circumstances. If the bidder (or any person acting in concert with it) has, in the 12 months prior to the commencement of the offer period, purchased securities of the target carrying in aggregate 10% or more in nominal value of any class of share that is the subject of the offer, then any offer for that class of share must be in cash or accompanied by a cash alternative at no less than the highest price paid by the bidder or concert party for that share in the relevant period. The Irish Takeover Panel has the discretion to remove the 10% threshold and apply the rule to any acquisition, irrespective of the percentage acquired. Except with the consent of the Irish Takeover Panel, a bidder may not make any arrangement with any shareholder or intending shareholder of the target where such arrangement includes a term favourable to such shareholder or intending shareholder which is not extended to all shareholders of the target. In practice, this can limit the ability of a private equity buyer to roll over some (but not all) of a target’s share - holders. 7.5 Conditions in Takeovers Unless the Irish Takeover Panel otherwise consents, a bidder is not typically permitted to include any:
• preconditions to announcing an offer (other than receipt of irrevocable undertakings); • conditions to completion of an offer, which depend solely on the subjective judgements of the bidder or the target or are within their control (conditions relating to required targets’ shareholder accept - ance levels and regulatory conditions are permit - ted); or • conditions relating to financing. In addition, neither bidder nor target are permitted to invoke any condition (other than the acceptance con - dition and certain required competition law clearanc - es) without the Irish Takeover Panel’s consent. Such consent will only be given where the circumstances that give rise to the right to invoke the condition are of material significance to the bidder or the target, as the case may be, in the context of the offer and the Irish Takeover Panel is satisfied in the prevailing circum - stances that it would be reasonable for the condition to be invoked. Practically speaking, although certain “material adverse change”-type conditions may be included in offers, the circumstances in which the Irish Takeover Panel will consent to the invocation of such condition will be very limited. Where the offer is for cash or includes an element of cash, the formal offer announcement must include confirmation by the offeror’s financial adviser that resources are and will be available to satisfy full acceptance of the offer. In Irish public takeovers, private equity funds will typi - cally issue hard-equity commitment letters, which commit the fund to invest in the bid vehicle in order to pay the offer price. Very limited conditionality is permissible in debt facilities. 7.6 Acquiring Less Than 100% There are a variety of governance structures used, ranging from ordinary equity investments with certain limited control rights to preferred equity or debt-like structures with limited governance rights but with the ability to participate in equity returns. Although not a major feature of the Irish market in recent years, mez - zanine debt and convertibles have also become more
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