JERSEY Law and Practice Contributed by: Paul Burton and David Allen, Maples Group
Takeover Code The Takeover Code applies to certain transactions involving Jersey companies. Takeover Code compli - ance is implemented by the UK Takeover Panel, as the designated authority under primary Jersey legislation. A Jersey company is subject to the Takeover Code if any of its securities are listed on a regulated market or multilateral trading facility in the UK, or on any stock exchange in the Channel Islands or the Isle of Man. This includes being listed on the main board of the LSE and the Alternative Investment Market. A Jersey company that has shares listed on other exchanges, such as the NYSE and Nasdaq, may also be subject to the Takeover Code if the Panel considers that the company’s management and control are in the UK, the Channel Islands or the Isle of Man. Domestic competition and antitrust regulation applies where merging businesses meet relevant thresholds. Where applicable, the approval of the Jersey Compe - tition Regulatory Authority may be required. EU Foreign Subsidies Regulation (FSR) The EU FSR does not directly apply in Jersey and so is not relevant to local M&A transactions therein. How - ever, Jersey financial services businesses that form part of wider UK and European or global groups may be tangentially impacted. One general observation regarding the EU FSR is that, in addition to the usual M&A considerations (such as the completion timetable, closing conditions and risk allocation in deal documents), the EU FSR regime is likely to introduce additional and potentially significant disclosure requirements for private equity sponsors.
offer, bidders may also present separate requests in respect of matters on which they require further infor - mation. Such legal due diligence is usually secondary to financial (including taxation) due diligence. With a hostile bid, legal due diligence is generally limited to information in the public domain. However, a bidder may be able to obtain information from the target that has been provided to a competing bidder if the Takeover Code applies. This is because the target has a duty to provide equal information to rival bidders in a competitive situation. Public information available to bidders in Jersey includes: • audited accounts (for public companies only); • memorandum and articles of association; • details of directors and shareholders; • prospectuses; and • other information that may be available via UK sources, such as public announcements issued by the target. 4.2 Vendor Due Diligence Vendor due diligence (VDD), as part of private equity transactions, depends almost entirely upon the shape of the target group structure and the target asset or business. VDD is often not comprehensive, and, in Jersey, it is not generally considered a substitute for a buyer’s own due diligence. A VDD report may provide a helpful start to the due diligence process. An obvious advan - tage is where a vendor is prepared to make repre - sentations and warranties, or provide indemnities, in the transaction documents in relation to information contained in the VDD report. Typically, sell-side legal advisers present VDD reports as being based on a risk review mandated by the seller/target group, in con - trast to a deeper-dive diligence exercise. It is not common for advisers to permit reliance on buy-side diligence reports in Jersey to financiers or warranty and indemnity (W&I) insurers. However, it is typical for buy-side advisers to liaise with both financi - ers and insurers on behalf of bidders, to address and provide comfort around specific legal issues that may
4. Due Diligence 4.1 General Information
The focus of due diligence in Jersey is on verifying corporate existence, maintaining solvency and oth - er corporate governance-related matters. Typically, buy-side legal due diligence involves utilising pub - licly available information and any information made available by the seller as part of the tender/auction process. Where a target is prepared to support the
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