NETHERLANDS Law and Practice Contributed by: Maarten de Boorder, Rutger Sterk, Bas Vletter and Samuel Garcia Nelen, Greenberg Traurig, LLP
7.2 Material Shareholding Thresholds and Disclosure in Tender Offers The AFM must be notified without delay by anyone who acquires or disposes of shares or voting rights that cause the percentage of capital or votes to reach, exceed or fall below certain thresholds of listed com - panies. Such notification obligation also applies for the acquisition or disposal of financial instruments that represent a short position with respect to shares of a listed company. The relevant thresholds that trig - ger an obligation to notify are 3%, 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%, 75% and 95%. The 30% threshold is particularly relevant for PE- backed bidders contemplating a tender offer, as this threshold also triggers a mandatory offer on all out - standing shares of the listed companies (see 7.3 Man- datory Offer Thresholds ). 7.3 Mandatory Offer Thresholds A takeover bid is legally required in the Netherlands once a person or entity – alone or in concert with oth - ers – acquires control over a listed company, which is defined as being able to exercise at least 30% of the voting rights in the general meeting of a Dutch com - pany on a regulated market. A mandatory offer must be made at a fair price. This means that the minimum price of a mandatory offer must be the highest price paid by the bidder in the year preceding the announce - ment of the mandatory offer. Any non-compliance with the mandatory offer rules can be sanctioned by the Dutch Enterprise Chamber, which may, at the request of the company and others, impose a mandatory offer. 7.4 Consideration Bidders can offer cash or shares, or a combination of both, in a public offer. Pursuant to the best-price rule, the bidder must pay the higher of (i) the offer price and (ii) the highest price paid by the bidder to acquire shares on the market, unless the transaction was a regular trade on a regulated market. 7.5 Conditions in Takeovers A public offer is usually subject to “commencement conditions”, being the conditions that must be sat - isfied (or waived) for the bidder to launch the offer, and “offer conditions”, being the conditions that must
be satisfied (or waived) in order to declare the offer unconditional. Common commencement conditions include: • no breach of the (material provisions of the) merger protocol; • absence of an MAC; • no change in the board’s recommendation; • compliance with employee consultation proce - dures; • no legal prohibition of the public offer; and/or • no suspension of trading of the target company’s shares. Similar conditions typically apply as offer conditions. In addition, the following conditions generally apply: • a condition that all regulatory approvals have been obtained; and • a condition that a certain minimum acceptance threshold has been met. Finally, the adoption of certain general meeting resolu - tions (eg, dismissal or appointment of directors) that will become effective upon settlement of the offer is generally included as an offer condition. A public offer cannot be conditional on the bidder obtaining financing. The bidder must announce that it has ultimate certainty of funds when filing the draft offer memorandum for approval with the AFM. Addi - tionally, a bidder cannot include conditions that are under the control of the bidder. In contrast to a voluntary public offer, the completion of a mandatory offer may not be made subject to any conditions. 7.6 Acquiring Less Than 100% If a PE-backed bidder does not obtain 100% owner - ship of a target but does acquire at least 95% of the shares, it can make use of a squeeze-out mechanism under Dutch law. A shareholder that has at least 95% of the shares may request the Enterprise Chamber, within three months after the acceptance period of the offer has lapsed, to force the minority shareholders to sell their shares. The bidder and target may agree that
433 CHAMBERS.COM
Powered by FlippingBook