SWEDEN Law and Practice Contributed by: Niclas Rockborn, Pär Johansson, Daniel Sveen, Arijan Kan and Erik Schwartz, Gernandt & Danielsson Advokatbyrå
7.5 Conditions in Takeovers An offeror is allowed to announce a public offer that is subject to conditions for completion, which is also customary. If a public offer is subject to such condi - tions, the conditions must be worded in such detail that it is possible to determine whether the conditions have been fulfilled. In addition, the conditions must be objective and may not be worded in a way that gives the offeror a decisive influence over their fulfilment. An exception from this principle is that the offeror may make the offer conditional upon receiving the neces - sary regulatory approvals, for example, competition clearance, on terms that are acceptable to the offeror. Customary Conditions for Completion The following conditions are the most commonly used conditions for completion in Swedish takeovers (regardless of whether the offer is a private equity- backed takeover offer or not): • the offer being accepted to such an extent that the offeror becomes the owner of more than 90% of the shares in the target company (this being the threshold for initiating a compulsory buyout proce - dure pursuant to the Swedish Companies Act); • with respect to the offer and the acquisition of the target company, the receipt of all necessary regula - tory, governmental or similar clearances, approvals and decisions (including from competition authori - ties and agencies screening foreign direct invest - ments), in each case on terms that, in the offeror’s opinion, are acceptable; • no other party announcing an offer to acquire shares in the target company on terms that are more favourable to the shareholders of the target company than the terms of the offer; • neither the offer nor the acquisition of the target company being rendered wholly or partially impos - sible or significantly impeded as a result of legisla - tion or other regulation, any decision of a court or public authority, or any similar circumstance; • no circumstances having occurred that have a material adverse effect, or could reasonably be expected to have a material adverse effect, on the target company’s financial position, prospects or operations, including the target company’s sales, results, liquidity, equity ratio, equity or assets;
90%. Certain “acting in concert” rules apply in relation to these disclosure obligations. 7.3 Mandatory Offer Thresholds A party who holds no shares or holds shares rep - resenting less than 30% of the votes in a company whose shares are listed on a regulated market (or certain other marketplaces) in Sweden and who, through acquisition of shares in such company, attains a shareholding representing at least 30% of the votes in the company, will be obliged to announce a man - datory offer. The shareholdings of certain natural or legal persons that are related parties to the shareholder should also be included when calculating the shareholder’s shareholding. Such persons include the shareholder’s group companies and a person with whom an agree - ment has been reached to adopt a long-term common position through the co-ordinated exercise of voting rights in order to achieve a controlling influence over the management of the company or who otherwise co-operates with the shareholder in order to obtain control of the company. The obligation to announce a mandatory offer does not, however, apply if the shareholder’s shareholding reaches or exceeds the 30% threshold following com - pletion of a voluntary public offer for all shares in such company referred to in the above paragraph. 7.4 Consideration Cash consideration is more commonly used as con - sideration in Swedish public offers. In recent years, more than nine-tenths of the public offers that have been announced have involved all-cash considera - tion. Any acquisition of or agreement to acquire shares made by the bidder (or a member of a bid consortium or any closely related person to the bidder or a mem - ber of a bid consortium) during a period commencing six months prior to the launch of the public offer cre - ates a “floor price” for the subsequent public offer. The same applies to any such transactions made during the offer period and during a period ending six months after the closing of the offer.
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