SWEDEN Law and Practice Contributed by: Niclas Rockborn, Pär Johansson, Daniel Sveen, Arijan Kan and Erik Schwartz, Gernandt & Danielsson Advokatbyrå
• no information made public by the target company, or disclosed by the target company to the offeror, being inaccurate, incomplete or misleading, and the target company having made public all infor - mation that should have been made public by the target company; and • the target company not taking any action that is intended to impair the prerequisites for making or completing the offer. Offerors usually reserve the right to withdraw their offer in the event that it is clear that any of the above conditions for completion is not satisfied or cannot be satisfied. However, with the exception of the 90%+ shareholding condition mentioned in the first bullet above, the offer may only be withdrawn where the non-satisfaction of the condition is of material impor - tance to the offeror’s acquisition of the target com - pany or if otherwise approved by the Swedish Secu - rities Council. Offerors may also (and usually do so) reserve the right to waive, in whole or in part, one or several of the conditions for completion referred to above, including, with respect to the 90%+ sharehold - ing condition, to complete the offer at a lower level of acceptance. Financing Before announcing an offer, the offeror must ensure that it has sufficient financial resources to complete its offer. This means that debt financing (if any) must have been secured on a “certain funds” basis. If the offeror has to raise equity capital in order to finance its offer, the offeror must have obtained subscription and/or underwriting commitments to ensure that the required equity capital can be raised. If conditions for the payment of a required acquisition credit are not included as conditions for completion of the offer (it should be noted that the scope for including such financing conditions is limited), these must be condi - tions that the offeror can ensure are met in practice. Deal Security Measures In general, a target company is prohibited from tak - ing deal protection measures that oblige the target company in relation to the offeror, including, among other things, so-called no-shop clauses that restrict the target company from holding discussions with or seeking competing offerors. Accordingly, in addition
to stakebuilding, the primary deal certainty measures that an offeror may take are to obtain irrevocable commitments from principal shareholders of the tar - get company and secure a recommendation from the target board. 7.6 Acquiring Less Than 100% The Swedish Companies Act permits compulsory buyout of minority shareholdings by a shareholder who, either alone or together with its subsidiaries, owns more than 90% of the shares of a Swedish lim - ited liability company. A compulsory buyout procedure following a public offer normally goes on for one to two years. However, if the majority shareholder (this being the offeror) so requests, and provides sufficient collateral, the major - ity shareholder may be granted advance vesting of title to the remaining shares in a separate award or judgment prior to the final determination of the pur - chase price for the shares. If the majority shareholder requests advance vesting of title and provides suf - ficient collateral, it usually takes about four to six months before the advanced vesting of title is granted, after which the majority shareholder can start treating the target company as a wholly owned subsidiary. If the offeror does not obtain enough acceptances in a public offer to reach an ownership of more than 90% of the shares in the target company, it will be difficult for the offeror to achieve a delisting of the target company, meaning that the target company will still be subject to the listing requirements of the stock exchange (or other marketplace) on which its shares are listed. In addition, the remaining shareholders will be entitled to certain minority shareholders’ rights preventing the offeror from obtaining full control over the target company, and without 100% ownership, a private equity-backed bidder will in practice not be able to achieve a debt push-down. A shareholder (or group of shareholders) holding at least 10% of the shares in a Swedish limited liabil - ity company may request that an extraordinary gen - eral meeting of such company is held. Accordingly, the offeror can request that an extraordinary general meeting of the target company be convened and then elect a new board of directors of the target company
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