FRANCE Law and Practice Contributed by: Bertrand Barrier, Anne Toupenay-Schueller and Cyril Deniaud, Jeantet
and private M&A transactions, they are generally more challenging to implement in public M&A deals. 6.5 Common Conditions for a Takeover Offer/ Tender Offer In France, takeover bids for companies listed on the stock exchange must generally be unconditional, but some specific exceptions are outlined in the AMF’s General Regulation: • Minimum acceptance threshold – bidders may require a minimum percentage of shares to be accepted by shareholders (refer to 6.7 Minimum Acceptance Conditions for more information). • Additional conditions – voluntary offers can also be subject to: (a) reaching a voluntary minimum acceptance threshold which in practice cannot be higher than two thirds of the share capital or voting rights; (b) approval from the bidder’s shareholders for is- suing new securities as part of the offer consid- eration; (c) the success of other simultaneous offers by the same bidder; (d) antitrust approvals obtained in the initial review phase – if a detailed investigation follows, the offer will automatically be withdrawn; and (e) regulatory approvals, whether industry-specific (such as for financial institutions) or related to foreign investment regulations (such approval being a condition to the opening of the offer period, see 6.14 Timing of the Takeover Offer ). • Offer withdrawal – the bidder may withdraw the offer if the AMF announces a timeline for a rival or improved bid, or with the AMF’s consent if defensive measures by the target are enacted, for example: (a) the issuance of golden shares; (b) the entry into shareholders’ agreements grant- ing pre-emption rights, tag-along rights, or voting commitments, making hostile takeovers more difficult; (c) the solicitation of counter-offers from more favourable bidders, often leading to a bidding war that maximises value for the shareholders; (d) the restructuring of assets to alter the target’s profile and to reduce its attractiveness to the
hostile bidder; or (e) the completion of capital increases. 6.6 Deal Documentation
Under French law, the works council of a French target must be consulted in the case of a change of control prior to any final decision being taken by the seller and prior to the execution of any binding agreement relating to such transaction. As a result, in transactions involving the information and consultation of the works council of the target company, the parties usually agree to issue an official press release under which they inform the market that a binding offer to purchase the shares of the French issuer has been made by the bidder and that the works council of the French issuer will be consulted in connection with this offer. In practice, such disclosure occurs upon execution of either: (i) a put option grant- ed by the bidder to the seller(s), in the case where the contemplated transaction implies the prior acquisition of a controlling stake through a block trade; or (ii) a tender offer agreement between the target company and the bidder. Where applicable, earlier disclosure may be required if there is a leak or abnormal market activity, in which case a press release must be issued without delay. Such documentation usually contains standard rep- resentations and warranties and undertakings so that the target company will: • consult its works council; • co-operate with the independent expert to be appointed in order to allow it to establish the expert’s report containing the fairness opinion in the framework of the offer; • conduct its business in accordance with the ordi- nary course; • not solicit counter-offers; and • file the relevant offer documentation with the AMF once the draft tender offer is filed by the bidder. The contractual documentation will be made fully available to the AMF and, as the case may be, to the independent expert who will refer to it in its fairness opinion.
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