FRANCE Law and Practice Contributed by: Bertrand Barrier, Anne Toupenay-Schueller and Cyril Deniaud, Jeantet
6.7 Minimum Acceptance Conditions Under French law, any takeover bid, whether voluntary or mandatory, will automatically lapse if the bidder does not achieve ownership of more than 50% of the target’s share capital or voting rights. However, the AMF can allow this threshold to be lowered or waived if reaching it is impractical due to factors unrelated to the offer’s terms, such as existing control by another shareholder or counter-offers. The 50% threshold aligns with the majority needed for decisions at ordinary general meetings, which handle key matters such as appointing directors and approv- ing financial statements. This ensures that the bid- der pays an appropriate control premium, as de facto control requires more than mere minority influence. For voluntary offers, bidders can set higher thresh- olds, such as two thirds of voting rights, which grants control over extraordinary general meetings and ena- bles actions such as amending the articles of asso- ciation or approving mergers. Conversely, setting a threshold at 90%, necessary for a squeeze-out and tax consolidation, is not accepted by the AMF. 6.8 Squeeze-Out Mechanisms In France, squeeze-out mechanisms enable a bidder to acquire 100% of a target company’s shares after a tender offer, provided it holds more than 90% of the share capital and voting rights. There is no guaranteed method to achieve this threshold. The AMF clearance is not required if the squeeze-out price equals the tender offer price and either: (i) the offer followed the standard procedure by a bidder with less than 50% ownership; or (ii) a multi-criteria valua- tion and fairness opinion from an independent expert was provided during the tender offer. This valuation considers assets, profits, subsidiaries, business pros- pects, and the market price of the shares of the target. In other cases, AMF approval is needed to implement a squeeze-out procedure, requiring: (i) a multi-criteria valuation; (ii) a fairness opinion from an independent expert; and (iii) a review of specific documentation. Securities granting access to share capital can also be squeezed out if the bidder holds 90% on a diluted
basis. No similar procedure exists for non-listed com- panies. 6.9 Requirement to Have Certain Funds/ Financing to Launch a Takeover Offer Under French law, any tender offer must be fully fund- ed at the time the offer is filed with the AMF. The bid- der is required to provide a bank guarantee or proof of available funds, ensuring it has the financial capacity to complete the transaction. As a consequence, no tender offer that is subject to obtaining the necessary financing may be filed with the AMF. The role of the presenting bank is to guarantee the performance by the bidder of its obligations in con- nection with the tender offer (in particular its under- taking to acquire all the target shares tendered to the offer at the offer price). In order to be in a position to give such confirmation to the AMF in the filing letter, the presenting bank requires the bidder (or its financ- ing bank, as the case may be) to provide cash collat- eral for the corresponding amount on the trading day preceding the filing of the offer. This rule protects target shareholders from specula- tive bids and reinforces the credibility of the offer. 6.10 Types of Deal Protection Measures In France, bidders frequently employ various security measures to safeguard their position and mitigate the risk of transaction failure, especially in competitive M&A environments. The following mechanisms are designed to balance deterrence and fairness, protect- ing bidders’ interests in complex transactions. Break-Up Fees These are commonly agreed upon, requiring the target to pay a fee if the transaction fails due to specific con- ditions, such as accepting a rival bid. In public M&A transactions, break-up fees are subject to regulatory scrutiny to ensure they do not obstruct the free flow of offers, as noted by the Paris Court of Appeal in the Capgemini/Altran case (13 March 2020), and do not exceed 2% of the deal value. Match Rights These provisions allow the original bidder to match any superior counter-offer, providing a strategic
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