FRANCE Law and Practice Contributed by: Bertrand Barrier, Anne Toupenay-Schueller and Cyril Deniaud, Jeantet
advantage. This was notably used in a recent bidding war for a French renewable energy company, allowing the initial bidder to maintain its position. Non-Solicitation Provisions Targets often commit not to seek alternative bids after signing exclusivity agreements, focusing efforts on finalising the negotiated deal. 6.11 Additional Governance Rights When a bidder acquires a significant but non-con- trolling stake in a French company, it often negotiates additional governance rights to protect its investment and influence strategic decisions. These rights are particularly important in deals where the bidder aims for strong oversight without full ownership. • Board representation: A common request is the appointment of one or more directors proportion- ate to the bidder’s shareholding. • Veto rights: Bidders may seek veto power over key decisions like major acquisitions, capital increases, or significant budget changes, ensuring they have a say on critical matters. • Information rights: Enhanced access to financial reports and strategic plans allows the bidder to monitor performance closely and anticipate risks. • Shareholder agreements: These often formalise governance rights, covering voting commitments, pre-emption rights, and rules for future share trans- fers. 6.12 Irrevocable Commitments In the French M&A market, bidders often seek com- mitments from key shareholders to increase the likelihood of a successful tender offer. These com- mitments, which must be disclosed to the target, the AMF and the public, typically involve shareholders agreeing to tender their shares. However, the AMF and French case law emphasise that irrevocable commitments should not undermine the principle of free competition between offers. As such, these commitments usually include provisions allowing shareholders to withdraw if a superior offer arises, ensuring a balance between deal security and shareholder interests.
Negotiations for these commitments generally occur early in the process, providing the bidder with assur- ance and demonstrating strong support for the trans- action. These practices aim to enhance deal certainty while respecting regulatory principles and protecting share- holder rights. 6.13 Securities Regulator’s or Stock Exchange Process After the filing of a draft offer with the AMF, it reviews the draft offer documentation (composed of the draft offer document of the bidder, the draft response offer document of the target, as well as their respective technical documents containing certain legal, financial and accounting information on the bidder and on the target) in order to issue a clearance decision before the offer period can be officially opened. Once the AMF has received the two draft offer docu- ments, it takes in theory between five and ten trading days to obtain clearance of the offer from the AMF, subject to any counter-offers being filed or complex issues arising. In practice, it takes at least one month. The AMF will check that the proposed offer price complies with applicable minimum pricing rules, it being remembered that under French law: (i) no such minimum pricing rules apply to voluntary tender offers; and (ii) for mandatory tender offers, the proposed offer price must be at least equal to the highest price paid by the bidder or its concert parties for shares of the issuer in the preceding 12 months (see 6.4 Considera- tion and Minimum Price ). Upon clearance of the offer by the AMF, the AMF immediately sets the offer timetable, including the opening date of the offer, the offer period (the dura- tion of which will depend on the structure of the offer, see 6.3 Transaction Structures ) and the closing date. Under the “normal” procedure, such timeline may be extended when filing a counter-offer (which can be filed with the AMF until the fifth trading day pre- ceding the end of the offer period), in which case the AMF may adjust the timeline to allow a fair compari- son between the offers and to extend the offer period
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