FRANCE Law and Practice Contributed by: Bertrand Barrier, Anne Toupenay-Schueller and Cyril Deniaud, Jeantet
most significant information on the bidder published by the bidder during the ongoing financial year. The “other information” document prepared by the target company and filed with the AMF will contain a cross- reference to its last statutory financial statements and, where applicable, its last consolidated financial state- ments, and an update on the most significant informa- tion on the target company published by the target company during the ongoing financial year. In addition, pro forma financial statements must be included in a prospectus or exemption document if the transaction alters any key business size indica- tors of the issuer by over 25%. Companies listed on a regulated market are required to prepare their consolidated financial statements in accordance with International Financial Reporting Standards (IFRS), as mandated by EU regulations. For non-listed com- panies, French GAAP or national accounting stand- ards apply, although IFRS may be used voluntarily in some cases, particularly in cross-border transactions or when preparing pro forma financial information for a prospectus. 10.4 Disclosure of Transaction Documents For listed companies, the AMF requires a draft offer document with key transaction details, but only sig- nificant information from contractual documents is publicly disclosed. 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.
Directors owe duties primarily to the company itself, not directly to all stakeholders. However, the board must consider social and environmental impacts when determining strategy, and employee representatives must be informed and consulted before finalising bind- ing agreements in companies with over 50 employees. Directors can be held liable – both civilly and crimi- nally – to the company or third parties for breaching applicable laws or constitutional documents, or for mismanagement. 11.2 Special or Ad Hoc Committees In France, private M&A transactions do not imply the establishment of special or ad hoc committees in the context of business combinations. However, the situation is different in the context of public M&A transactions. In the case of a public offer likely to cause conflicts of interest within the board of directors, or to jeopardise equal treatment between the target company’s shareholders, or to involve a squeeze-out procedure, the board of directors of the target company has to establish an ad hoc committee. Ad hoc committees are in charge of making recom- mendations on the appointment of an independent expert, monitoring the independent expert’s work, and preparing a draft reasoned opinion on behalf of the board of directors on the proposed offer. Such ad hoc committees must comprise a majority of In a public M&A context, the board of directors of the target company is not involved in the negotiations. In such a case, the board of directors of the target company must only issue a reasoned opinion on the tender offer, providing shareholders with an informed assessment of its terms, fairness, and potential con- sequences. Since the Florange Law of 2014 and the transfer of responsibility for implementing defence measures to the members of the board, the directors can have their own opinion on the admissibility of the offer in the interests of the stakeholders involved. This means that the directors can “just say no” and imple- ment defensive measures which will repel the bidder, independent directors. 11.3 Board’s Role
11. Duties of Directors 11.1 Principal Directors’ Duties
In France, directors’ principal duties in business com- binations include acting in good faith to promote the company’s success for the benefit of shareholders. Directors must act in accordance with the corporate interest and with loyalty throughout M&A transactions. They are required to comply with legal pre-contractual information obligations and maintain discretion during negotiations.
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