NETHERLANDS Law and Practice Contributed by: Herald Jongen, Maarten de Boorder, Samuel Garcia Nelen and Jelmer Kalisvaart, Greenberg Traurig, LLP
6. Acquisitions of Public (Exchange- Listed) Technology Companies 6.1 Stakebuilding It is not uncommon for a bidder to acquire shares in the target prior to launching a public offer or during the offer period. This so-called “stakebuilding” is subject to disclosure requirements. Anyone who acquires or disposes of shares or voting rights in a listed com- pany as a result of which the percentage of capital or votes held reaches, exceeds or falls below certain thresholds must report this to the Dutch Authority for the Financial Markets ( Autoriteit Financiële Markten or AFM) without delay. The same applies to the acquisi- tion or disposal of financial instruments that represent a short position with respect to shares. The following thresholds trigger a notification obligation: 3%, 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%, 75% and 95%. The notifications are published in a public register on the AFM website. There is no general obligation for shareholders to dis- close the purpose of their acquisition or their intention regarding control of the company. The Dutch Corpo- rate Governance Code includes rules that require insti- tutional investors to disclose their engagement policy and the implementation thereof on their website. If someone creates the impression that they are prepar- ing a public offer, the target can request the AFM to force the alleged bidder to publicly state its intentions. This is the so-called put up or shut up rule. In that case, the alleged bidder must issue a press release in which it announces a public offer or announces that it has no intention of making a public offer. If the press release states that the party in question has no inten- tion of making an offer, they (and the persons with whom they are acting in concert) are prohibited from announcing or making a public offer for a period of six months after that press release. In case a bidder launches a public offer, the offer memorandum should include information on the intentions of the bidder regarding the activities, locations, employees, man- agement and governance of the target after declaring
• legal compliance – the spin-off must follow Dutch Civil Code and, if the company is listed, securities rules apply; • corporate approvals – shareholder and board approvals are needed for both the spin-off and the subsequent merger or acquisition; • tax considerations – Dutch tax law allows for tax- neutral spin-offs under certain conditions if struc- tured properly, which is crucial when a business combination follows; • regulatory approvals – large transactions may require clearance from the Dutch Competition Authority ( Autoriteit Consument & Markt ACM) and/ or FDI approvals; and • timing – the sequence should be carefully planned to avoid legal and tax complications. 5.4 Timing and Tax Authority Ruling A typical timing for a spin-off depends on its structure. If the spin-off is structured as a statutory demerger, the typical time required is at least two months, con- sidering preparation time, a statutory waiting period of one month and a limited period for execution. This assumes there is no objection from creditors at the end of the waiting period. If the spin-off is structured as a distribution of subsidiary shares (which is often the case if a business is spun off to existing sharehold- ers), this can be done relatively quickly from a corpo- rate law standpoint (in a matter of weeks). However, if such a spin-off involves the distribution of the subsidi- ary of a listed company and the subsidiary shares are admitted to listing and trading on a stock exchange, this adds a significant period of time to the timetable, given the required regulatory approval process. Parties would need to obtain a ruling from a tax authority prior to completing a spin-off if not all condi- tions for a tax-free spin-off at corporate level are met. In such case, a request should be submitted to the Dutch tax authorities prior to the spin-off. Typically, the Dutch tax authorities issue a decision on such request within two months. Furthermore, at the corporate and/ or shareholder level, a request for certainty on whether the spin-off is not predominantly aimed at avoiding or deferring taxation may be submitted to the Dutch tax authorities prior to the spin-off. Typically, the Dutch tax authorities issue a decision in response to such request within two months.
the offer unconditional. 6.2 Mandatory Offer
There is a mandatory offer threshold in the Nether- lands for bidders exercising, directly or indirectly, at
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