PARAGUAY Law and Practice Contributed by: Mauro Mascareño, Carlos Vargas and Rodrigo Gómez Sánchez, Mascareño Vargas – Asesores
11.4 Independent Outside Advice It is standard practice for shareholders to seek inde- pendent financial and legal advice during a business combination. The board’s involvement is crucial, and they may also seek outside advice. While not manda- tory, a fair opinion from a financial adviser is often obtained in significant transactions. Its purpose is to ensure the offer is fair to shareholders from a financial perspective.
lish committees to oversee negotiations and protect shareholder interests. 11.3 Board’s Role Typically, during the initial stage, the partners engage in negotiations. If shareholders approve, the board of directors may then become involved. In this scenar- io, the board may actively participate in negotiations throughout an M&A transaction. It is responsible for recommending or rejecting offers and may also defend the company against hostile bids if necessary. While shareholder litigation challenging the board’s deci- sions is uncommon in Paraguay, it can occur, espe- cially if the board is perceived to be acting against the best interests of the shareholders.
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