DENMARK Law and Practice Contributed by: Simon Milthers, Thomas Bøgedal Kristiansen, Mikkel Friis Rossa and Emil Steenberg, Bech-Bruun
“Put Up or Shut Up” Requirement There is no “put up or shut up” requirement under Danish law. 6.2 Mandatory Offer The obligation to make a mandatory offer is triggered by the offeror having acquired “control” over the listed target company. A stake representing at least a third of the voting rights in the company is generally pre- sumed to constitute control unless special circum- stances apply (eg, another shareholder already holds a larger stake than the offeror). The shareholdings/ stakes of persons acting in concert will be aggregated for the purpose of determining whether they together are able to exercise control over the company. 6.3 Transaction Structures On the Danish market, the most common structure is a voluntary offer. Mandatory offers are typically not the preferred route for offerors looking to obtain 100% ownership, as mandatory offers cannot be con- ditional (ie, cannot be conditioned on at least 90% of the shares being tendered into the offer which would enable the offeror to carry out a squeeze-out of the remaining minority shareholders). Statutory mergers involving listed companies are rela- tively common among financial institutions. However, in recent years, there have also been some statutory mergers involving listed companies in other industries as well as reverse acquisitions of listed companies. Nevertheless, these are still somewhat unusual on the Danish market. Alternative structures are asset deals/spin-offs of parts of the public company’s business and private acquisitions of shares, which may be subject to condi- tions as well as combined with a non-regulated public offer. Such alternative structures may be viable options depending on the specific facts and circumstances. 6.4 Consideration and Minimum Price Whereas recent Danish public takeovers of compa- nies in the technology industry have been structured as cash offers, the consideration structure is not nec- essarily prompted by the specific industry of the target company. Cash may also be used as consideration in mergers.
There is generally no statutory minimum price require- ment in either takeover offers or business combina- tions/mergers. For both structures, however, various price regulation/control mechanisms do apply. In mergers involving listed companies, an independ- ent appraiser is required to provide a statement on the merger consideration and the basis/method for determining the merger consideration. Moreover, shareholders – having reserved the right to do so at a general meeting – may demand compensation by commencement of legal proceedings if they claim that the merger consideration was unfair or unreasonable. For takeover offers, various price regulation mecha- nisms apply. • If the offeror during the offer period enters into an agreement to acquire shares on terms more favourable (to the seller) than those set out in the offer document, the offeror must correspondingly improve the terms of the offer to all shareholders. • If the offeror for a period of six months after com- pletion of a takeover enters into an agreement to acquire shares on terms more favourable (to the seller) than those set out in the offer document, the buyer must correspondingly compensate all share- holders who accepted the takeover offer. • Mandatory offers are subject to a “highest price rule” entailing that the offer price must, as a minimum, correspond to the highest price that the buyer has paid for shares during a period of six months preceding the approval of the offer docu- ment. • In mandatory offers, the offer price is subject to general FSA supervision and scrutiny and, in extraordinary circumstances, control/regulation. Contingent value rights or other similar mechanisms are generally not used in takeover offers or statutory mergers involving listed companies. 6.5 Common Conditions for a Takeover Offer/ Tender Offer Conditions are permitted in voluntary offers, provided that the satisfaction of such conditions is not within the offeror’s control. Customary conditions include (without limitation):
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