DENMARK Law and Practice Contributed by: Simon Milthers, Thomas Bøgedal Kristiansen, Mikkel Friis Rossa and Emil Steenberg, Bech-Bruun
6.12 Irrevocable Commitments It is common to obtain irrevocable commitments from key shareholders. They are typically provided as conditional, unilateral declarations stipulating that the shareholder will accept an offer, provided that the offer price is equivalent to (or higher than) an amount agreed between the shareholder and the buyer. Irrevo- cable undertakings may be “hard” (no revocation in the event of a competing offer, irrespective of the offer price of such offer) or “soft” (may be revoked in the event of a competing offer with a higher price that is not matched by the original offeror). The terms of the irrevocable undertakings are subject to negotiations. Irrevocable undertakings may also include waivers of certain protection rights otherwise afforded to share- holders under the Danish Takeover Order, including the equal treatment principle (meaning, inter alia, that a key shareholder may, on an informed basis, irrevo - cably commit to accept a lower offer price than the offer price offered to other shareholders of the target company). 6.13 Securities Regulator’s or Stock Exchange Process The offer document must be approved by the FSA pri- or to publication. A timetable for review and approval is typically agreed prior to the launch of the takeover offer (and the review process may be commenced in advance as well). The offer document must be published no later than four weeks after the launch announcement; however, in practice, it is typically published between one and two weeks after launch. In voluntary offers, the FSA’s primary focus is the offer conditions so as to ensure that the conditions are not within the buyer’s control and that the level of disclosure is otherwise acceptable. Offer documents for mandatory offers are subject to enhanced scrutiny and price review (and potential adjustment). The FSA does not decide the individual timeline for the takeover offer. Pursuant to the Danish Takeover Order, the offer period must be at least four weeks and no more than ten weeks, unless regulatory approvals are still outstanding (in which case, the offer period may be extended for up to a maximum of nine months).
Competing offers may impact the timeline, given that the offer period relating to a competing offer will necessitate a corresponding extension of the offer period relating to the original offer (if the original offer is not withdrawn in connection with the announce- ment of the competing offer). The ten-week limit appli- cable to the offer period is calculated on the basis of the most recently published offer document (entailing that the offer period expiry is aligned for all offers). However, if the offer period in a competing offer is extended beyond ten weeks for the purpose of obtain- ing regulatory approvals, and another offer does not need regulatory approvals (or has already obtained them), such offer does not need to extend the offer period beyond ten weeks. 6.14 Timing of the Takeover Offer The initial offer period in a takeover offer must be between four to ten weeks. The offer period may be extended beyond ten weeks if regulatory/antitrust approvals are not obtained prior to the expiry of the offer period and the takeover offer has been made conditional on such approvals. In any case, the offer period cannot exceed nine months (however, see below regarding dispensation). Merger filings are typically made immediately after the takeover offer has been launched (ie, the time when the buyer has made public its intention to launch the offer). The timeframe for obtaining regulatory approvals differs from case to case. In complex transactions necessitating merger filings in several jurisdictions and/or to the EC, the maximum offer period of nine months may be inadequate. In such case, the buyer may consider seeking a dispensation from the FSA. 7. Overview of Regulatory Requirements 7.1 Regulations Applicable to a Technology Company Setting up and starting to operate a new company in certain sectors of the technology industry in Denmark can be subject to specific regulations, depending on the sector and the nature of the business activities.
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