COLOMBIA Law and Practice Contributed by: Gabriela Mancero, Daniel Peña, Maria Fernanda González and Andrea Sánchez Gallardo, Peña Mancero Abogados
party that is 100% controlled by its majority shareholder. Once the sale is completed, the company is dissolved and liquidated so that the minority shareholders receive payment of the sale price as a distribution of the liquida- tion proceeds. • Partial division: Pursuant to Article 3 of Law 222 of 1995, the shareholders of a spun-off company may participate in the beneficiary company in a different proportion to that which they held in the spun-off company. This implies that the shareholders of the spin-off company may not even participate in the capital of the target company. In any case, such a decision must be taken by unanim- ity of those present at the general meeting at which the division is adopted. • Sunsetting of economic and political rights: Since the rights conferred by the shares of a company are considered to be economic rights, the company may claim, before a judge of the Republic (either as an action or as an exception), the expiration of the eco- nomic and political rights that have not been exercised by the minority shareholder during the applicable statute-of-limitations period (ten years). 6.9 Requirement to Have Certain Funds/ Financing to Launch a Takeover Offer The public acquisition offer will be allowed when the constitution and delivery of guarantees is accredited before the BVC. Such guarantees may be provided by the commission agent through whom the offer is made, the offeror or a third party, and in any case, they will be estab- lished to be in favour of the stock exchange and irrevocably available to it for the fulfilment of the operations resulting from the offer and/or the payment of the obligations arising from the execution of the public acquisition offer ( offerta pubblica di acquisto OPA) by the offeror.
The admissible guarantees are: • a deposit in legal Colombian currency in a banking institution legally authorised to oper- ate in Colombia, whose holder is the stock exchange; • a bank guarantee or irrevocable stand-by letter of credit, whose beneficiary is the stock exchange, issued by a local or foreign bank; • an insurance policy issued by an insurance company legally authorised to operate in Colombia, designating the stock exchange as the beneficiary; • debt securities issued or guaranteed by the nation; • assignment to the stock exchange of rights in collective investment funds or portfolios; and • a deposit of guarantee in a foreign currency. 6.10 Types of Deal Protection Measures Typically, a target company may grant deal pro- tection measures such as non-solicitation, non- compete, and non-disparagement provisions. Additionally, the target may commit to recom- mending the approval of the transaction to its shareholders. These protective provisions serve to align the interests of the target company with those of the acquiring party, minimising the risk of competing offers and ensuring that the target management actively supports the proposed transaction. 6.11 Additional Governance Rights The bidder can enter into a shareholders’ agreement to internally regulate the relationship between the shareholders of a company and their relationship as contracting parties vis-à-vis the company, in aspects additional or supple- mentary to those contemplated in the partner- ship agreement.
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