DENMARK Law and Practice Contributed by: Simon Milthers, Thomas Bøgedal Kristiansen, Mikkel Friis Rossa and Emil Steenberg, Bech-Bruun
Nordic exchange pursuing a dual-listing on Nas- daq Copenhagen to better connect with Danish investors. IPOs and initial listings are rarely pursued in two jurisdictions at once, owing to the complex nature of running a dual initial listing process as well as the additional compliance/disclosure regime. Larger already-listed companies may, and do sometimes, pursue a secondary listing of shares or depositary receipts (ie, American Depositary Receipts or similar) on a foreign exchange. 3.3 Impact of the Choice of Listing on Future M&A Transactions Whether a company’s choice to list on a foreign exchange would affect feasibility of a future sale depends on the rules regulating the relevant for- eign stock exchange and whether the foreign stock exchange is located within or outside the EU. A Danish company solely listed on a foreign exchange (ie, no domestic listing) would general- ly be subject to the takeover regulation applica- ble in the relevant foreign jurisdiction. However, if the foreign exchange is located within the EU, the takeover regulation in the jurisdiction of the exchange is likely derived from the EU Takeover Directive, which also forms the basis of the Dan- ish takeover regulation. In the event of an initial dual-listing domesti- cally and in another jurisdiction within the EU, the company must on the first day of trading announce whether it has opted to be subject to the Danish takeover regulations or the applicable regulations in the other jurisdiction. The Danish takeover regime does not apply to takeovers of companies listed on a non-regulated market (eg, multilateral trading facilities such as First North Copenhagen), nor does it apply to companies solely listed on a stock exchange outside the EU.
Accordingly, feasibility of a future sale of a com- pany listed on a foreign exchange is subject to an analysis of the specific applicable rules. Gen- erally, the Danish takeover rules are not consid- ered prohibitive to a future sale/takeover. Notwithstanding any applicable stock exchange laws, minority squeeze-outs (available to share- holders holding more than 90% of the share capital and voting rights) in Danish companies are regulated by the Danish Companies Act. This applies to all Danish companies, regardless of a company being listed on a foreign stock exchange. 4. Sale as a Liquidity Event (Sale of a Privately Held Venture Capital- Financed Company) 4.1 Liquidity Event: Sale Process In Denmark, the approach to sales processes varies, encompassing auction methods as well as direct negotiations with a chosen buyer. Lately, there has been a noticeable shift towards direct negotiations or auctions that swiftly evolve into one-on-one discussions – a shift indicative of a market that favours buyers. Nonetheless, technology firms with considerable valuations or promising potential still predominantly undergo auction processes to ensure competitive offers and achieve the highest possible sale price. 4.2 Liquidity Event: Transaction Structure The transaction structure for the sale of a private- ly held technology company with venture capital investors can vary, but there are some common trends and structures typically observed. One common structure is the full sale of the com- pany, where 100% of the shares are sold to the buyer, allowing founders and venture capital investors to fully exit and realise their returns.
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