DENMARK Law and Practice Contributed by: Simon Milthers, Thomas Bøgedal Kristiansen, Mikkel Friis Rossa and Emil Steenberg, Bech-Bruun
Purpose of Acquisition and Plans A buyer is not required to disclose its intentions or the purpose of the stakebuilding in its notifica- tion of major shareholdings. “Put Up or Shut Up” Requirement There is no “put up or shut up” requirement in Danish law. 6.2 Mandatory Offer The obligation to make a mandatory offer is trig- gered by the offeror having acquired “control” over the target listed company. A stake repre- senting at least a third of the voting rights in the company is generally presumed to constitute control unless special circumstances 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 togeth- er are able to exercise control over the company. 6.3 Transaction Structures The most common structure is a voluntary offer. Mandatory offers are typically not the preferred route for offerors looking to obtain 100% owner- ship, as mandatory offers cannot be made con- ditional (ie, cannot be conditioned on at least 90% of the shares being tendered into the offer). In recent years, there have been some statutory mergers involving listed companies, as well as reverse acquisitions of listed companies. Nev- ertheless, these are still somewhat unusual on the Danish market. Alternative structures are asset deals/spin-offs of parts of the public company’s business, statu- tory mergers (including cross-border mergers), and private acquisitions of shares, which may be both subject to conditions as well as combined with a non-regulated public offer. Such alterna-
tive structures may be viable options depending on the specific facts and circumstances. 6.4 Consideration and Minimum Price Whereas recent Danish public takeovers of companies in the technology industry have been structured as cash offers, the considera- tion structure is not necessarily prompted by the specific industry of the target company. Cash may also be used as consideration in mergers; however, in the few mergers involving listed companies that have taken place in recent years, the merger consideration has in each case been in the form of shares. There is generally no statutory minimum price requirement in either takeover offers or busi- ness combinations/mergers. For both struc- tures, however, various price regulation/control mechanisms do apply. In mergers involving listed companies, an inde- pendent appraiser is required to provide a state- ment on the merger consideration and the basis/ method for determining the merger considera- tion. 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 mechanisms apply, as follows. • 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 completion of a takeover enters into an
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