DENMARK Law and Practice Contributed by: Simon Milthers, Thomas Bøgedal Kristiansen, Mikkel Friis Rossa and Emil Steenberg, Bech-Bruun
Requirement to Have Certain Funds/Financing to Launch a Takeover Offer ). Conditions are not permitted in mandatory offers. 6.6 Deal Documentation It is customary to enter into a transaction agree- ment in connection with a takeover offer or a business combination/merger. In addition to recommending the offer, the target company may generally undertake to: • reasonably assist the offeror in soliciting acceptances of the takeover offer; • facilitate the publication and distribution of the offer document and other announce- ments from the offeror in connection with the takeover offer (in addition to the announce- ments that the target company is obligated to assist with publishing pursuant to the Danish Takeover Order); • not act in a manner that would render any offer condition impossible to satisfy; • assist with necessary steps to prepare for a refinancing of the target company post- completion; • expedite delisting application and convening an extraordinary general meeting (subject to the offeror acquiring sufficient shareholdings); • not dispose treasury shares (except for set- tlement of employee share incentive pro- grammes, which may be an undertaking by itself); • assist the buyer in obtaining merger clear- ance/regulatory approvals; and • other undertakings of a more administrative nature to assist with a smooth completion/ takeover, if the takeover offer is successful.
agreement to acquire shares on terms more favourable (to the seller) than those set out in the offer document, the buyer must corre- spondingly compensate all shareholders who accepted the takeover offer. • Mandatory offers are subject to a “high- est price rule” entailing that the offer price must at least correspond to the highest price that the buyer has paid for shares in the six months preceding the approval of the offer document. • In mandatory offers, the offer price is sub- ject to general Danish FSA supervision and scrutiny and, in extraordinary circumstances, control/regulation. Contingent value rights or other similar mecha- nisms 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, pro- vided that the satisfaction of such conditions are not within the control of the offeror. Customary conditions include (without limitation): • minimum acceptance condition (typically set at 90% to enable subsequent squeeze-out); • regulatory approvals; • no material adverse change; • no material disposals or acquisitions; • no changes to capital structure and articles of association; • no changes to management employment contracts; and • no adverse legislative changes or court judg- ments. A takeover offer cannot be made conditional on financing. A buyer must have certainty of funds when launching a takeover offer (see 6.9
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