DENMARK Law and Practice Contributed by: Simon Milthers, Thomas Bøgedal Kristiansen, Mikkel Friis Rossa and Emil Steenberg, Bech-Bruun
11.3 Board’s Role In takeover offers, the board’s primary role is to ensure that the shareholders are presented with the best possible offer. A board cannot prevent or impede a potential offer – although the board may (and commonly does) engage in negotia- tions with a bidder for the purpose of evaluating an offer and ensuring that the potential trans- action when presented to the shareholder is aligned with the best interests of the company and its shareholders. In takeover offers, the board of the target com- pany is required to publish a statement on the offer, which may be neutral or in the form of a recommendation to shareholders to accept the offer or to reject the offer. In a friendly process, it is customary to obtain a positive recommenda- tion from the target company’s board. A target company’s board commonly obtains a fairness opinion from an independent financial adviser to support the board’s statement/recommendation of the offer. Shareholder litigation challenging an M&A board decision is less common in Denmark. However, it can occur if shareholders claim that the board acted against their interests or overlooked alter- natives (ie, the board did not perform its duty to ensure that the best possible transaction was made or, in the case of a takeover offer, was presented to the shareholders). 11.4 Independent Outside Advice External legal counsel is typically required both for private and public M&A transactions, with financial advisers and accountants also playing key roles. In takeover offers or statutory merg- ers/business combinations involving publicly listed companies, it is customary for the target company’s board to hire independent financial
if they are, no FSA filing or approval should be necessary.
11. Duties of Directors 11.1 Principal Directors’ Duties
The principal duties of directors in a business combination are primarily owed to the share- holders of the company as a whole. These duties include the following. • Directors must act in good faith in what they consider to be the best interests of the company and its shareholders. This includes avoiding conflicts of interest and not using their position to gain personal benefits. • Directors must act in accordance with the company’s constitution and only exercise their powers for the purposes for which they were conferred. The directors must consider the interests of other stakeholders, such as employees, credi- tors and the community, especially in situations where the company is facing financial difficul- ties. However, the overarching duty remains to act in the best interests of the company and its shareholders to ensure the overall success and sustainability of the company. 11.2 Special or Ad Hoc Committees It is uncommon for boards of directors to estab- lish special or ad hoc committees specifically for business combinations. However, in certain situations – such as mergers between one or more listed companies – it may be common to establish a special committee. These commit- tees are typically formed to negotiate the deal, plan for integration, assess separation issues and synergies, and handle conflicts of interest.
133 CHAMBERS.COM
Powered by FlippingBook