BELGIUM Law and Practice Contributed by: Steven De Schrijver, Allegiance Law
6.2 Mandatory Offer Any acquisition, regardless of the quantity (even a single share), may be subject to prohibition or necessitate a mandatory bid for the target if it increases the shareholder’s aggregate holding to 30% or more. Nevertheless, the Belgian takeo- ver rules outline specific circumstances where there is no obligation for a mandatory bid, even if a person passes the 30% threshold in out- standing voting securities. It is crucial to note that a mandatory bid, being a legal requirement, cannot be made conditional and is irrevocable once initiated. The procedural rules for a man- datory public takeover bid align with those for a voluntary bid, except in terms of conditionality and price considerations. 6.3 Transaction Structures In Belgium, most transactions are share deals, mostly for tax reasons (in the absence of a capi- tal gains tax, see 4.2 Liquidity Event: Transac- tion Structure ). In 90% of all transactions, the purchase price is entirely paid in cash. Payment in shares or loan stock is very uncommon. On the other hand, a deferral of the payment of the purchase price is quite usual, being applied in 57% of all transactions. On average, around 22% of the purchase price is deferred for around 24 months. The use of an escrow account is also typical, being used in around 28% of all transac- tions. In certain cases, a takeover may take the form of a corporate merger, wherein the merger becomes effective upon approval by the gen- eral shareholders’ meeting of the companies involved. This structure involves either merging both companies into a new entity or absorbing one company into the other. Opting for a corpo- rate merger offers advantages over a takeover bid, allowing the merging companies to com-
• potentially discouraging rival bidders. Any transactions by the bidder or those acting in concert may be publicly disclosed before or at the start of the offer period, with general rules for significant shareholding disclosure applying throughout a public takeover bid. If a potential bidder begins accumulating a stake, disclosure is mandatory once voting rights exceed specified thresholds, which are typically at 5% and multiples thereof (10%, 15%, etc) – although some listed companies may have lower thresholds (often 3%). Consideration must also be given to voting securities held by par- ties in concert, including affiliates and existing shareholders with specific arrangements. Upon announcing the public takeover bid, the bidder must disclose its existing voting securities in the target. Subsequent disclosures are required by the target, bidder, parties in concert and others involved, with daily updates during the takeover bid period submitted to the Belgian Financial Services and Markets Authority (FSMA) regard- ing the acquisition or disposal of relevant securi- ties. Under the authority of the FSMA, individuals who make statements – directly or through interme- diaries – that raise questions about their intent for a public takeover bid can be compelled to make an announcement within a maximum peri- od of ten business days (“Put up or shut up”). Those confirming their intention must launch the bid within an agreed-upon timeframe with the FSMA. Failure to confirm within the set period bars both the individual and those acting in con- cert from initiating a takeover bid for the target company’s securities for six months following the announcement’s publication or the expiry of the FSMA-imposed declaration deadline, which- ever is later.
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