NETHERLANDS Law and Practice Contributed by: Herald Jongen, Maarten de Boorder, Samuel Garcia Nelen and Jelmer Kalisvaart, Greenberg Traurig, LLP
6.5 Common Conditions for a Takeover Offer/Tender Offer A public offer is usually subject to “commence- ment conditions” – ie, conditions that must be satisfied (or waived) for the bidder to launch the offer, and to “offer conditions”, namely condi- tions that must be satisfied (or waived) in order to declare the offer unconditional. Common commencement conditions include: • no breach of the (material provisions of the) merger protocol; • absence of a material adverse change; • no change in the board’s recommendation; • compliance with employee consultation pro- cedures; • no legal prohibition of the public offer; and/or • no suspension of trading of the target com- pany’s shares. Similar conditions typically apply as offer condi- tions. In addition, the following conditions gener- ally apply: • all regulatory approvals have been obtained; and • a certain minimum acceptance threshold has been met. Finally, the adoption of certain general meeting resolutions (eg, the dismissal or appointment of directors) that will become effective upon settle- ment of the offer is generally included as an offer condition. In contrast to a voluntary public offer, the completion of a mandatory offer may not be made subject to any conditions. 6.6 Deal Documentation In the context of a takeover offer, although not statutorily mandated, it is customary in the Neth- erlands to outline the terms and conditions of a
price paid by the bidder for shares in the target in the one-year period preceding the announce-
ment of the mandatory offer. 6.3 Transaction Structures
For the acquisition of a public company in the Netherlands, most transactions are structured as a public offer or a takeover bid. The bidder is required to make a public announcement about its intention to acquire the target compa- ny according to Dutch corporate law. In most of these transactions, the purchase price is entirely paid in cash. Payment in either securities or a mixed form of cash and securities is also pos- sible. Less commonly, a takeover may take the form of a legal merger whereby either both companies merge into a new entity or one company absorbs the other. 6.4 Consideration and Minimum Price In most Dutch public company acquisitions in the technology industry, only cash is used as consideration. However, it is also possible to offer securities or a combination of cash and securities. Only in case of a mandatory offer do (minimum) price rules apply. A mandatory offer should be made at a fair price that will, in principle, be equal to the highest price paid by the bidder for shares in the target in the one-year period preceding the announcement of the manda- tory offer. In the context of private tech M&A transactions with high valuation uncertainty, the authors frequently encounter contingent value rights such as earn-out mechanisms granted to venture capital investors to bridge value gaps between the parties. These types of structures are not seen in the context of public M&A.
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