BELGIUM Law and Practice Contributed by: Steven De Schrijver, Allegiance Law
fer or dispose of their securities before the bid’s closure unless it is part of accepting the bid, and they pledge not to solicit or engage in discus- sions related to any third-party bid. Importantly, these specific undertakings are mandated to be disclosed in the prospectus – a crucial step that enhances transparency throughout the entire takeover process. Agreements in Recommended Bids In the event of a recommended bid, the bidder and the target – if endorsed by the target’s board – can mutually agree on various bid-related mat- ters. These agreements, encompassing non- solicitation, exclusivity, break-up fees, treas- ury share tendering and standstill obligations, must be disclosed in the prospectus. Although comfort letters and letters of intent are typically favoured over formal agreements, it is advised that the target’s board – even if favourably dis- posed towards the bidder – maintains a neutral stance to avoid discouraging potential counter- bidders who might present superior prospects or a better price for the target’s security holders. The board’s neutrality is emphasised in letters of intent. The target’s board, adhering to the gen- eral rule of acting in the target’s best interest, must objectively assess any counter-bid in the response memorandum and consider the overall welfare of the target, its security holders, credi- tors and employees. 6.7 Minimum Acceptance Conditions The Takeover Decree mandates that a bid encompasses all securities issued by the target and possesses terms ensuring its viability and irrevocability. Although bids can be contingent on competition authority or other regulatory approvals, the FSMA may approve additional objective conditions, such as an acceptance threshold, the absence of a material adverse event beyond the bidder’s control, the with-
holding of dividends, and no amendments to the target’s articles of association. However, it is noteworthy that the FSMA tends to hesitate in imposing conditions that could potentially impede the success of the bid in practice. 6.8 Squeeze-Out Mechanisms A holder possessing 95% of a company’s voting securities has the authority to compel all other holders of voting securities to tender their secu- rities through a squeeze-out bid. This bid can be initiated independently by a person already holding 95% of voting securities or as part of a public takeover bid – voluntary or mandatory – where the bidder secures 95% of outstanding voting securities. In the context of a public takeover bid, specific conditions must be met, including the bidder holding 95% of the share capital with voting rights and voting securities and acquiring at least 90% of the relevant share capital through the bid. If these conditions are met, the bid is reopened for at least 15 business days, com- mencing within three months after the initial acceptance period. Any untendered securities automatically transfer to the bidder In a standalone squeeze-out bid, an independ- ent expert must assess the offered price, which can only be in cash. In the event of a summa- rised squeeze-out bid, non-accepting securities holders have the right to demand acquisition on the same terms. Post-takeover bid, for one year, the bidder and those acting in concert are prohibited from acquiring applicable securities on more favour- able terms without compensating all previous tendering security holders for the price differ- ence.
23
CHAMBERS.COM
Powered by FlippingBook