NETHERLANDS Law and Practice Contributed by: Herald Jongen, Maarten de Boorder, Samuel Garcia Nelen and Jelmer Kalisvaart, Greenberg Traurig, LLP
agreements. The target company will also pub- lish a position statement, which includes infor- mation about the views of the target company on the consideration offered by the bidder and the considerations and projections used to deter- mine the offer price (or exchange ratio), includ- ing the quantitative basis on which the target has taken its position vis-à-vis the consideration offered and the consequences of the public offer on employees, employment conditions and the target company’s place(s) of business. It is com- mon practice for the target company’s boards to obtain one or more fairness opinions. If these are obtained, it is required that they be disclosed as an attachment to the position statement. The management board is responsible for the management of the company and its busi- ness, under the supervision of the supervisory board. The management board’s responsibilities include, inter alia, the day-to-day management of the company’s operations. The management board may perform all acts necessary or useful for achieving the company’s objectives, with the exception of those acts that are prohibited or expressly attributed to the general meeting or supervisory board by law or by the company’s articles of association. 11. Duties of Directors 11.1 Principal Directors’ Duties In performing their duties, the management board and supervisory board are required to be guided by the interests of the company and its business. Based on case law, this is under- stood to mean that the boards must promote the sustainable success of the business of the company. While doing so, they should take into account the interests of the company’s stake- holders (which generally includes various par-
ties, such as shareholders, creditors, employees and customers). The fiduciary duties of the management board and supervisory board do not change if the com- pany is involved in a contemplated business combination. 11.2 Special or Ad Hoc Committees In Dutch takeover situations, it is common for the management board to work closely with the supervisory board. To this end, it is not uncom- mon for the target company to establish a special committee to intensively supervise the transaction process and the related decision- making. Such a committee can be composed of supervisory directors only, or a mix of super- visory and management directors. Establishing a special committee can ensure a proper balanc- ing of interests and a proper decision-making process, and furthermore prevent (the appear- ance of) conflicts of interest within the boards as much as possible. A special committee closely monitors the transaction process, provides the boards with solicited and unsolicited advice and prepares the decision-making phase. 11.3 Board’s Role The board is often actively involved in negotia- tions. In the Netherlands, it is generally permissi- ble to use defensive measures (eg, a foundation that has a call option on preference shares) to block or impede an unsolicited takeover offer. Most of the time, however, such defensive meas- ures are not exercised by the target company’s directors but by an independent foundation. It is not common practice to have shareholder litiga- tion challenging the board’s decision to recom- mend an M&A transaction, although shareholder activism has occurred in the past.
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