PORTUGAL Law and Practice Contributed by: Duarte Schmidt Lino, Raquel Azevedo, Alexander Ehlert and Leonor Melo Bento, PLMJ
6.10 Types of Deal Protection Measures The general rule is that directors need to act in the interest of the company and that the offerors (if there are competing offers) need to be treated equally. Break-up fees are increasingly used in private M&A transactions, but not in takeovers. In the case of mergers, the board needs to take the transaction to the general meeting for approval. In general, Portuguese law is more restrictive in measures that would negatively affect the deal – for example, the board is generally subject to the “stand still” rule during an offer, rather than to protecting it. 6.11 Additional Governance Rights If 100% ownership of the target is not acquired, and assuming that the articles of association of the target do not establish higher thresholds, the acquisition of a stake representing more than 50% of the voting rights in a Portuguese com- pany will allow the acquirer to individually decide on the composition of the company’s governing bodies (namely the board of directors), approv- al of accounts, etc. The acquisition of a stake representing more than two thirds of the voting rights will also enable the acquirer to approve the more structural matters concerning the com- pany – eg, the amendment of articles of associa- tion, merger, demerger, capital increase, etc. The relevant votes for these matters are the votes cast, so in practice a lower holding (depending on the usual general meeting attendance) may also enable such approvals. 6.12 Irrevocable Commitments It is common to have statements from major shareholders confirming whether they will sell in the offer and whether they support the trans- action. These commitments may have certain caveats/conditions including in relation to com- peting bids.
6.13 Securities Regulator’s or Stock Exchange Process The CMVM needs to approve the prospectus and register the offer. The offeror needs to sub- mit a draft prospectus within 20 days of the pre- liminary announcement of the offer. The CMVM then has eight days to review the offer docu- mentation, but in practice this is an interactive process that will take several weeks. If the offer is subject to conditions to launch, these may delay the process for several months. A com- peting offer may only be launched up to the fifth day before the end of the first offer period, and both offer periods must finish on the same date, so adjustments to the calendar may be required. 6.14 Timing of the Takeover Offer It is typical for parties to obtain regulatory and competition clearances between announcement and launch. In fact, these are usually legal condi- tions to launch. Hence, they do not usually affect the offer period length.
7. Overview of Regulatory Requirements 7.1 Regulations Applicable to a Technology Company
The regulation will depend on the type of tech- nology industry at stake. For example, the set- ting-up and starting of operations of information and communications technology (ICT) compa- nies in Portugal in sectors such as media and electronic communications is subject to spe- cific regulations. The National Communications Authority (ANACOM) and the Portuguese Regu- latory Authority for the Media ( Entidade Regu- ladora para a Comunicação Social – ERC) are the regulatory bodies involved in the approval of provision of media (radio and television broad-
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