PORTUGAL Law and Practice Contributed by: Duarte Schmidt Lino, Raquel Azevedo, Alexander Ehlert and Leonor Melo Bento, PLMJ
• the minimum and maximum quantities of securities that the offeror proposes to acquire; • the term of the offer; and • the conditions of effectiveness to which the bid is subject, among other requirements defined in the Portuguese Securities Code. 10.3 Producing Financial Statements In a takeover, the bidder generally does not need to produce specific accounts or include them in the prospectus. There is a general requirement for listed companies to prepare their accounts in IFRS-EU format. 10.4 Disclosure of Transaction Documents In a takeover bid, the offer documents (prelimi- nary announcement, prospectus and possibly other ancillary documents) are published, as is a report for the target’s board of directors on the merits of the bid. After the offer period, the results of the offer are also published. Directors are generally bound by two fundamen- tal duties – the duty of care and the duty of loyal- ty, which are also applicable to business combi- nations. They must fulfil these duties diligently, in good faith and for the company’s benefit, taking into account the interests of the shareholders, employees, creditors and other stakeholders. 11.2 Special or Ad Hoc Committees In a limited liability company by shares (LLC), the board may establish an executive commit- tee to which certain management powers will be delegated (and which is, inter alia, typical- ly in charge of negotiating and implementing 11. Duties of Directors 11.1 Principal Directors’ Duties
business combinations), as well as specialised committees. In the case of listed companies, the most typical specialised committees are on corporate governance, remuneration, evalua- tion, appointments and risk, as recommended by the Portuguese Corporate Governance Code. In certain regulated sectors, specialised commit- tees (such as remuneration, risk and selection committees) are legally required. The shareholders may, in turn, create and appoint a remuneration committee, which will be responsible for establishing and managing the remuneration policy for the company’s corporate bodies, including the directors. 11.3 Board’s Role The board is generally not limited to a recom- mending role, and can be actively involved in the negotiations. However, in the case of a takeo- ver, which is launched over a listed company, the Portuguese Securities Code provides for a board neutrality rule, applicable in most cases. This rule stipulates that as soon as the board of directors becomes aware that a bid will be launched to acquire more than one third of a specific category of the company’s shares, and until or before the conclusion of the takeover process, the board of directors cannot make any decisions that could significantly impact on the bidder’s objectives outside the normal management of the company. This rule can be bypassed, however, by a decision of the share- holders’ general meeting expressly convened for the purpose of deciding on such actions and approved by two thirds of votes issued. Nevertheless, the board of directors plays a very important role in the takeover process over a listed company, as it is required to issue a report on the terms and conditions of the takeover bid that must be shared with the bidder and with the
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