BELGIUM Law and Practice Contributed by: Steven De Schrijver, Allegiance Law
and a subsequent memorandum in response to the approved prospectus, addressing various aspects such as comments on the prospectus, statutory clauses affecting securities transfera- bility, opinions on the offer’s consequences, the bidder’s strategic plans, and the opportunity for security holders to sell their securities. The company must treat shareholders and cer- tificate holders who are in similar circumstances in the same way. The articles of association may provide that shares of a particular class or desig- nation have special controlling rights in the com- pany under the articles of association. Notably, Belgian law does not prescribe specific duties for controlling shareholders in M&A transactions. 11.2 Special or Ad Hoc Committees Belgian law does not require the formation of a special committee in respect of a takeover offer. 11.3 Board’s Role In general, the initiation of a takeover bid does not necessitate approval from the target’s board. However, the target’s board has the option to provide input on the bid through commenting on the completeness and potentially misleading aspects of the draft prospectus and formulating a response memorandum that may incorporate dissenting views. Nevertheless, practical con- siderations often lead the response memoran- dum to align with the opinions of the (controlling) shareholders, owing to their substantial repre- sentation on the board.
Additionally, a defensive tactic employed by the target’s board against (hostile) takeovers involves leveraging the concept of “authorised capital”, granting the board discretionary power to increase the target’s capital as deemed nec- essary. Directors can take defensive measures as long as these are in the company’s best inter- est. In this context, the target board must – in particular –take into account the interests of all security holders, as well as those of its employ- ees and creditors. 11.4 Independent Outside Advice In the context of a business combination, com- panies typically enlist the support of investment banks and legal professionals – occasionally seeking guidance from consultants and other experts to provide insights on the proposed transaction. As a standard part of due diligence, the board of directors and supervisory directors often obtain fairness opinions from financial advisers in order to evaluate the appropriate- ness of the transaction price. Although seek- ing advice does not absolve directors of their responsibilities, it can be considered a mitigating factor when evaluating their actions in a legal context later on.
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