DENMARK Law and Practice Contributed by: Morten Krogsgaard and Lennart Meyer Østenfjeld, Moalem Weitemeyer
9.2 Listed Targets Regime The Danish takeover regimes comprises: • the Danish Capital Markets Act; • the Danish Executive Order on Takeover Bids; • Guidance issued by the Danish FSA; and • Rules for issuers on Nasdaq Copenhagen with respect to matters such as delisting. These rules are supplemented by the Danish Companies Act. Certain Funds Requirement The takeover regime includes a certain funds requirement, which means: • prior to notification of a mandatory offer or a voluntary offer, the offeror must be fully able to fulfil any claim in respect of cash consid- eration; and • the offeror must also have taken all reason- able steps to ensure that any other form of consideration can be paid, such as shares. The offer document must contain information on financing but there is no requirement to submit commitment documents or similar. In practice, the considerations and discussions are similar to those in respect of other “certain funds” require- ments in acquisition financing. Acquisition Finance Considerations In acquisition finance, particular issues in rela- tion to public-to-private transactions include: • reaching required thresholds (normally 90% enabling squeeze-out and delisting) as a con- dition to utilisation; • ability and conditions to accept lower levels of acceptance; and
• Sensible and proper management of the undertaking in which the acquisition is intended. • The likely influence of the intended acquirer on the undertaking. • The suitability and the financial soundness of the intended acquisition in relation to the fol- lowing criteria. (a) The reputation of the intended acquirer. (b) The reputation and experience of the post-completion management (fit and proper). (c) The financial situation of the intended acquirer, particularly with respect to the nature of the business to be operated or intended to be operated post-completion. (d) Whether the undertaking can continue to comply with the supervision requirements in the legislation (in particular whether the group of which the undertaking may be- come a part has a structure that makes it possible to perform effective supervision and effective exchange of information between the competent authorities). (e) Whether, in connection with the intended acquisition, there are grounds to suspect money laundering or terrorist financing. The Danish FSA may (and in certain instances will) suspend the voting rights associated with equity investments if the rules are not adhered to. Facility Agreement Approval from the Danish FSA will normally be a condition precedent to first utilisation, which is similar to merger control. Regulatory compli- ance and required authorisations are addressed in the representations, undertakings and events of default in the facility agreement.
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