NETHERLANDS Law and Practice Contributed by: Gianluca Kreuze, Ruben den Hollander, Anne van Geen and Sanne van Esterik, Loyens & Loeff
necessary that lenders to a company should be licensed, qualified or otherwise entitled to carry on business in the Netherlands by reason only of entering into a loan agreement or acting as agent or security agent and enforcing their rights thereunder. That said, bank financing provided for acquisitions of regulated targets must adhere to the applicable regulatory standards. This may include, among others, compliance with capital adequacy and leverage ratios, liquidity stand- ards and anti-money laundering and counter-ter- rorist financing regulations. Banks must conduct thorough due diligence on both the bidder and the target to assess financial stability (including the ability to meet its financial obligations under the financing agreement) and compliance with regulatory requirements and risks associated with the transaction. In addition, the finance documentation must comply with Dutch bank- ing regulations and parties must ensure that the financing structure aligns with legal require- ments. Finally, banks may be obliged to comply with regulatory reporting requirements imposed by banking regulators regarding their exposure to regulated targets and other counterparties. This may include reporting on credit exposure, risk concentrations, capital adequacy ratios and other relevant metrics to regulatory authorities. 9.2 Listed Targets The acquisition of listed companies is primar- ily governed by the Financial Supervision Act ( Wet op het financieel toezicht , Wft) and more specifically the Public Takeover Bid Decree ( Besluit openbare biedingen , Wft), which pro- vides detailed procedural rules on public bids. Listed companies in the Netherlands are subject to supervision by the AFM. According to the Public Takeover Bid Decree, the bidder is not allowed to make a bid for secu- rities listed on a regulated market in the Nether-
lands without first submitting an offer document to the AFM (or a comparable supervisory market authority in another EU/EEA Member State) and obtaining its approval. The bidder is required to publish “certain funds” announcement when the offer document is submitted to the AFM for approval. This announcement must provide a detailed explanation of how the bidder has secured the payment of the offer price. However, the AFM does not need to approve the certain funds announcement, nor is there a requirement to prove that the offeror has the necessary funds in place, by for example submitting a commit- ment letter to the AFM or providing evidence of third-party opinions. The protection lies in the fact that if the statement is false, the bidder can be sued (and in addition will jeopardise its repu- tation). In practice, evidence of certain funds is crucial in these transactions in order to secure the support of the target management. Lenders providing financing for the acquisition of listed targets must comply with the relevant regulatory requirements. 10. Jurisdiction-Specific Features 10.1 Other Acquisition Finance Issues Leakage Outside of the Obligor Group In the Netherlands, the following two situations could result into intra–group liabilities outside the banking group. • Fiscal unity – a Dutch obligor may be part of a fiscal unity for Dutch corporate income tax and/or VAT purposes (either as a parent or a subsidiary) if certain conditions are met, which may provide for certain benefits for several reasons. Generally, each fiscal unity member is and remains jointly and severally liable for taxes payable by the entire fiscal
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