BAHRAIN Law and Practice Contributed by: David Walker, Simone Del Nevo, Sherif Saadeldin and Rahul Sud, ASAR – Al Ruwayeh & Partners
6.3 Consideration Unless CBB consent has been obtained, a cash offer is required where the bidder has bought – for cash, during the offer period or within three months before its commencement – an interest in shares of any class under offer in the target carrying 10% or more of the voting rights of that class or if in the view of the CBB there are cir - cumstances that render such a course of action necessary. 6.4 Common Conditions for a Takeover Offer The TMA regulations prohibit an offer from being declared unconditional as to acceptances unless the bidder has acquired over 50% of the voting rights in the target. A bidder must squeeze out minority shareholdings if it holds or controls 90% or more of the target’s voting share capital within three months from the date of acquisition of the 90% stake. There would be no squeeze-out right or obligation for acquisitions of a stake below 90%. For joint stock companies, a merger must be approved by at least 75% of the shares present at the relevant extraordinary general meeting for both merging entities. With respect to limited lia - bility companies, a merger must be approved by the majority of the partners owning at least 75% of the company’s capital, unless the company’s deed of association requires a higher percent - age. With respect to listed joint stock companies or companies licensed by the CBB, the provi - sions of Central Bank Law No 64 of 2006 and its implementing regulations and rulebooks must be taken into consideration.
being prepared, acquisitions of other regulated businesses that are subject to prior regulatory approvals, including from the CBB, the Minis - try of Education, the Council for Regulating the Practice of Engineering Profession, etc, could be closed within five to 16 weeks. If the approval of the CPA is required, the transaction timeline may be extended for up to another 60 to 90 days. All takeover offers must be open for accept - ance for at least 15 days after becoming or being declared unconditional. The acceptance condition must be satisfied within 60 days from posting the offer document. All other conditions must be fulfilled within 15 days of the first clos - ing date or the date on which the offer becomes or is declared unconditional as to acceptances, whichever is later. A merger will typically imply a shorter timeframe for completion. Competing offers adopt the timetable of the new bidder. 6.2 Mandatory Offer Threshold In Bahrain, a mandatory offer is required when: • any person acquires 30% or more of the vot - ing rights of a company, whether by a series of transactions over a period of time or not; • two or more persons acting in concert collec - tively hold less than 30% of the voting rights of a company, and any one or more of them acquires voting rights that increase the hold - ing to 30% or more of the voting rights of the company; and • any person, alone or together with persons acting in concert, is interested in shares that in total carry not less than 30% of the voting rights of a company but does not hold shares carrying more than 50% of such voting rights, and such person, or any person acting in concert with them, acquires additional shares carrying more than 1% of the voting rights in any six-month period.
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