BANGLADESH Law and Practice Contributed by: A B M Nasirud Doulah and Amina Khatoon, Doulah & Doulah
eral, once definitive agreements are executed, parties to such agreements undertake not to: • take any action other than in the ordinary course of business; • deal in any asset or contract beyond a pre- agreed pecuniary threshold; • effect any substantial change in the financials of the company; • do anything that would have a material adverse effect on the business of the com - pany; or • act in derogation of the obligations under - taken under the definitive agreements. 5.5 Definitive Agreements It is common for the parties to incorporate terms and conditions documented in a definitive agree - ment for M&A deals or tenders concerning non- listed companies and negotiated deals concern - ing listed companies. However, such definitive agreement has no scope of application in the case of purely open public offers. 6. Structuring 6.1 Length of Process for Acquisition/ Sale Non-Listed Companies The length of time for acquiring/selling a busi - ness depends on the type of transaction (an acquisition of shares or amalgamation), the scope of due diligence, negotiations, and regu - latory approvals (industry specific and/or com - petition-related). Listed Companies With regard to listed companies, with the gener - ic timeline as described below, a takeover bid may take 12-20 weeks from the date of defini - tive agreements if such acquisition deals with
post IPO locked shares belonging to sponsors or institutional investors or minimum maintenance of 30% shareholding by sponsors and directors as express BSEC approval is required in these cases. Purchase through exchange at market price The typical timetable for an offer is one to two weeks, as follows. • Once an irrevocable offer has been filed, together with the relevant documents, with a corresponding stockbroker or merchant bank, this notice will be circulated immediately. • The corresponding stockbroker or merchant bank will complete the purchase as per the offer and report to the regulator within a week of completion. The offer may be cancelled if there is no seller for the shares. Purchase through exchange at negotiated price The typical timetable of an offer is 12 weeks, as follows. • A detailed sale and purchase agreement is executed between the seller and the pur - chaser. • The seller gives an irrevocable sell order to the corresponding broker or merchant bank. • The broker freezes the shares and sends a confirmatory notice to the exchange. • The purchaser deposits 20% of the purchase price at the exchange by cheque (in cases where the consideration is non-cash consid - eration). • The exchange immediately circulates news of the transaction. • Once the news has been circulated, the bro - ker will complete the transaction. • On completion, the purchaser shall report to the regulator within a week.
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