BANGLADESH Law and Practice Contributed by: A B M Nasirud Doulah and Amina Khatoon, Doulah & Doulah
• If applicable, upon completion, the cheque, as stated above, will be returned to the pur - chaser. 6.2 Mandatory Offer Threshold The BSEC has discontinued mandatory takeo - vers in its latest enactment of Bangladesh Secu - rities and Exchange Commission (Substantial Acquisition of Shares and Takeovers) Rules, 2018 and, accordingly, there is no mandatory offer threshold at present. 6.3 Consideration Non-Listed Companies There are no restrictions on the consideration for general acquisitions and issuance of shares of a target. However, all transfers involving foreign shareholders must take place at a fair price determined by a valuation by a chartered accountant/merchant bank. For foreign sellers, up to BDT10 million in sale proceeds may be repatriated without valuation and up to BDT100 million in sale proceeds may be repatriated by the bank based on a valuation by a chartered accountant/merchant bank without central bank approval. Prior approval must be sought from the central bank for repatriable sale proceeds over BDT100 million. In situations involving local shareholder to foreign buyer transfers and for - eign seller to foreign buyer transfers, a simple post-closing notification to the central bank along with the valuation report is sufficient. The fair market valuation must be conducted by an accredited chartered accountant or a licensed bank, following an approximate mix of the following valuation approaches: • the asset-based approach; • the market value approach; and • the income approach.
However, such valuation is exempted for repat - riating the sale proceeds if the fair value of the shares is determined on the basis of the net asset value (NAV) approach, based on the lat - est audited financial statements together with tax returns (excluding intangible assets). In such circumstances, an undertaking is issued by the target company confirming that the asset impair - ments have been accounted for in the NAV; and the remitting bank is satisfied that there is no abnormal growth in the total assets in any of the last three years, particularly in the last year. Listed Companies For listed companies, consideration is based on the following. • Purchase through exchange at market price: as per the market price. • Purchase through exchange at a negotiated price: the regulation has not imposed any valuation method for this method. However, in the case of an acquisition of shares subject to BSEC approval, as stated in 4.3 Hurdles to Stakebuilding , the BSEC often seeks the basis of the consideration and may require a valuation certificate. 6.4 Common Conditions for a Takeover Offer Non-Listed Companies There are no conditions that are mandated by regulations. The main substantive clauses in an acquisition agreement include: • purchase considerations and modality of pay - ment; • interim adjustment, hold-back and escrow arrangement; • conditions precedent to the acquisition; • conditions subsequent to the acquisition, including perfection;
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