BANGLADESH Law and Practice Contributed by: A B M Nasirud Doulah and Amina Khatoon, Doulah & Doulah
6.6 Requirement to Obtain Financing Small-scale transactions are primarily financed by equity, while larger transactions are financed by a mix of debt and equity. Non-Listed Companies While not mandatory, a business combination may be conditional on the bidder obtaining financing as long as the parties agree to such arrangement. Listed Companies There is no obligation for the acquirer to obtain financing for the public offer (at the market price or through a negotiated deal), however, the acquirer must ensure that firm financial arrangements for fulfilment of the obligations under the public offer are in place and suitable disclosures in this regard have been made in the public announcement. The broker firm is also responsible for ensuring that adequate funds have been provisioned. In an acquisition of shares off-exchange using non-cash considerations such as share swap, a valuation of the assets used as consideration must be conducted and 20% of the considera - tion is required to be deposited to the stock exchange as security, which is returned upon completion. However, for schemes requiring express approv - al from the BSEC, the bidder can propose a scheme that is conditional on it obtaining financ - ing by a predetermined deadline. If the BSEC approves the scheme, the public offer may be floated once such condition is fulfilled. The same approach is taken for the takeover of distressed companies as outlined in 9.1 Hostile Tender Offers .
• closing and closing-related actions; • post-closing obligations; • representations, warranties and covenants; • indemnities, particularly tax indemnities; • governing law and dispute resolution process; • non-compete restrictions; and • payment of costs and expenses. Listed Companies For public takeover offers, the only conditions mandated by regulation are: • disclosure by way of public disclosure through the exchange of the intention to pur - chase, which would include conditions of the purchase offer; and • irrevocable instruction to the broker or mer - chant bank to acquire shares up to the target limit at the market price. Common conditions for a takeover offer include a minimum level of acceptance. The acquirer is bound to disclose all such conditions for a takeover offer in the detailed public statement and letter of offer. 6.5 Minimum Acceptance Conditions There are no minimum acceptance conditions mandated by regulations. An open offer should be for at least 26% of the target company, which ensures that the acquirer acquires a simple majority in the company if all the shareholders who are made an offer accept the offer. However, in the case of a voluntary offer for a listed company, the acquirer would be required to acquire at least the number of shares that would entitle them to exercise 10% of the vot - ing rights in the target company.
192 CHAMBERS.COM
Powered by FlippingBook