BANGLADESH Law and Practice Contributed by: A B M Nasirud Doulah and Amina Khatoon, Doulah & Doulah
9.3 Common Defensive Measures As stated in 9.2 Directors’ Use of Defensive Measures , there are no common defensive measures available to the board of a listed com - pany. One possible strategy could be to con - vince the sponsors and directors with frozen shares not to sell their shares and find a friendly new investor. 9.4 Directors’ Duties As stated in 9.3 Common Defensive Measures , available defensive measures are very limited. Nonetheless, as per 8.1 Principal Directors’ Duties the board of directors of the target com - pany is required to ensure the running of the business in its ordinary course, and that there is no disposal of material assets or change in capi - tal structure, etc, when a takeover offer is open. Also, directors must not cause the company to enter into any contract which such directors rea - sonably believe that the company would not be able to fulfil. 9.5 Directors’ Ability to “Just Say No” As stated in 9.2 Directors’ Use of Defensive Measures , while directors of non-listed private companies may hold certain rights unless other - wise pre-agreed by the shareholders, there is no such defensive measure available to the board of a listed company.
listed distressed businesses. Distressed busi - nesses have been defined as those companies which: • are financially weak; • have a negative net worth; • have a share price below face value for three continuous years; • have not paid any dividends for five years; or • any other company so listed by the BSEC. For such bail out takeover mandated for acquisi - tion of listed distressed businesses share may be purchased in cash, swapped or a mix of these can be adopted. The bailout scheme is publicly announced in a newspaper by a financier, including provisions for future corporate governance frameworks. Thereafter the financier (or the lead institution in the case of a consortium) needs to evaluate the share purchase tenders to select an appropri - ate offer or, in case of a purchase from exist - ing shareholders, negotiate a purchase price to implement the scheme. A bailout takeover may be exempted from cer - tain substantial share acquisition requirements, such as the mandatory purchase of shares through the exchange for cash considerations. 9.2 Directors’ Use of Defensive Measures While there are limited defences available to non-listed companies as stated in 8.3 Business Judgement Rule , no defences are available for listed companies. As soon as a consortium acquires a shareholding of 75% or more in the target, it can control the board.
10. Litigation 10.1 Frequency of Litigation
In general, litigation is not very common among parties in connection with M&A deals in Bang - ladesh. However, there have been frequent actions brought by employees in connection to M&A deals regarding the provision of employ - ment-related benefits to which such employees are entitled.
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