BARBADOS Law and Practice Contributed by: Debbie Fraser, Joanna M Austin, Makela Harrison-Yarde and Jael Smith, Fraser Law
6.2 Mandatory Offer Threshold As indicated in 2.1 Acquiring a Company , in Barbados, where a person directly or indirectly acquires 25% or more of the equity of a com - pany (intended for a public company), that per - son must deliver – by registered mail – a written statement containing relevant information to be included in an offer to the shareholders, both to the FSC and to the company at its registered office or principal place of business within 24 hours of the acquisition. 6.3 Consideration Cash consideration is generally more common in Barbados as it relates to M&A transactions, as it provides immediate value to purchasers and cash transactions tend to be easier to structure from a regulatory standpoint. Furthermore, given that Barbados has a relatively small capital mar - ket, there is a higher possibility that shares of private companies are illiquid; as such, cash is more attractive for these types of transactions. 6.4 Common Conditions for a Takeover Offer In Barbados, pursuant to the regulations, a takeover bid must be made without conditions, except the condition that it may be withdrawn where: • a specified percentage of the shares that are outstanding and not already owned is not tendered; • a government or government agency moves to prevent it from proceeding or to alter the status of the offeree company materially; or • a natural disaster or the directors of the offeree company intervene between the mak - ing of the offer and the closing date to materi - ally change the value or nature of the offeree company.
6.5 Minimum Acceptance Conditions The offeror has the flexibility to add the condi - tion to its offer that completion is subject to the tender of a specified percentage of shares out - standing and not already owned. Where a bidder holds more than 50% of the voting shares, the bidder is allowed to pass an ordinary resolution at shareholder meetings that gives them control over corporate decisions, including the appoint - ment of directors. As it relates to the approval of special reso - lutions, which may include actions such as amendments to the articles of incorporation of the company, approval or mergers, a two-thirds majority is required. These percentages will pro - vide some guidance to a proposed offeror on the minimum acceptance condition that should be included in the offer if desired. As identified earlier, where the acquisition results in the control of 40% or more of a market for goods or services in Barbados, FTC approval will be required. 6.6 Requirement to Obtain Financing A business combination in Barbados can be conditional on the bidder obtaining financing; however, such conditions must be carefully structured to ensure compliance with regulatory requirements and market expectations. It must be noted that the Companies (Take-over Bid) Regulations, 2002 impose certain requirements that impact such conditions. Regulation 7(d) mandates that a takeover bid circular must disclose the method and timing of payment for the shares of the offeree company, which ensures transparency regarding financ - ing arrangements. Additionally, Regulation 18(4) requires that if the bidder elects to proceed with the offer, they must take up and pay for the
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