BARBADOS Law and Practice Contributed by: Debbie Fraser, Joanna M Austin, Makela Harrison-Yarde and Jael Smith, Fraser Law
shares within 30 days of the closing of the offer. This suggests that while financing conditions may be included, bidders must ensure they can secure the financing to complete the transaction within the required timeframe. 6.7 Types of Deal Security Measures A bidder in Barbados can seek protection mechanisms to secure its position in a trans - action, including lock-up agreements whereby the acquirer seeks certainty before launching an offer from key shareholders who vote in favour of the transaction. The regulatory framework in Barbados has not seen changes in recent years that have signifi - cantly impacted the length of interim periods. It must be noted, however, that the timeline may be impacted where regulatory approvals are required – for example, where the FTC has to review for reasons of competition. 6.8 Additional Governance Rights Additional governance rights are typically out - lined in shareholder agreements and may include securing the right to appoint a specified number of directors to the target’s board, which allows for oversight and participation in the decision- making process. Pre-emptive rights to maintain shareholding, tag-along rights or drag-along rights may also be negotiated for future sales. These rights ensure that the bidder maintains a level of oversight despite not having 100% ownership. 6.9 Voting by Proxy A shareholder who is entitled to vote at a meet - ing of shareholders may, by means of a proxy, appoint a proxy holder or one or more alternate proxy holders, none of whom need be share - holders, to attend and act at the meeting in the manner and to the extent authorised by the
proxy, and with the authority conferred by the proxy. The proxy appointment must be in writing and typically submitted before the meeting, as per the company’s by-laws or notice of meeting. 6.10 Squeeze-Out Mechanisms The use of a squeeze-out mechanism to buy shareholders that have not tendered following a successful tender offer is the subject of a lawsuit in the High Court of Barbados and is therefore now also the subject of judicial review. While Barbados does not have a statutory squeeze-out mechanism, Section 186 of the Companies Act provides that, if (within 120 days after the date of a regularly made takeover bid for all the shares of the offeree company) the bid is accepted by holders of 90% or more of the shares of any class of shares to which the take - over bid relates, other than shares held at the date of the takeover bid by or on behalf of the offeror or an affiliate or associate of the offeror, the offeror may acquire the shares held by the dissenting offerees. Minority shareholders may therefore be forced to sell under a compulsory acquisition process initiated by the bidder. 6.11 Irrevocable Commitments In Barbados, it is not unusual for bidders to seek irrevocable commitments from the princi - pal shareholders of the target company to ten - der their shares or vote in favour of a proposed transaction. These commitments help to provide certainty of the deal and are usually negotiated prior to the public announcement of a bid. Con - sequently, these negotiations are usually under - taken at the early stages of a transaction, espe - cially in friendly takeovers or mergers where the bidder wants to secure key shareholder support before proceeding with the launch of an offer.
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