BARBADOS Law and Practice Contributed by: Debbie Fraser, Joanna M Austin, Makela Harrison-Yarde and Jael Smith, Fraser Law
takeover bids, hostile tender offers are likely to be permitted. 9.2 Directors’ Use of Defensive Measures Directors are permitted to use defensive meas - ures contingent upon their actions complying with their fiduciary duties to the company. A director’s main defensive measure is the use of the directors’ circular, which the directors of the offeree company are required to provide to the shareholders following the shareholders’ receipt of the takeover bid. In the circular, the directors are required to pro - vide the following, which can be used as defen - sive measures in hostile takeovers: • up-to-date information regarding the com - pany and the position of the directors; • recommendations to the shareholders regard - ing the acceptance of the takeover bid and reasons for their recommendations; • disclosure of the directors’ intended course of action; • a price range of the shares sought to be acquired; and • any information known by the directors per - taining to material changes in the prospects of the offeree company. Also, if the directors find a legal challenge regarding the takeover, they can seek a remedy through litigation to have the courts decide on the matter. Steps can also be pursued to protect the interests of certain key employees should the offer be successful. 9.3 Common Defensive Measures The offeree company’s defensive measures are typically the measures undertaken by directors through the directors’ circular and any contrac -
tual arrangements that can be pursued and disclosed prior to the completion of the offer. Please also see 9.2 Directors’ Use of Defensive Measures . 9.4 Directors’ Duties When enacting defensive measures, the direc - tors’ actions are subject to their fiduciary duties to the company. Please also see 8.1 Principal Directors’ Duties . 9.5 Directors’ Ability to “Just Say No” Directors are unable to mandate that the share - holders of the offeree company refuse to accept a takeover bid. Rather, the directors are required to circulate the director’s circular among the shareholders and perform their duties. Directors are permitted to recommend to the sharehold - ers as to whether the offer should be accepted. Please also see 9.2 Directors’ Use of Defensive Measures and 8.1 Principal Directors’ Duties . Litigation regarding M&A deals is not frequent in Barbados. The most recent M&A cases were Ansa McAl (Barbados) Limited (ANSA) v Banks Holdings Limited (BHL) and Slu Beverages Ltd BB 2016 CA 13 and Kenneth Went v Cable & Wireless BB 2018 HC 26. For details, please see 8.3 Business Judgment Rule . 10.2 Stage of Deal Actions in the Supreme Court of Barbados regarding takeovers have been brought after the offer for the takeover bid has been made and before the offer closes. 10. Litigation 10.1 Frequency of Litigation
214 CHAMBERS.COM
Powered by FlippingBook