BELGIUM Law and Practice Contributed by: Michel Bonne, Hannelore Matthys and Virginie Lescot, Van Bael & Bellis
a person, as a result of its own acquisition, or the acquisition by persons acting in concert with it, holds directly or indirectly more than 30% of the securities with voting rights in a Belgian com - pany (i) whose securities are admitted to trading on a regulated market, or (ii) more than 50% of whose securities are admitted to trading on MTF Alternext or the Free Market of Brussels and no securities are admitted to trading on a regulated market. However, in certain exceptional circumstances, a mandatory bid is not required when the 30% threshold is exceeded. For example, within the context of a voluntary takeover bid, a transfer between affiliated companies, or a share capital increase with preferential subscription rights. In addition, the obligation to launch a mandatory offer does not apply where a third party con - trols the target or owns a larger stake than the person(s) acquiring 30% of the voting rights securities. This exception will no longer apply when, within a period of three years after the acquisition, the entity or person that initially exceeded the 30% threshold obtains the largest stake or control following a subsequent acquisi - tion. An exception also applies when the threshold is temporarily exceeded by a maximum of 2%, provided that the buyer (i) sells the excess within 12 months, and (ii) does not exercise its voting power relating to the excess. In relation to squeeze-out thresholds, see 6.10 Squeeze-Out Mechanisms . 6.3 Consideration In principle and subject to certain exceptions, consideration offered within the framework of both private and public acquisitions can consist of cash, securities, or a combination of both.
Consideration in cash is almost exclusively used for both private and public M&A transactions in Belgium. Exchange bids are extremely rare on the Belgian market, and are more common in private M&A transactions. In the case of manda - tory takeover bids, a cash alternative must, in some circumstances, be offered to the security holders. If the consideration offered by the bid - der does not consist of liquid securities listed on a regulated market or if the bidder, alone or acting in concert, has acquired securities of the target in cash during the 12 months prior to the announcement of the bid or during the offer period, the bidder must foresee a consideration in cash as an alternative. The most common tool used to bridge value gaps is an earn-out mechanism. Furthermore, warranty and indemnity insurance is now more frequently used to bridge more general negotia - tion gaps, including to resolve valuation discus - sions on certain issues. 6.4 Common Conditions for a Takeover Offer A mandatory takeover bid must be uncondition - al, whereas a voluntary takeover bid can be sub - ject to certain specific conditions, which need to be pre-approved by the FSMA. If the conditions of the voluntary takeover bid are not met, the bidder may modify the offer or notify the FSMA of an intention to withdraw the offer. An offer may, for instance, be subject to: • a minimum acceptance threshold to ensure that the bidder can control the target compa - ny after the bidding process (eg, the obtaining of 60% of the shares); • the non-occurrence of an event beyond the bidder’s control; or
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