BELGIUM Law and Practice Contributed by: Michel Bonne, Hannelore Matthys and Virginie Lescot, Van Bael & Bellis
6.8 Additional Governance Rights Where a bidder does not seek to acquire 100% ownership of a target company, it may choose to strengthen its governance rights by entering, for instance, into a shareholders’ agreement with the remaining principal shareholder(s) of the target. Shareholders’ agreements will typically include clauses regarding governance at the level of the board of directors and the sharehold - ers’ meeting (including quorum, majority and/or voting requirements, or providing veto rights for certain essential decisions). They also typically include share transfer restrictions (pre-emption rights, tag-along rights, drag-along rights, call and put options). For listed companies, a shareholders’ agreement concluded between shareholders may qualify as a concerted action within the meaning of Bel - gian takeover legislation, and therefore trigger the obligation to launch a mandatory takeover offer if the mandatory offer threshold of 30% would be met. 6.9 Voting by Proxy Shareholders may vote by proxy. The share - holder may specify precise voting instructions or leave the voting up to the discretion of the proxyholder. The articles of association may not suppress a shareholder’s right to appoint a proxyholder, but it is possible to modulate this right (eg, a proxy can only be granted to other shareholders, and only one proxy per sharehold - er). Furthermore, the articles of association may impose a registration procedure on shareholders represented by proxy. This will, in particular, be the case for listed companies. In addition, and driven by the need for more flexibility for remote participation and voting at shareholders’ meetings during the COVID-19 crisis, the law of 20 December 2020 introduced
more flexible rules to the BCAC for companies that wish to organise their shareholders’ meet - ings virtually. Such virtual shareholders’ meet - ings are still subject to certain conditions on security and identity verification and simultane - ous participation. 6.10 Squeeze-Out Mechanisms Within the framework of a takeover bid, if the bidder holds, directly or indirectly, at least 95% of the share capital conferring voting rights and 95% of the voting securities in the target as a result of the tender offer (and provided that the bidder acquired 90% of the share capital confer - ring voting rights of the target in the course of the bid), the bidder can squeeze out the remain - ing security holders under the same conditions as the initial bid. The bidder must reopen the bid within three months as from the closing of the acceptance period. The offer period must be a minimum of 15 business days, during which the remaining minority security holders may com - municate any objections to the FSMA. Any secu - rities not tendered to the reopened bid are con - sidered transferred to the bidder by operation of law. On the other hand, under these circum - stances, the remaining securities holders also have a sell-out right following a public takeover bid. Furthermore, the BCAC also provides for a squeeze-out mechanism outside the framework of a public takeover bid. The securities holders of listed limited liability companies which, acting alone or in concert, hold 95% of the securities conferring voting rights are, subject to certain conditions, entitled to require that all the remain - ing minority security holders sell their securities at an equitable price. The securities not offered at the end of the acceptance period of the offer are transferred automatically to the offeror.
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