CAYMAN ISLANDS Law and Practice Contributed by: Shari Seymour, Kerry Ann Phillips and Michael Lockwood, Maples Group
5.4 Standstills or Exclusivity Standstill agreements and exclusivity agree - ments are not common for Cayman Islands M&A transactions. Due to the cross-border nature of Cayman Islands M&A transactions, deal documents (including standstill agreements and exclusivity agreements, if used) are negotiated onshore and It is permissible for tender offer terms and con - ditions to be documented in a definitive agree - ment. Due to the cross-border nature of Cayman Islands M&A transactions, tender offer docu - ments (if used) are negotiated onshore and gov - erned by onshore laws. governed by onshore laws. 5.5 Definitive Agreements 6. Structuring 6.1 Length of Process for Acquisition/ Sale There is no standard length of time for acquiring/ selling a business in the Cayman Islands – the time will vary depending upon common factors/ procedures, including available financing, due diligence and (if necessary) regulatory approv - als. Governmental measures in the Cayman Islands have not created major practical delays or impediments to the deal-closing process. 6.2 Mandatory Offer Threshold There is no mandatory offer threshold in the Cay - man Islands. In relation to CSX-listed target companies, unless the Council Executive Rules of the CSX provide otherwise, the following persons are
mandatory offer under the Code; see 6.2 Mandatory Offer Threshold . Cayman Islands entities listed on foreign stock exchanges may also be subject to additional disclosure and reporting obligations under the applicable listing rules. 5.2 Market Practice on Timing There is no general market practice regarding the timing of disclosure of M&A deals; see 5.1 There is no standard set of due diligence require - ments in the Cayman Islands in a negotiated business combination or other M&A transaction. The due diligence requirements vary from deal to deal, based on the requirements of the relevant parties involved in the transaction. Generally speaking, the basic due diligence con - sists of a review of: • the constitutional documents of the company; • the statutory registers (register of directors and officers, register of members, register of mortgages and charges and, if applicable, the beneficial ownership register); and • all material contracts and licences. Requirement to Disclose a Deal . 5.3 Scope of Due Diligence A search of the court registers in the Cayman Islands may also be performed and will disclose any Originating Process pending before the Grand Court of the Cayman Islands in which the target is identified as a defendant or respondent. The due diligence process is a collaborative effort, as most Cayman Islands M&A activity is cross-border.
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