CHILE Law and Practice Contributed by: Cristián Eyzaguirre Fontaine, Daniela Del Solar Nielsen and Gonzalo Eyzaguirre Alvarado, Eyzaguirre & Cía
4.2 Material Shareholding Disclosure Threshold Under Chilean law, any person or entity that directly or indirectly holds, or acquires, 10% or more of the subscribed capital of a publicly traded company must disclose to the Financial Market Commission ( Comisión para el Mer- cado Financiero , CMF) and the relevant stock exchanges any acquisition or sale of shares in such company. This obligation also applies to directors, managers, and certain key executives regardless of the number of shares they hold. Additional disclosure obligations may apply in the context of tender offers or when a change of control occurs. This includes the requirement that majority shareholders disclose whether their acquisitions are made with the intention of gain - ing control or for investment purposes. These rules aim to ensure market transparency and require timely reporting of share transactions by significant shareholders and company insiders to the CMF and stock exchanges, thereby pro - viding relevant information to other shareholders and the general public. 4.3 Hurdles to Stakebuilding Several important rulings by Chilean courts have strengthened the enforcement of foreign arbi - tration awards, aligning them with international standards. These decisions have increased legal certainty for cross-border mergers and acqui - sitions, promoting the inclusion of arbitration clauses and offering greater predictability in resolving disputes in international transactions. 4.4 Dealings in Derivatives Dealings in derivatives are permitted under Chil - ean law and may be used in connection with M&A transactions, including as part of a broader stakebuilding strategy. However, such transac - tions are subject to oversight by the Financial
requirements, mandatory tender offer thresh - olds, and protections for minority shareholders, all of which remain stable and unchanged. 4. Stakebuilding 4.1 Principal Stakebuilding Strategies It is not uncommon for a bidder to begin building a stake – by acquiring shares directly or indi - rectly – in the target company prior to launching a formal tender offer. This may allow the bidder to gain influence or position itself more favour - ably for the subsequent acquisition. In Chile, common stakebuilding strategies include the following. • Open market purchases: Buying shares of a publicly traded company through stock exchanges. Disclosure obligations are trig - gered under applicable securities regulations if certain thresholds are crossed. • Private negotiations or block trades: Acquir - ing significant shareholdings directly from large shareholders through privately negotiat - ed transactions, often involving confidentiality agreements and coordinated timing. • More sophisticated stakebuilding mecha - nisms (such as derivatives-based exposure or synthetic positions) commonly seen in other jurisdictions are not often used in Chile and may raise regulatory concerns. The timing, scale, and form of stakebuilding activities should be carefully reviewed from a regulatory and competition law perspective, particularly when the target is a publicly traded company or operates in a regulated industry.
431 CHAMBERS.COM
Powered by FlippingBook