CHILE Law and Practice Contributed by: Cristián Eyzaguirre Fontaine, Daniela Del Solar Nielsen and Gonzalo Eyzaguirre Alvarado, Eyzaguirre & Cía
• identification of representatives or advisors; and • any other information required by the Finan - cial Market Commission ( Comisión para el Mercado Financiero , CMF). Regarding thresholds for obtaining control, 50% plus one of all issued and outstanding shares of the target company is the threshold commonly used when the bidder aims to acquire simple majority control. This allows such a bidder to influence the board composition and key corpo - rate decisions at shareholder meetings. Howev - er, a higher threshold of 66.67% of such shares (control of at least two-thirds) may be preferred, as it enables the bidder to approve certain major strategic corporate changes without the need for minority shareholder approval. In the event that a shareholder acquires control of the target company through the acquisition of at least two-thirds of all issued and outstanding shares, an obligation is triggered for the con - trolling shareholder to make a tender offer for the remaining shares of the target company at a price no lower than the price that would apply to shareholders exercising their withdrawal rights. If the controlling shareholder fails to carry out such a tender offer within 30 days of acquir - ing the requisite percentage of shares, certain minority shareholders are entitled to tender their shares to the target company and withdraw from it, with the company being obligated to purchase their shares. 6.6 Requirement to Obtain Financing As noted in section 6.5 Minimum Acceptance Conditions , Chilean law requires that a tender offer prospectus include sufficient detail regard - ing the bidder’s financing arrangements and abil - ity to meet payment obligations. The prospectus for a tender offer must outline the mechanism
by which the bidder will finance the payment for the shares acquired under the offer. If loans or capital contributions are required for financing, the bidder must include sufficient information in the prospectus to demonstrate that the neces - sary funds will be effectively available. If the offer involves a securities exchange, the prospectus must provide details on how the bidder has acquired or will acquire the securities intended for the exchange. 6.7 Types of Deal Security Measures In Chile, deal security measures, such as match rights, exclusivity clauses, and non-solicitation provisions, are widely negotiated in private transactions pursuant to a merger or acquisition agreement. However, their feasibility or validity in tender offers are subject to the scrutiny of Chile’s Securities Market Act and may not be consistent with Chilean regulations. However, the Securities Market Act provides that, unless authorised by the Financial Market Commission ( Comisión para el Mercado Finan- ciero, CMF ), during the term of the tender offer, the target company may not: • acquire its own shares; • resolve to create affiliates; • dispose of assets representing more than 5% of its total assets; or • increase its leverage by more than 10% of total indebtedness immediately prior to the launching of the offer. Additionally, competing tender offers are regu - lated by law and may be launched by publishing the relevant notice no later than ten days before the expiration of the original offer.
436 CHAMBERS.COM
Powered by FlippingBook