ARGENTINA Law and Practice Contributed by: Agustin Ferrari and Astrid Nottebohm, Naveira, Truffat, Martínez, Ferrari & Mallo Abogados
6. Structuring 6.1 Length of Process for Acquisition/ Sale The length of the process will be determined by the scope of the due diligence, type of transac - tion, industry and corporate form. An acquisition of the total shareholding of a company that is not subject to the public offering regime and that does not present major compli - cations can take between three and nine months. Usually, the due diligence report is ready within the first three months. The remaining timing will depend upon the ability of the parties to reach an agreement. However, if the transaction involves a financial institution or a regulated entity, approval by the various regulators will be required, and this could extend the deal process. In the case of having to agree on a joint venture and the partial sale of the shareholding package, the need to regulate the relations between the parties and the operation of the business will necessarily take longer. 6.2 Mandatory Offer Threshold For listed companies, public tender offers apply in the following scenarios. (a) Acquiring control – a party must launch a tender offer to acquire 100% of a target company’s shares when, either directly or indirectly and in a single transaction or through successive transactions within a 90-day period, the party intends to gain control of the company, ie, acquir - ing control over 50% of the votes of the company or being capable of controlling
contractual, corporate, anti-corruption and regu - latory risks are essential to any type of due dili - gence report. In recent years, environmental risk has seen a more detailed and in-depth analysis. 5.4 Standstills or Exclusivity Exclusivity agreements on “no-shop” clauses are frequently demanded by buyers and typi - cally included in confidentiality agreements and letters of intent at a very early stage in an acqui - sition process to give potential buyers time to conduct due diligence and negotiate definitive agreements with the sellers without any compe - tition from other potential buyers. Standstill agreements, on the other hand, are less frequent in the domestic M&A market, since acquisition of public companies is very mod - est due to scarce foreign direct investment in Argentina. Standstill agreements typically seek to prevent pressure from activist investors or aggressive bidders pursuing hostile takeovers by preventing such actors/potential buyers from accumulating shares in the target, or voting such shares in specific manners, for a period of time extending even after the deal has failed (to block vulnerabilities raised during due diligence). 5.5 Definitive Agreements Tender-offer terms and conditions for shares in companies subject to the public offer regime must be set down in a prospectus. The prospec - tus must include all documentation required by applicable regulations so that the potential seller can make an informed decision.
46
CHAMBERS.COM
Powered by FlippingBook