COLOMBIA Law and Practice Contributed by: Jaime Trujillo, Andres Crump and Natalia Ponce de León, Baker McKenzie
3.2 Significant Changes to Takeover Law There have been no significant changes to takeover law in the past 12 months. A change occurred in 2024, to add an additional item in the list of events exempt from the obligation to launch a public tender offer. Note, however, that this regulation was tailor-made to facilitate a particular transaction, the Gilinski public tender offers, so this particular regulation has not been used in any other transaction. The weaknesses highlighted by the Gilinski pub - lic tender offers has prompted certain important listed companies, such as Bancolombia and Argos, to take matters into their own hands by amending their by-laws to shield themselves against future takeovers. The changes are aimed at: (i) expanding the cases where public tender offers are required; (ii) regulating how public ten - der offers should be priced; and (iii) regulating the effects of subsequent public tender offers, allowing shareholders who sell early to benefit from prices paid later in the process. However, opinions on the enforceability of these amendments are divided. 4. Stakebuilding 4.1 Principal Stakebuilding Strategies Stakebuilding prior to launching non-solicited offers is uncommon, because hostile tender offers themselves are uncommon. Still, bidders are allowed to acquire shares directly in the open market up to an amount that is less than 25% of the voting shares of a given target before having to launch a public tender offer.
Sandbagging In the absence of a specific provision to the con - trary (pro-sandbagging), a buyer cannot claim for damages arising from circumstances it was aware of before closing a transaction. Representations and Warranties Representations and warranties are alien to Colombian law and are thus difficult to under - stand within the framework of obligations under civil law, which categorises them as obligations to give, to act, or to refrain from acting ( dar, hacer y no hacer ). However, representations and war - ranties should be given legal effect and viewed as statements of facts which, if untrue or inac - curate, may lead to indemnification as specified in the acquisition agreement. Nevertheless, if the agreement lacks an indem - nity clause or specific consequences for mis - representations, a misrepresentation could lead to the termination of the agreement or reduction of the purchase price. This can be sought by claiming hidden defects ( vicios ocultos ) under the agreement, or by claiming losses resulting from the breach of the agreement or failure to meet disclosure duties. Claims Process The parties are free to establish the process to institute claims in share-purchase agreements and, if such process is not followed, this may result in the loss of the right to claim. This ruling aligns with the principle that, accord - ing to Colombian law, the agreement itself sets out the rules that govern the relationship between the parties ( autonomía de la voluntad privada ).
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