COLOMBIA Law and Practice Contributed by: Jaime Trujillo, Andres Crump and Natalia Ponce de León, Baker McKenzie
4.2 Material Shareholding Disclosure Threshold Disclosure Listed companies are required to disclose, as special or material information, the fact that a single person has become the beneficial owner of 5% or more of its voting shares. No express equivalent obligation exists for non- listed shareholders. In practice, shareholders who hold or intend to hold 5% or more of vot - ing shares (but less than 25%) avoid the dis - closure obligations by acting through two or more holding vehicles, none of which exceed the 5% threshold. Some consider such strategy an aggressive approach. If the holding vehicles are given discretion on how the shares are to be voted (pursuant to a mandate, a trust, a swap or otherwise) then the shareholder is not con - sidered to be the ultimate beneficial owner and thus no reporting obligations apply, even under the most conservative of approaches. Filing Obligations Public tender offers are mandatory when: • any person (or group of persons constituting the same beneficial owner) intends to acquire shares representing 25% or more of the vot - ing shares of a listed company; • any person (or group of persons constitut - ing the same beneficial owner) who already owns 25% or more of the voting shares of the relevant company, intends to acquire an additional 5% or more of the voting shares of a listed company; • any person (or group of persons constituting the same beneficial owner) has acquired vot - ing shares representing 25% (or representing more than 5% if the buyer already owns 25% or more) or more of a listed entity company as a result of a merger, in Colombia or abroad
(in which case an “ex- post” public tender offer must be launched within three months of the transaction, unless the buyer divests the relevant shares within three months of the merger); • any person (or group of persons constituting the same beneficial owner) holds more than 90% of the shares of the public company, if: (i) this threshold was reached by other means than a public tender offer for all of the shares in the company; and (ii) the minor - ity shareholders owning at least 1% of the voting shares of the target company request the launch of a public tender offer (in which case the public tender offer must be launched within three months of the date on which the 90% threshold was exceeded); or • the shareholders of the listed company decide to delist the company by a simple majority shareholder vote (as opposed to a unanimous shareholder vote). 4.3 Hurdles to Stakebuilding A listed company may not introduce higher or lower reporting thresholds to facilitate stake - building via articles of incorporation or by-laws. Stakebuilding is limited in Colombia by a com - bination of the following: • the concept of beneficial ownership: the “beneficial owner” of a share is defined as the person or group of persons that, directly or indirectly, as a result of a contract or other - wise, has decision-making capacity over such share – ie, the ability or power to vote the share in the election of the management of the company issuing the share or to direct or control such vote, as well as to sell or encum - ber the share; • the disclosure obligation triggered for the listed company when the same beneficial
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