COLOMBIA Law and Practice Contributed by: Jaime Trujillo, Andres Crump and Natalia Ponce de León, Baker McKenzie
6.2 Mandatory Offer Threshold Private Companies
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 majority shareholder vote (as opposed to a unanimous shareholder vote). Cash is usually preferred over shares as consid - eration in private companies. In a deal environ - ment or industry with high valuation uncertainty, some of the common tools used to bridge value gaps may be: • spinning-off disputed assets or defining the transaction’s perimeter more narrowly from the outset; or • in private company deals incorporating earn- outs or deferred payment mechanisms into acquisition agreements, assuring the acquir - ing party that the company will achieve cer - tain financial targets, while also providing the seller with potential additional compensation. These approaches can help align the interests of both parties and facilitate a smoother trans - action. Listed Companies 6.3 Consideration Private Companies Cash is the form of consideration that has been offered in most public tender offers. Shares in listed companies, bonds and debentures issued by the Colombian government or other sover - eign issuers (among other forms of securities) are acceptable, but at least 30% of the consid - eration must be offered in cash. 6.4 Common Conditions for a Takeover Offer Once a public tender offer is launched (ie, once the offer notice is published), it is irrevocable
There is no obligatory threshold for offers unless specified within a bidding process established by a particular seller. Listed Companies Public tender offers are mandatory in Colombia in the following scenarios: • 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
492 CHAMBERS.COM
Powered by FlippingBook