CYPRUS Law and Practice Contributed by: Kyriacos Scordis, Sofia Tryfonos Avraam and Anna Borovska, Scordis, Papapetrou & Co LLC
of commercial sense with respect to the particu - lar transaction as to whether to enter into a bind - ing or non-binding MOU or definitive agreement at the stage of making an offer. 6. Structuring 6.1 Length of Process for Acquisition/ Sale The acquisition process can vary from transac - tion to transaction, depending on the complexity of the deal and the businesses involved. There is no specific timetable nor any time restrictions, especially when it involves private companies. Public companies’ acquisitions, however, are given a time-guideline concerning the period of acquiring or selling a company, deriving from the Takeover Bids Law 2007. Public companies that have been presented with a public takeover offer generally require at least four to six months, subject to such an offer composed of cash con - sideration and conditional to any applicable squeeze-out provisions. In addition, the implementation of Regulation (EU) No 910/2014 on electronic identification and trust services for electronic transactions in the internal market (the “Electronic Identifica - tion Regulation” ), which was incorporated into Cypriot law as the Electronic Identification and Trust Services for Electronic Transactions in the Internal Market Law 55(I)/2018 (the “Electronic Identification Law” ), has facilitated the applica - tion and acceptance of electronic signatures at a time when remote-working and restrictions in movement were mandated. 6.2 Mandatory Offer Threshold Private companies in Cyprus do not have any mandatory offer threshold. According to the
provisions of the Takeover Bids Law, the pro - posed consideration for the acquisition of a public company must be at least equivalent to the highest price paid or agreed to be paid for the respective securities by the bidder or by the persons acting on behalf of the bidder, during the 12 months prior to announcing the bid (the “Equitable Price” ). In the circumstance where a bid is voluntary, CySEC may allow for a lower bid price, something which is entirely discretionary. 6.3 Consideration Consideration in M&A transactions can be either in the form of cash, in kind, or both. Private com - panies are free to decide on the type of consid - eration, during negotiations. In contrast to that, the Takeover Bids Law states that a bidder can offer cash, shares or a combination of both. If, however, the bid involves cash consideration, the offer must be accompanied by a bank guar - antee from a credit institution that the funds are and will remain available until the expiration of the bid. The law explicitly provides for situations when the bidder must provide cash alternatives as part of the consideration offered by the bid - der. For example: • when the consideration offered does not include any liquid securities admitted to trad - ing on a regulated market; • when a bidder has acquired shares in the tar - get company within the last 12 months prior to the declaration that a public offer has been made, which amounts to 5% or more of the voting rights of the company; and • when a bidder is exercising “squeeze-out” and “sell-out” right, or in the case of “manda- tory offer” . In the case of public companies, shares cannot be issued below nominal value.
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