DENMARK Law and Practice Contributed by: Morten Jensen, Elise Ross-Hansen, Frederik André Bork and Paula Grønlund, Bruun & Hjejle
ted a new executive order on takeover bids for public consultation. The executive order is pro - posed to enter into force on 1 July 2025, and contains clarifications and modernisations to the rules on pricing in mandatory bids and the publi - cation of public takeover bids as well as changes arising from the ESAP Regulation. At the time of this article’s submission, it is unclear what final form the executive order will take. 4. Stakebuilding 4.1 Principal Stakebuilding Strategies In respect of public takeovers, it is not uncom - mon for the bidder to have built up a stake in the target company prior to launching the offer. As long as the bidder is not in possession of inside information – which may be the case if the bidder has already been granted permission to carry out due diligence of the target – the bidder is free to buy shares and thereby increase its stake in the target. The bidder should be aware that in both a vol - untary and mandatory offer the bidder will be required to raise its offer price, if – during the offer period and up to six months after the expiry of this period – the bidder acquires shares in the target company at a higher price. In addition, the price offered in a mandatory offer must, at a minimum, correspond to the highest price paid by the bidder for shares in the target company during the six preceding months. This rule is sometimes exploited by bidders, who deliberately use stakebuilding (at market price) to trigger a mandatory offer, which can then be carried out without a premium. Following the completion of the offer, the bidder will not be required to complete another mandatory offer irrespective of the outcome of the takeover. If
the bidder had completed a voluntary offer and acquired between one third and 50% of the tar - get, the bidder would be required to complete a mandatory offer following the voluntary offer. 4.2 Material Shareholding Disclosure Threshold Any natural or legal person directly or indirectly holding shares in a listed company must notify the company and the FSA when their holding of shares reaches, exceeds or falls below 5%, 10%, 15%, 20%, 25%, one third, 50%, two thirds or 90% of the voting rights or share capi - tal of the company. However, this does not apply to an issuer directly or indirectly holding own shares, who instead must publish a notice to this effect when its holding of own shares reaches, exceeds or falls below 5% or 10% of the voting rights or share capital of the company. 4.3 Hurdles to Stakebuilding When building a stake in a target company, the bidder should consider the following aspects. • Approval from authorities – a stakebuilding shareholder will have to consider general and special statutory requirements for approvals by regulatory authorities, including merger control requirements when acquiring direct or indirect control with (parts of) the target company and requirements for approval by the Danish FSA of acquisition of a substantial ownership in a financial business. Control may be obtained by acquisition of a qualified minority position, where it is possible for the acquirer to exercise (de facto) control due to the spread of the shares. • Mandatory offer – if the bidder obtains, through stakebuilding, a controlling interest in the target company, an obligation to launch a
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