ECUADOR Law and Practice Contributed by: María Celeste Alvarado, Jorge Sicouret Zea, Ángel Gaibor and Octavio Rosselli, Coronel & Pérez
6.11 Irrevocable Commitments In transactions involving non-listed companies, the terms and conditions, including commit - ments to tender or vote by the principal share - holders, could be agreed by the parties, but this is not common practice. If the transaction involves a listed company, the parties can also enter into pre-arrangement agreements provid - ed that such agreements do not include provi - sions tending to impede, obstruct or encumber the right of the shareholders of the target com - pany to accept competing offers. A copy of such pre-arrangement agreements shall be annexed to the offering circular. Once the bidder has decided to acquire the shares of the listed target company, it must simultaneously inform the target company, the Superintendence of Companies, Securities and Insurance, the Superintendence of Economic Competition and the stock exchanges of the terms and conditions of its tender offer. The bidder shall also issue a notice of publication indicating that the authorisation to carry on the tender offer will be requested from the Superin - tendence of Companies, Securities and Insur - ance within ten business days following the approval or non-objection of the Superintend - ence of Economic Competition. The disclosed information may be subject to changes and can - not be considered definitive. 7.2 Type of Disclosure Required 7. Disclosure 7.1 Making a Bid Public If the business combination is between unlisted companies and neither of the thresholds referred to in 4.2 Material Shareholding Disclosure Threshold are met, disclosure of the issuance of shares is not required. If the target company
is listed, then it must comply with the disclosure requirement set forth in 7.1 Making a Bid Pub- lic , but no separate or specific disclosure for the issuance of shares is required. 7.3 Producing Financial Statements For the purposes of filing a request for approval of a tender offer, the bidder shall provide the Superintendence of Companies, Securities and Insurance with a copy of its financial statements for the last three years. Financial statements must comply with the International Financial Reporting Standards (IFRS). 7.4 Transaction Documents The need to disclose the transaction docu - ments in full depends on whether the transac - tion exceeds the thresholds referred to in 2.4 Antitrust Regulations or involves listed compa - nies. In such cases, the final draft of the transac - tion documents must be submitted in full to the Superintendence of Economic Competition in order to obtain the corresponding authorisation. The primary duties of directors in a business combination are loyalty, due diligence, confi - dentiality, avoidance of conflicts of interest and non-competition. In the context of a merger or business combination, the duties of directors are owed to the company and its shareholders. 8.2 Special or Ad Hoc Committees The establishment by the Board of Directors of special or ad hoc committees and/or the deferral of certain matters to such committees must be contemplated in the company’s by-laws. Such committees are usually implemented to address complex matters that require time-consuming 8. Duties of Directors 8.1 Principal Directors’ Duties
624 CHAMBERS.COM
Powered by FlippingBook