EGYPT Law and Practice Contributed by: Mohamed Hashish, Farida Rezk, Omar Aboul-Ella and Mariam Rabie, Soliman, Hashish & Partners
company as a result of the spread of specula - tion over a potential purchase offer. • (b) Disclosure by the shareholders of the target company: Upon being notified by the bidder of its intention to submit the purchase offer, the shareholders of the target company owning more than one-third of the target company’s share capital shall immediately disclose to the FRA in any of the cases under (a) above, if there is an agreement between the shareholders and the bidder of which the target company was not notified. On the other hand, the law does not require any public announcement with respect to shares that are not publicly listed. However, public announcement of a transaction may be required in cases such as, inter alia, the ECA’s announce - ment of an economic concentration to allow third parties to submit their views on the said transaction. 5.2 Market Practice on Timing The failure to abide by the legally stipulated time limits of the disclosure or reporting requirements of tender offers may lead to the invalidity of the tender offer. Therefore, the disclosure obliga - tions must be fulfilled within the legally pre - scribed timeline. 5.3 Scope of Due Diligence As a general rule under the Civil Code, the seller is not answerable for any defects of which the purchaser was aware at the time of the sale or any defects that could have been discovered by the purchaser by examining the subject of the sale with the care of a reasonable person, unless the purchaser proves that the seller affirmed the absence of those defects. There is no typical scope of due diligence in Egypt as it depends on the level that the buyer
is willing to conduct. However, conducting full due diligence is usually recommended in order to be in line with the general rule outlined above, including financial and legal due diligence. Buy - ers can rely on due diligence reports produced by the sellers if the sellers conduct the due dili - gence with the care of a reasonable person. 5.4 Standstills or Exclusivity Generally, the use of standstills and exclusivity agreements in Egypt is not explicitly regulated. However, such agreements may be used to pro - vide a certain level of assurance for the parties involved. However, it is worth noting that in all cases such agreements must be in compliance with the applicable laws in Egypt, the relevant disclosure and transparency obligations under Egyptian laws and the company’s constitutional documents, which may restrict such actions. 5.5 Definitive Agreements As a general rule, a contract is created, subject to any special formalities that may be required by law for its conclusion, from the moment that two persons have exchanged two concordant inten - tions. Note that an intention may be declared verbally, in writing, by signs in general use, and also by such conduct as, in the circumstances of the case, leaves no doubt as to its true meaning. A declaration of intention may be implied when neither the law nor the parties require it to be expressed. Generally, pursuant to the Civil Code, the con - tract is the law of the contracting parties, and it may not be revoked or modified except by agreement of the two parties, or for reasons determined by law. In all cases, the definitive agreement must com - ply with Egyptian laws.
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