EGYPT Law and Practice Contributed by: Mohamed Hashish, Farida Rezk, Omar Aboul-Ella and Mariam Rabie, Soliman, Hashish & Partners
6.7 Types of Deal Security Measures Under Egyptian law, a bidder may seek certain deal security measures to protect its interests during the tender offer process. These measures may include conditions precedent in the tender offer, such as conditions relating to the achieve - ment of necessary regulatory approvals, includ - ing, inter alia, that of the ECA, FRA or EGX. 6.8 Additional Governance Rights The bidder may seek veto rights with respect to reserved matters as to be stipulated under the target company’s constitutional documents or convertible securities. Furthermore, the bidder may seek representation on the board of direc - tors of the company pursuant to the articles of association of the company. The constitutional documents may also include the right of first refusal with respect to disposal of shares in the target. 6.9 Voting by Proxy Under Egyptian law, shareholders are gener - ally allowed to vote by proxy during any gen - eral meetings of the company pursuant to the Companies Law, provided that such proxy is appointed by way of a formal written document or a power of attorney signed by the shareholder. However, it is worth noting that the shareholder may only appoint one proxy to represent them at the meeting. Furthermore, proxies may generally only exercise voting rights that are specifically granted to them by the shareholder as specifi - cally instructed in the written authorisation. 6.10 Squeeze-Out Mechanisms Egyptian law does not provide for a squeeze- out mechanism to majority shareholders; how - ever, the Capital Markets Law allows for minority shareholders owning 3% of the target compa - ny’s share capital or voting rights, or minority
• holds more than two-thirds but not more than three-quarters of the share capital or voting rights of the target company, and within 12 consecutive months, its ownership exceeds 5% above its existing stake; or • exceeds three-quarters of the share capital or voting rights of the target company at any given time. Furthermore, if the bidder seeks to continue list - ing the target company on the EGX, the bidder is required to submit a mandatory tender offer for 100% of the ordinary shares of the target company, subtracting 10% for the minimum free float shares required to remain listed on the EGX. However, if the bidder seeks to delist the target company from the EGX, the mandatory tender offer must cover 100% of the ordinary shares. 6.5 Minimum Acceptance Conditions Generally, the minimum acceptance threshold for a public tender offer is set to ensure that the bidder can secure control over the target com - pany while also protecting the interests of minor - ity shareholders. In that regard, the law does not provide a specific fixed percentage for the minimum acceptance condition for tender offers. However, the threshold is typically set at 51% of the target company’s shares as the minimum acceptance required, unless specified otherwise in the offer terms. Generally, the determination of the minimum acceptance threshold is left for the bidder to decide. 6.6 Requirement to Obtain Financing In a public tender offer, the bidder must sub - mit certain documents and information to the FRA and EGX, including, inter alia, a letter from an Egyptian bank confirming the availability of the bidder’s funds for the offer, and a memoran - dum which must contain, inter alia, information regarding the financing of the purchase offer.
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