EGYPT Law and Practice Contributed by: Mohamed Hashish, Farida Rezk, Omar Aboul-Ella and Mariam Rabie, Soliman, Hashish & Partners
7.2 Type of Disclosure Required Disclosure to the FRA and EGX
shareholders representing a minimum of 100 shareholders representing no less than 2% of the free float shares, to request the FRA, within 12 months following the majority shareholder’s acquisition of shares in the target company, to oblige the majority shareholders to submit a mandatory tender offer for the minority shares. 6.11 Irrevocable Commitments Under Egyptian law, obtaining irrevocable com - mitments to tender or vote from principal share - holders of the target company during a public offer or acquisition is not explicitly regulated. However, such commitments may be secured in practice so long as this is within the framework of Egyptian laws. Before a bid is made public, the bidder may approach the target company to engage in negotiations, or to notify the target company of its intention to announce a public tender offer, or the bidder and the target company may sign a memorandum of understanding. Accordingly, the target company must immediately inform the FRA and EGX of the bidder’s intention to make the potential offer. Furthermore, the bidder is obligated to submit the necessary filing appli - cation with the FRA to launch the tender offer. Upon accepting the application from the bidder, the FRA must notify the EGX of the main terms contained in the application and the information memorandum. Upon such notification, the EGX shall post it on its screens. Accordingly, the bid is made public once posted on the screens of the EGX. 7. Disclosure 7.1 Making a Bid Public
In a public tender offer, the persons concerned with the potential tender offer are under obliga - tion to disclose the offer as follows: • (a) Disclosures by the bidder: The bidder shall immediately disclose to the FRA and EGX the potential tender offer on the occurrence of any of the following: (i) the bidder announces its intention to the target company, (ii) the fulfilment of the conditions of a manda - tory tender offer, (iii) submitting requests for approval from the competent authorities, and (iv) the spread of any rumours, speculation or unusual movement in the market indicating a potential offer. • (b) Disclosures by the target company: The target company shall disclose to the FRA and EGX the potential tender offer immediately upon (i) notification by the bidder of its inten - tion to make the purchase offer, (ii) signing a memorandum of understanding, a letter of intent, an agreement to conduct an exami - nation thereof, or any other binding or non- binding agreements or similar documents, or serious negotiations regarding a potential purchase offer, and (iii) a tangible impact on trading or the price of the shares of the target company as a result of the spread of specula - tion over a potential purchase offer. • (c) 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 the occurrence of any of the cases under (b) above, if there is an agreement between the shareholders and the bidder of which the target company was not notified.
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