FRANCE Law and Practice Contributed by: Karl Hepp de Sevelinges, Nicolas Martin, Cyril Deniaud and Benjamin Cohu, Jeantet
However, disclosure can be delayed if an imme - diate disclosure to the market would prejudice the issuer’s legitimate interests, if confidentiality is effectively maintained and if such delay is not likely to mislead the public. In practice, disclosure is often made upon sign - ing of a binding agreement, such as a share pur - chase agreement (SPA) or a tender offer agree - ment. Where applicable, earlier disclosure may be required if there is a leak or abnormal market activity, in which case a press release must be issued without delay. From a practical standpoint, parties usually issue a press release when appropriate docu - mentation is signed. In transactions involving the information and consultation of the works council of the target company, the parties usu - ally also agree to issue an official press release upon execution of a put option granted by the bidder under which they inform the market that a binding offer to purchase the shares of the French entity has been granted by the bidder and that the works council of the French entity is currently being consulted about this offer. 5.2 Market Practice on Timing In France, market practice on the timing of dis - closure generally aligns with the legal require - ments set out under the EU Market Abuse Regu - lation (MAR) and the AMF General Regulation. As a general rule, disclosure of inside informa - tion must be made as soon as possible, unless a delay is justified and confidentiality can be preserved (Article 17 MAR). However, certain aspects remain open to inter - pretation, particularly regarding: • whether ongoing negotiations qualify as inside information. Case law has established
that this applies when the deal is sufficiently advanced with a reasonable chance of suc - cess; • the extent to which the proposed transaction may impact the price of the shares; and • whether delaying disclosure could harm the issuer’s interests or mislead the public, requir - ing immediate press release. In practice, issuers tend to disclose transactions at the moment a binding agreement is signed, such as a share purchase agreement (SPA) or a tender offer agreement, provided that no leak - age or abnormal market behaviour has occurred beforehand. Appropriate confidentiality safeguards, such as non-disclosure agreements, are put in place to ensure that discussions remain private until the deal reaches a formal stage. If a leak occurs or unusual trading activity is detected, a public dis - closure must be made immediately, in line with AMF guidance. 5.3 Scope of Due Diligence In negotiated business combinations in France, due diligence is a key step that allows the buyer to assess whether to proceed with the transac - tion and under what terms. Under French law, sellers are required to disclose any information that is decisive for the buyer’s consent and not otherwise known or accessible. In private deals, due diligence is particularly extensive due to the limited availability of pub - lic information. Buyers typically review legal, financial, tax, HR, commercial and operational matters, including corporate records, financial statements, key contracts, real estate, IP rights and employment issues.
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