FRANCE Law and Practice Contributed by: Karl Hepp de Sevelinges, Nicolas Martin, Cyril Deniaud and Benjamin Cohu, Jeantet
due diligence, negotiation of contractual docu - ments, consultation of the works council (CSE), and fulfilment of antitrust or foreign investment approvals where applicable. Labour law obligations, including CSE consulta - tion and employee information procedures under the Loi Hamon , can add several weeks to the timeline (see 2.5 Labour Law Regulations ). 6.2 Mandatory Offer Threshold In France, when a target company is listed on the regulated market of Euronext Paris, a manda - tory offer for the balance of the target’s shares and other equity securities that grant access to its share capital is triggered under two primary circumstances, as outlined in Article L.433-3 of the French Monetary and Financial Code: • when the bidder, acting alone or in concert, directly or indirectly crosses the threshold of 30% of the target’s shares or voting rights; and • when the bidder, already holding between 30% and 50% of the shares or voting rights, increases such holding by more than 1% within a period of less than 12 consecutive months. For calculating these thresholds, the same rules as those used for legal reporting obligations apply. However, shares underlying cash-settled derivative instruments or agreements with an economic effect similar to share ownership are not included in this calculation. See 4.2 Material Shareholding Disclosure Threshold (assimila- tion rules) and 4.4 Dealing in Derivatives . The AMF can grant exemptions to this mandato - ry tender offer requirement in specific situations. Exemptions may be granted in cases where the threshold crossing results from capital increases
aimed at rescuing a financially distressed com - pany or from corporate restructuring operations like mergers, demergers or contributions in kind, provided these operations are approved by the
target’s shareholders. 6.3 Consideration
In France, cash is predominantly used as con - sideration in acquisitions, whether public or pri - vate, although share contributions to listed or unlisted entities are also common. Public acquisitions tend to take the form of a cash acquisition (takeover bid or offre publique d’achat ), but the share exchange route also exists and is also sometimes used (exchange tender offer or offre publique d’échange ). The offers can also be mixed (cash and share exchange within the same offer) or alternative (cash or share exchange). It should be noted that a cash alternative must be proposed if the shares offered in the frame - work of an exchange tender offer are not liquid shares listed on an EU regulated market, or if the bidder, alone or in concert, has purchased more than 5% of the target’s shares or voting rights in cash within the last 12 months, in accordance with Article 231-8 of the AMF General Regula - tion. In addition, in the event of a squeeze-out following an exchange tender offer, French regu - lation requires the bidder to offer a cash alterna - tive to the minority shareholders. All shareholders must receive the same offer terms, and tender offer pricing rules must be fol - lowed. Specifically, in mandatory tender offers, the price must be at least equal to the highest price paid by the bidder or its concert parties for shares of the issuer in the preceding 12 months, as per Article 231-9 of the AMF General Regu - lation. Moreover, an independent expert must
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