FRANCE Law and Practice Contributed by: Karl Hepp de Sevelinges, Nicolas Martin, Cyril Deniaud and Benjamin Cohu, Jeantet
6.11 Irrevocable Commitments In the French M&A market, bidders often seek commitments from key shareholders to increase the likelihood of a successful tender offer. These commitments, which must be disclosed to the target, the AMF and the public, typically involve shareholders agreeing to tender their shares. However, the AMF and French case law empha - sise that irrevocable commitments should not undermine the principle of free competition between offers. As such, these commitments usually include provisions allowing shareholders to withdraw if a superior offer arises, ensuring a balance between deal security and shareholder interests. Negotiations for these commitments generally occur early in the process, providing the bidder with assurance and demonstrating strong sup - port for the transaction. These practices aim to enhance deal certainty while respecting regulatory principles and pro - tecting shareholder rights. In France, takeover bids are regulated by the AMF to ensure transparency. A bid is publicly announced when the bidder decides to proceed, if market rumours arise, or when certain owner - ship thresholds trigger a mandatory offer. The bidder must file a draft offer document with the AMF, which includes details on the offer’s terms, intentions and financing. This document is reviewed by the AMF and published on the bidder’s website, along with a press release summarising the main terms. 7. Disclosure 7.1 Making a Bid Public
commitments, pre-emption rights and rules for future share transfers. 6.9 Voting by Proxy In France, shareholders are allowed to vote by proxy in both private and public companies, a practice that is well-established and widely used, especially for large corporations with dispersed shareholder bases. This mechanism enables shareholders who cannot attend general meetings to participate in the decision-making process, ensuring their interests are represented. 6.10 Squeeze-Out Mechanisms In France, squeeze-out mechanisms enable a bidder to acquire 100% of a target company’s shares after a tender offer, provided it holds more than 90% of the share capital and voting rights, in accordance with Article L.433-4 of the French Monetary and Financial Code. There is no guaranteed method to achieve this threshold. The AMF clearance is not required if the squeeze- out price equals the tender offer price and either: (i) the offer followed the standard procedure by a bidder with less than 50% ownership; or (ii) a multi-criteria valuation and fairness opinion from an independent expert was provided during the tender offer. This valuation considers assets, profits, subsidiaries, business prospects and market price of the shares of the target. In other cases, AMF approval is needed to implement a squeeze-out procedure, requiring: (i) a multi-criteria valuation; (ii) a fairness opinion from an independent expert; and (iii) review of specific documentation. Securities granting access to share capital can also be squeezed out if the bidder holds 90% on a diluted basis. No similar procedure exists for non-listed companies.
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