GUINEA Law and Practice Contributed by: Yves Constant Amani, YAC & Partners
9.2 Directors’ Use of Defensive Measures
Another strategy involves capital restructuring, such as issuing new shares with preferential subscription rights for existing shareholders, as permitted under Article 822-10. This dilutes the hostile bidder’s stake and makes the acquisition less attractive. Companies may also implement golden shares or supermajority voting requirements, making it difficult for an acquirer to gain control. Addi - tionally, the board can use share buyback pro - grammes under Article 647, allowing the com - pany to repurchase up to 1% of its capital to reduce the bidder’s influence. While these defensive measures are legal, they must not violate shareholder rights or market fairness principles, as courts may invalidate any abusive tactics. 9.4 Directors’ Duties Directors enacting defensive measures against takeovers must act in good faith and prioritise the company’s best interests while ensuring compliance with corporate governance princi - ples. According to Article 330 of the AUSCGIE, direc - tors are personally liable for violations of statu - tory obligations, mismanagement or breaches of fiduciary duties. Defensive strategies must be used to protect the company and its shareholders, not to entrench management or unfairly restrict shareholder rights. Additionally, Article 822-10 requires that any modification of capital structure ‒ such as issu - ing new shares to deter a takeover ‒ must con - sider the interests of existing shareholders and ensure transparency. If defensive actions result
Under OHADA law, directors are allowed to implement defensive measures against hostile takeovers, provided they act in the best interests of the company and shareholders. While the AUSCGIe, does not explicitly list anti- takeover defences, it allows companies to adopt protective measures in their bylaws, such as shareholder rights plans, staggered boards and capital restructuring. Article 822-10 provides mechanisms for adjusting share rights and dis - tribution of reserves to protect existing share - holders. Additionally, Article 853-17 allows companies to include transfer restrictions on shares, which can be used to deter hostile acquisitions. However, directors must ensure that any defen - sive action complies with their fiduciary duties and does not unfairly discriminate against share - holders or violate market fairness principles. Courts may invalidate abusive measures if they are deemed to unfairly restrict shareholder rights or entrench management. 9.3 Common Defensive Measures Companies can adopt various defensive meas - ures to resist hostile takeovers, provided they comply with corporate governance principles and protect shareholder interests. One common defence is the restriction on share transfers, as allowed under Article 853-17 of the AUSCGIE, which permits companies to include clauses in their bylaws preventing the transfer of shares for up to ten years. Similarly, Article 853- 18 allows for a pre-approval mechanism where the company or shareholders must approve any share transfers.
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