INDONESIA Law and Practice Contributed by: Melissa Butarbutar, Ken Prasadtyo, Kevin Yehezkiel and Cindy Caroline, TnP Law Firm
6. Structuring 6.1 Length of Process for Acquisition/ Sale While the timeline depends on the scale of the deal and the conditions of the target compa - ny, the acquisition a company generally takes around three to six months to complete. This period includes the term sheet negotiation, the due diligence process, the fulfilment of pre- closing conditions and the closing. However, the timeline may vary for each deal, as certain indus - tries may have additional requirements during the pre-closing stages, which could extend the time before closing. The acquisition of a public company may take a longer period to complete, due to the mandatory tender offer requirement, which will be subject to a declaration of effectiveness issued by the OJK before formally launching the tender offer. 6.2 Mandatory Offer Threshold The mandatory tender offer threshold applies only to the acquisition of public companies, fol - lowing a change of control of those public com - panies. However, in a mandatory tender offer, the new controller is not required to purchase shares owned by: • shareholders who have jointly undertaken the acquisition with the new controller; • other parties that have secured an offer with the same terms and conditions from the new controller; • other parties that, at the same time as the new controller, are undertaking a mandatory tender offer or voluntary tender offer over the shares of such public company; • a principal shareholder (ie, a party that owns 20% or more shares in the public company); and
• disputes. Additionally, it is also common for the prospec - tive purchasers to conduct financial and tax due diligence. 5.4 Standstills or Exclusivity As there is no definitive rule for this, it is quite common for prospective purchasers to request an exclusivity period during the earlier stages of the deal (eg, during term sheet negotiations and the due diligence period). This exclusivity period typically lasts three to six months from the sign - ing of the term sheet. 5.5 Definitive Agreements It is not permissible for the terms and conditions of a tender offer to be documented in a definitive agreement. In the case of tender offers, OJK Regulation No. 54/POJK.04/2015 on Voluntary Tender Offers ( “OJK Regulation No. 54/2015” ) explicitly pro - hibits voluntary tender offers from being gov - erned by a definitive agreement given the regu - lation requires the prospective new controller to keep the proposed tender offer confidential from the target company and its affiliates until it is formally launched. That being said, the tender offeror can set conditions in the voluntary tender offer announcement, which will be subject to the OJK’s review and approval. On the other hand, mandatory tender offers are highly regulated under OJK Regulation No. 9/2018, and the OJK prohibits a mandatory tender offer from being subject to conditions. Therefore, it is not per - missible for the terms and conditions of manda - tory tender offers to be governed by a definitive agreement.
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