IRELAND Law and Practice Contributed by: Leonora Malone, John Olden, John Darmody and Doreen Mescal, Addleshaw Goddard
They also have certain duties under other leg - islation; for example, under the Irish Takeover Panel Act 1997, directors are required to act in the interests of the company as a whole and must not deny the holders of securities the opportunity to decide on the merits of an offer. 8.2 Special or Ad Hoc Committees It is common for boards of directors to establish special or ad hoc committees in business com - binations, particularly where conflicts of interest arise. Directors have a fiduciary duty to avoid conflicts between their duties to the company and personal interests. When conflicts occur, the Takeover Rules require directors to disclose all relevant information and opinions to the board and its financial adviser. To manage these con - flicts, boards often create committees to handle specific aspects of the transaction and ensure compliance with necessary processes. 8.3 Business Judgement Rule Under Irish law, courts generally defer to the judgement of the board of directors in takeo - ver situations, applying a test to assess whether decisions were made in good faith and with the honest belief that they were in the best interests of the company. As long as directors comply with their fiduciary duties, courts are unlikely to interfere with business decisions made by the board. 8.4 Independent Outside Advice The Takeover Rules require directors of both the target and bidding companies to obtain inde - pendent expert advice, as they are responsible for all documents issued by their respective companies, including announcements, presen - tations and briefings. Typically, financial, legal and tax advisers are engaged at the early stages of a business com -
bination. Financial advisers ensure that the directors are informed of their obligations under the Takeover Rules and help guide compliance throughout the process. 8.5 Conflicts of Interest In Ireland, conflicts of interest involving direc - tors, managers, shareholders or advisers in the context of acquisitions have not been the sub - ject of significant judicial or regulatory scrutiny. In practice, the disclosure of the nature of the conflict by the relevant parties, combined with obtaining informed consent, is typically consid - ered sufficient to avoid a breach of duty. How - ever, the Takeover Panel and other regulatory bodies would intervene if there were any con - cerns regarding transparency or fairness in the process. Under Irish law, hostile takeovers are permitted and can occur when the target company’s board publicly advises shareholders to reject a bidder’s offer, thereby preventing a takeover. However, hostile takeovers are relatively uncommon in the Irish M&A market. The Takeover Rules place sig - nificant restrictions on the actions that a target company can take to frustrate or block an offer. Specifically, the target’s board is prohibited from taking defensive actions that could frustrate the offer unless these actions are approved by shareholders at a general meeting or with the consent of the Takeover Panel. This regulatory oversight ensures that the interests of share - holders are protected during a hostile bid. 9. Defensive Measures 9.1 Hostile Tender Offers
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