ISRAEL Law and Practice Contributed by: Barak Platt, Micki Shapira and Moshe Pasker, Arnon, Tadmor-Levy
platform), which are regulated financial activities and require appropriate licensing in Israel. 4.5 Filing/Reporting Obligations Any interested party in a public company (ie, holders of 5% or more of shares or voting rights) is required, among other things, to disclose to the company its holdings in derivative securities, the value of which is derived from the value of the public company’s securities. Additionally, there are certain provisions set by the ISA regarding the disclosure of holdings in the shares of a public company that are subject to SWAP transactions, except for SWAP trans - actions that are solely for the purpose of acquir - ing financial exposure or do not result in crossing the mandatory reporting thresholds (such as the 5% threshold for interested parties). 4.6 Transparency Under Israeli law, in the context of a partial ten - der offer, the offeror must disclose: • any commitment to make another purchase of shares in the target company or a merger of the target company, within one year; • any intention to make another purchase of shares in the target company, within six months; and • any significant plans for the target company, such as delisting, changes to corporate poli - cies, capital changes or changes to the board or management. 5. Negotiation Phase 5.1 Requirement to Disclose a Deal Israeli securities law requires public companies to disclose any transaction that could materially impact the company or its stock price. For sig -
nificant asset acquisitions, disclosure is gener - ally required at multiple stages, namely: • when negotiations commence; • upon signing a preliminary agreement (LOI); and • upon executing the definitive purchase agree - ment. However, the company is allowed to delay report - ing on the negotiations prior to entering into the LOI, provided that no information about the deal has been publicly disclosed. Public companies that are dual listed on certain exchanges will be allowed to operate according to the reporting obligations of the exchanges they are traded on. 5.2 Market Practice on Timing Disclosure on a deal can be delayed if its sub - mission is likely to prevent the completion of the deal or significantly worsen the terms of the deal, provided that no information about the deal has been published in the media. Companies often tend to use this exception to postpone the dis - closure of negotiations they are conducting until they are close to signing a definitive agreement. 5.3 Scope of Due Diligence Buyers usually conduct business, accounting and legal due diligence. The scope of due dili - gence is determined according to the size and complexity of the deal. When it comes to the acquisition of a public company, the scope of due diligence is typically more limited compared to the acquisition of a private company, as most of the material information is already reported to the stock exchange as part of the public com - pany’s reporting obligations. 5.4 Standstills or Exclusivity A buyer negotiating the acquisition of a private company will usually receive exclusivity for a
932 CHAMBERS.COM
Powered by FlippingBook