ITALY Law and Practice Contributed by: Roberto Bonsignore, Paolo Rainelli, Gerolamo da Passano and Nicole B. Puppieni, Cleary Gottlieb Steen & Hamilton LLP
(a) if the exchange offer is an MTO, the bid - der must also provide a cash alternative to target shareholders; and (b) if the exchange offer is voluntary, the bid - der would not be exempt from the sub - sequent obligation to launch an MTO if it surpasses an MTO threshold during the voluntary offer. • Core shareholders of the bidder may resist dilution caused by new shares issued as consideration. Bridging the Value Gap Between Buyer and Seller Various tools are employed in private acquisi - tions to bridge value gaps between the parties, including: • a partial rollover by the seller in the buyer’s shares, allowing the seller to share in any future value appreciation of the buyer’s group; • earn-out mechanisms, where a portion of the purchase price is contingent upon the target’s future performance; • pre-closing carve-outs, where specific busi - nesses or parts of the target group are sold separately if undervalued by the buyer; • vendor loans or deferred payment terms; and • asset swap transactions. While these instruments are, in principle, also available in public M&A transactions, they are less common in this context (except, probably, the rollover route), as they may introduce a num - ber of complexities. 6.4 Common Conditions for a Takeover Offer Voluntary takeover bids are irrevocable but may include conditions that must be satisfied in order for the bid to complete. These conditions can -
not be dependent on the bidder’s will. Common conditions include: • minimum acceptance threshold – the bid may be contingent upon a minimum percentage of shares being tendered by target shareholders (see 6.5 Minimum Acceptance Conditions ); • regulatory approvals – the bid may require approval from regulatory authorities, such as merger control, FSR, FDI or sector-specific regulatory approvals; and • absence of adverse events – conditions may include the absence of: (a) a material adverse effect; (b) actions by the target outside the ordinary course; (c) defensive actions by the target; or (d) decisions by government authorities pro - hibiting or complicating the transaction. These conditions can typically be waived by the bidder, except for certain mandatory regulatory approvals. Mandatory tender offers may not include any conditions. 6.5 Minimum Acceptance Conditions The most common minimum acceptance condi - tions used in voluntary tender offers depend on the bidder’s intentions. Acquiring Control of the Company • 50% + 1 of the voting shares gives the bidder mathematical certainty of controlling ordinary shareholder resolutions (eg, approval of the annual accounts and dividend distributions, and appointment of the board of directors). • Two thirds of the voting shares gives the bid - der mathematical certainty of controlling not only ordinary shareholder resolutions but also extraordinary shareholder resolutions (eg,
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