Are hostile acquisitions a common feature?
Mergers & Acquisitions (2nd edition)
In Hong Kong, hostile takeovers of an Offshore Listing Vehicle are relatively rare as the percentage of issued share capital in public hands is not significant. Controlling shareholder blocks are therefore often in a position to block any attempted takeover.
Since the number of stock corporations listed on the stock exchange is limited in Austria and only a limited number of shares is held publicly, hostile acquisitions occur very seldomly in Austria.
Hostile acquisitions are not common in the UK market. Bids that start out hostile quite often end up becoming a recommended bid but there have been hostile bids that have continued as such.
Schemes of arrangement, because they require the cooperation of the target company are not commenced on a hostile basis.
Hostile acquisitions are not common in Bulgaria. Although the law does not forbid the practice, the make-up of the shareholding in public companies, which predominantly includes a majority shareholder with over 50% of the voting rights, makes a hostile bid rather unlikely. This is because a majority shareholder would most likely have appointed most of the members to the company’s board of directors, which renders the board’s opposition to a bid highly unlikely.
There are several means to effect a hostile acquisition of a private company. Equity dilution, as a form of a hostile acquisition of shares, is possible, when a significant amount of equity increase is voted and some shareholders receive disproportionally more shares than the rest of the shareholders. However, the law provides for protective mechanisms, such as required majorities for adoption of a decision for increase of the capital and pre-emption rights for the existing shareholders.
A hostile acquisition could also take the form of a sale of shares through enforcement of a share pledge, of imposed distraint over the shares or in the context of general enforcement proceedings against a shareholder in the target company.
Shareholders in a limited liability company may expel other shareholders for alleged violations of the latter, including nonfulfillment of decisions of the general meeting of the shareholders, acting against the interest of the company, etc
Hostile acquisitions are not common in Colombia, as there are usually controlling shareholders in both closely-held and listed companies.
In France, these operations remain rare (c. 10 hostiles offers since 2010).
Hostile takeovers are not a common feature of the New Zealand M&A market and any hostile attempts in recent years have generally been unsuccessful.
Hostile acquisitions are uncommon in Egypt.
There is no statutory mechanism to consummate an unsolicited acquisition. Neither a merger nor scheme of arrangement can ever be truly hostile insofar as they require the consent of the target Board. In situations where the Board of target is uncooperative or unwilling to engage, the acquirer may launch a proxy fight (on the terms and subject to the conditions set out in the constitutional documents of the target) to have the Board or certain members thereof replaced. The proxy fight may be launched in connection with a tender offer or contractual acquisition of equity. The squeeze-out procedure is also available in the context of a hostile transaction (assuming the relevant thresholds are met).
The Cayman Islands does not have any applicable takeover, competition or anti-trust legislation. The constitutional documents of a company may contain certain poison pill or other structural defence provisions (such as classified boards, fixed number of board members, limited rights to call meetings, etc.) which may make a hostile takeover more difficult to consummate or give the target superior bargaining power.
In order to comply with their fiduciary duties, the directors of a company will need to give due consideration to any bona fide offer, even if it is unsolicited, to determine if the acceptance of such an offer is in the best interests of the company. Depending on the scope of the fiduciary duties imposed on the manager(s)/managing member(s) of an LLC, they may also be obligated to consider any bona fide offer.
Hostile acquisitions are quite rare in Italy, but they have occurred in the recent past.
Hostile bids are rare. Given that schemes of arrangement are proposed by the target to its shareholders, hostile bids cannot typically be effected by a scheme in practice. Hostile bids then usually take the form of a public offer, however, a bidder will be limited in the amount of diligence it can carry out.
No. Hostile acquisitions are almost non-existent in Brazil. They have been attempted in a couple of cases in the past, but were not successful. There are several Brazilian companies which do not have a clear - or formal - controlling shareholder, but in almost 100% of the cases some of the shareholders have a very relevant stake of the capital stock (more than 20%). It is thus very easy for these shareholders to react to an unsolicited bid and block the sale. There are some remarkable cases in Brazil where the board rejected an unsolicited bid in less than 24 hours. My opinion on this is that the capital markets of Brazil still has a long way forward as far as hostile bids are concerned.
Hostile acquisition are not a common feature in Cyprus.
Most acquisitions occurring in the Norwegian markets are friendly, i.e. that they are recommended by the targets’ boards. However, hostile bids occur relatively frequently, In 2013, about 32% of the offers launched in the Norwegian capital markets could be characterised as hostile, in 2014, only 12% of the bids were hostile. For 2015, 42 % of the bids were not recommended by the targets’ board of directors, and could strictly speaking be characterised as hostile. In 2016, 37% of the bids were not recommended by the target company’s board, and in 2017, about 20% of the offers launched could be characterised as hostile.
As noted in question 5, hostile acquisitions are not possible in practice in Myanmar.
Hostile takeovers are not common in Greece. Such a takeover has been unsuccessfully attempted only recently for the shares of the hospital group Hygeia by the competitor hospital group Iatriko Kentro.
Hostile takeovers are still rare in Germany. Due to the fact that public M&A transactions are only a small fraction of the German M&A market, hostile takeovers represent an even smaller share. Typically, there is a single-digit number of hostile takeovers per year in Germany, which often start as an unsolicited approach and turn into friendly takeovers after a certain period of time and negotiations.
2017 featured a more prominent case with Finnish company Fortum attempting to acquire Uniper, which was regarded as a hostile takeover by the Uniper management. With Fortum failing to acquire a majority though, intentions and further developments in this case remain to be seen. The pump maker Busch’s attempt to acquire a majority of rival Pfeiffer Vacuum is a recent example for an unsolicited approach with a consensual end to the undertaking as Busch fell short of a majority but gained more influence on the board.
Belgian publicly traded companies are usually featured by having one or more reference shareholder(s). In order for a public offer to be successful, the approval of the reference shareholder(s) will be required. As a result hereof, hostile acquisitions are rare in Belgium.
23.1 To date, hostile acquisitions have not yet become a common feature of the M&A landscape in Vietnam.
23.2 There is a number of reasons for the relative rarity of hostile acquisitions, including:
- the fact that the regulatory platform for the implementation of hostile acquisitions is comparatively underdeveloped;
- the fact that the size of the securities market is sufficiently small that it is relatively easy for resistance to hostile acquisitions to be organised and mobilised; and
- there are numerous informal techniques available to opponents of hostile acquisitions to thwart the successful implementation of hostile acquisitions.
Hostile acquisitions are permitted but are not particularly frequent in Switzerland, with only 11 out of 69 offers between 2007 and 2017 being unfriendly offers.
The notion of ‘hostile acquisition’ has a very different meaning in Russia. We are talking about raiders taking over companies by questionable (sometimes illegal) means, rather than through buy-ups of shares of publicly listed companies. Reportedly, such raids are still relatively frequent in the Russian market. However, recent governmental policy, including introduction of notarisation requirement in connection with transfers of participation interest in limited liability companies, is intended to narrow the field for raiders’ takeovers of businesses.
Hostile acquisitions of public companies are permitted and relatively common in the United States, although they constitute a minority of total transactions. The volume of global hostile bids rose sharply in 2017 to 15% of total global M&A volume, which represents a dramatic increase from 2015 and 2016 which totalled 11% and 9%, respectively. Nonetheless, hostile takeovers are still difficult because of the uncertainty surrounding them, the increased cost of proceeding on a hostile basis, the lengthy amount of time involved with dismantling a target’s defensive measures and because some buyers may not be comfortable with the more limited scope of due diligence. Moreover, in hostile acquisitions that ultimately succeed, the target company typically drops its opposition and agrees to negotiate with the hostile bidder prior to consummating the merger.
In Sweden, hostile takeover offers occur quite rarely, mainly as a consequence of the shareholder structure in Swedish publicly listed companies where institutional investors often hold significant stakes, thus the probability of any hostile offer being successful without the recommendation of the target company’s Board of Directors or the support of such institutions being low.
Hostile acquisitions are not common in the Philippines.
Hostile bids are allowed but are generally more difficult than recommended bids. This is because the bidder in a hostile bid will only have access to a limited amount of information that is in the public domain.
However, this difficulty could be less of an issue when the target is a regulated investment fund, as is often the case in Guernsey, because the fund’s net asset value is assessed and made available on a regular basis, in accordance with the applicable fund regulations. The most recent example of a successful hostile bid is the takeover of the Advantage Property Income Trust Limited in August 2009.
Hostile acquisitions are very rare in Japan. The few attempted hostile acquisitions made in the past mostly ended in failure.
Isle of Man
Hostile acquisitions are not common in the Isle of Man.
There are no rules preventing hostile takeovers in Mauritius but they are quite rare.
No. Hostile takeovers are quite rare in Bermuda.
British Virgin Islands
As a result of the limited amount of due diligence available on BVI companies and the requirement that the boards of both constituent companies must consent, hostile acquisitions, whilst permitted, are not a common feature in the BVI.
Hostile acquisitions are not yet typical in Jersey.
Since most Turkish companies are controlled by a single majority shareholder, the hostile take-over concept is not as practicable in Turkey as it is in the U.S. In Turkey, most companies are family-owned or have shareholders with a clear controlling position that cannot be challenged through acquisition of shares on the market or by approaching minority shareholders. Therefore, hostile take-overs are not of practical significance in Turkey. There is no specific piece of legislation governing hostile tender offers.
No, hostile take-overs are not a common occurrence.
In Hungary, target companies are not commonly subject to hostile acquisition.