Are hostile acquisitions a common feature?
Mergers & Acquisitions (3rd edition)
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.
No. Hostile takeovers are quite rare in Bermuda although that is not to say that they are not considered as a possible method of acquiring a control of a target.
Hostile takeovers are uncommon considering that the companies usually have controlling shareholders and the limited power of the management of the Company.
The vast majority of the deals have involved friendly takeovers, with hostile takeovers virtually non-existent. Due to the fact that public M&A transactions are only a small fraction of the Croatian M&A market, hostile takeovers represent an even smaller share. In cases when the takeover is initiated as a hostile, it usually soon turns into friendly takeover after a certain period of time and negotiations.
Hostile acquisitions are not common feature.
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.
The hostile acquisitions are rather rare in the Czech Republic. The reason for non-occurrence of the hostile acquisitions is that the market in the Czech Republic has limited opportunities for investors, and therefore, there are limited opportunities for the hostile acquisitions to take place.
With regard to the public M&A transactions, the market is quite small and only a few of the companies have their shares publicly traded, therefore, there is not enough room for hostile takeovers.
Moreover, the Business Corporations Act provides the members of the limited liability company with an opportunity to limit the transferability of the ownership interest(s) of other members of the company in the memorandum of association, by the general meeting giving an approval to the transaction or by provision of the pre-emptive rights to the other members’ shareholdings in the company.
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.
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 save for competition rules which apply to changes of control of certain entities regulated by the Information and Communications Technology Authority Law (2017 Revision), as amended. 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.
In France, these operations remain rare (c. 10 hostiles offers since 2010).
Hostile takeovers are not common in Greece; however the relevant regulatory framework is in place.
Hostile acquisitions are very rare in Japan. The few attempted hostile acquisitions made in the past mostly ended in failure.
Hostile acquisitions are not yet typical in Jersey.
There are no rules preventing hostile takeovers in Mauritius but they are quite rare.
As noted in question 5, hostile acquisitions are not possible in practice in Myanmar.
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, in 2017, 20% of the offers launched could be characterised as hostile, and in 2018, about 42 % of the offers launched were hostile.
In our experience, hostile acquisitions are not common in the Peruvian M&A market. This is mainly a consequence that control of public companies is usually concentrated, so an acquisition needs approval of such controlling shareholders.
While hostile bids are permitted in the Philippines, they are not common given that shares in most Philippine companies are held by only a few shareholders who are usually related. In addition, only an extremely small percentage of active Philippine companies are listed on the PSE. Hence, the usual hostile takeover methods of engaging in a proxy fight or making an irresistible tender offer generally do not find application. Nevertheless, there have been instances of high-profile hostile bids in the past decade, such as First Pacific’s takeover of the Manila Electric Company and the SM Group’s takeover of Equitable-PCI Bank.
Isle of Man
Hostile acquisitions are not common in the Isle of Man.
As mentioned in 5 above, hostile acquisitions are a feature in public M&A but not a very common feature, especially considering the recent PTO landscape in Portugal. Most of the PTOs are deemed neutral or friendly by the target, even when the board concludes that the price undervalues the company.
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 bids are less frequent in the South African market, although not uncommon. It should be noted that hostile bids cannot be done by way of a scheme of arrangement because a scheme is required to be proposed by the target board.
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 permitted but are not particularly frequent in Switzerland, with only around 12% of all offers in the last ten years being unfriendly offers.
These are not common. There have been only a few cases in the past 10 years. Thai law does not provide for any difference in procedure for recommended and hostile offers.
Although hostile takeovers are possible under law, there have not been any such takeovers undertaken. As indicted above, until September 2018, UAE foreign ownership restrictions prohibited foreign companies from acquiring majority ownership and control of an onshore company, so a hostile bid by a foreign entity, until recently, was impossible, as it could not comply with mandatory takeover rules. The FDI Law now allows 100% ownership in specific sectors, however this law is still very new and hostile acquisitions have not taken place. A UAE company could launch a hostile bid against a UAE public company, both of which are wholly or majority owned by UAE entities. However, this is unlikely in practice given the UAE business culture in which many public companies are government or family owned.
No, hostile acquisitions are not a common feature. Due to the various disclosure and open offer obligations under the Takeover Code, it is very difficult to undertake a hostile acquisition.
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:
(i) the fact that the regulatory platform for the implementation of hostile acquisitions is comparatively underdeveloped;
(ii) 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
(iii) there are numerous informal techniques available to opponents of hostile acquisitions to thwart the successful implementation of hostile acquisitions.
Hostile acquisitions of public companies are permitted and relatively common in the United States, although they constitute a minority of total transactions. Hostile takeovers remain 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.
No. Competitive or hostile takeovers are relatively rare in the PRC market.
Hostile acquisitions are uncommon in Egypt.
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.
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.
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 acquisition are not a common feature in Cyprus.
In Hungary, target companies are not commonly subject to hostile acquisition.
Hostile acquisitions are not a common feature in Slovenia; however, they cannot be completely excluded. Buyers usually prefer to find agreement with the management of the target company and receive information which could help them to determine the right price for the shares in the target company and to correctly predict the company’s business future. On the other hand hostile acquisition is used when the management of the acquirer company evaluates that the target company management will not work in their favor. This approach is more common for domestic buyers which usually personally know the management of the target company and is very rare for foreign buyers.