Are hostile acquisitions a common feature?
Mergers & Acquisitions
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.
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.
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.
In China, hostile acquisitions have not become a common feature. However, with the dramatic change of economic and legal environment, hostile acquisitions tend to happen more frequently in the future M&A market. Reform of equity division has been successfully accomplished and the attitude of Chinese related laws and regulations towards hostile acquisition, such as Company Law (revision in 2014), Security law (revision in 2014), and Measures for the Administration of the Takeover of Listed Companies (revision in 2014), has been increasingly tolerant in recent years. It follows, therefore, that companies in China will face higher risk of hostile acquisition at the same time.
In the Finnish context, hostile acquisitions occur quite rarely. This is partly due to the shareholder structure in Finnish publicly listed companies where certain institutional investors (most notably local pension insurance companies) often hold significant stakes, which often results in quite low probability of any hostile offer being successful without the recommendation of the target company’s Board of Directors or the support of such pension institutions.
Generally, hostile takeovers are not typical for the German M&A market. However, the number of hostile takeovers in Germany increased in 2015, especially in the real estate and the chemical sector.
It must be noted that the practice of hostile acquisitions is not common in Greece. In reality, hostile acquisitions are regulated only in connection with listed companies under the provisions of Law 3461/2006 (implementing EU Directive 2004/25/EC on takeover bids).
There are no rules preventing hostile takeovers in Guernsey but they are not particularly common.
Isle of Man
Hostile acquisitions are not common in the Isle of Man.
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.
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.
Given there has been only one public takeover in the Kingdom, there is no market practice of hostile bids having been made. Whilst in theory they are possible and not prohibited by the M&A Regulations, hostile bids would be highly unusual in the Saudi public takeover context. Saudi companies tend to prefer a consensual approach, and a perceived lack of cooperation between management and the bidder would possibly deter shareholders from accepting hostile bids.
There have been periods in the past when activist funds and other funds actively attempted a number of hostile acquisitions, but they are not currently a common feature in Japan. We are only aware of a handful of deals where the acquisition was successfully closed but the target company has continued to object the acquisition right up to the completion of the deal.
Not common. There have been only a few cases in the past 10 years.
Since the number of joint 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 a common occurrence in the Maltese capital market.
Hostile acquisitions of public companies are permitted in the United States, although they constitute a minority of total transactions. From 2013 to 2015, the value of hostile bids increased from $145 billion to $577 billion, going from 5% of 20% of total M&A volume. Nonetheless, hostile takeovers are still relatively infrequent because of the uncertainty surrounding them, the increased cost of proceeding on a hostile basis 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.
Hostile acquisitions can and do occur in Vietnam, but are not particularly common in comparison with more developed jurisdictions.
There are no rules preventing hostile takeovers in Mauritius but they are quite rare.
Hostile acquisitions are not yet typical in Jersey.
Hostile acquisitions are not a common feature in Romania.
Hostile acquisitions are relatively uncommon in the UK.
During the first half of 2016, none of the 20 firm bids that were announced were hostile bids.
In the English market, a combination of the protections for target boards included in the Code and precedent mean that bids either commence on a recommended basis, or, if commenced on a hostile basis, will rarely continue through to announcement of a firm offer on that basis, tending to either subsequently secure recommendation from the target's board or fall away.
Our regulations only permit the hostile acquisitions of listed companies by means of the completion of a special takeover bid (OPA), but does not permit the hostile acquisitions of non-listed companies. On this regard, the Spanish Stock Exchange Commission (Comisión Nacional del Mercado de Valores or CNMV) informs that, since January 1, 2010, there have only been started a total of 36 takeover bids (OPAs) in Spain and just a small number of them are hostile and also a small number of them obtained a successful result.
Hostile acquisitions are not explicitly mentioned under Turkish legislation, and thus such acquisitions are not prohibited.
However, hostile acquisitions are not common in Turkey because most of the listed companies in Turkey are controlled by a single shareholder or a small group of shareholders with absolute majority. Accordingly, management control usually rests with the majority or controlling shareholder.