At what ownership levels by an acquirer is public disclosure required (whether acquiring a target company as a whole or a minority stake)?
Mergers & Acquisitions (2nd edition)
Acquisitions that result in a change in control of an Offshore Listing Vehicle may trigger the requirement to make a mandatory general offer to all shareholders of the company pursuant to the Takeover Code.
Please refer to the relevant Offshore Chapter for more detail on public disclosure ownership thresholds for each offshore jurisdiction.
If shares in a stock corporation that is listed on the Vienna Stock Exchange are being sold, any share transfer has to be reported within two trading days to the Vienna Stock Exchange, the Financial Market Authority and to the company whose shares are being transferred, if by such share transfer the shareholding of one shareholder reaches, exceeds or falls below 4, 5, 10, 15, 20, 25, 30, 35, 40, 45, 50, 75 or 90%.
Sec. 22 para 2 Takeover Act stipulates that in case of an acquisition of a direct stake in a publicly traded (target) corporation that exceeds 30 % of permanent voting rights, the Takeover Commission has to be informed immediately and an offer to acquire the remaining shares must be made within 20 trading days. The increase of such controlling stake by way of “creeping in” does not allow for circumvention of these public disclosure rules. Even when such controlling stake in excess of 30 % is being held through one intermediary holding company, the disclosure rules apply.
Once a person holds more than 3% of the voting rights of a UK company whose shares are admitted to trading on a UK regulated market or a prescribed market (e.g. AIM) whether as a shareholder or through direct or indirect holding of financial instruments, that person is required under the Disclosure Guidance and Transparency Rules to disclose that interest. Disclosure is also required if the holding in question increases or decreases through each whole percentage point over 3%. The notification thresholds for a person holding an interest in a non-UK company (whose shares are admitted to trading on a regulated market and whose home state is the UK) are 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75%. Notification must be made on the standard form which can be obtained from the website of the Financial Conduct Authority (the UK regulatory for these purposes) within 2 trading days in respect of UK companies and 4 trading days in respect of non-UK companies.
In the context of a public takeover, once an offer period has commenced interests and dealings in “relevant securities” need to be disclosed under the Code. Relevant securities include, among other things, target securities subject to the offer and carrying voting rights, target equity share capital and securities convertible into or having subscription rights into either of these. Options in respect of and derivatives referenced to these securities or shares are also relevant securities.
Persons subject to the Code's disclosure regime and persons with interests in 1% or more of any class of relevant securities of the target company are required to disclose details of their interests or short positions in, or rights to subscribe for, any relevant securities of the target company. The disclosure must be made no later than 12 noon on the tenth business day after the commencement of the offer period.
Disclosure of dealings in relevant securities of the target company must be made by the bidder no later than 12 noon on the business day following the date of the relevant dealing. The procurement of an irrevocable undertaking to vote in favour of an offer by the bidder and a shareholder will not amount to a dealing provided certain criteria are satisfied (although if an irrevocable undertaking is entered into prior to the commencement of the offer period this must be disclosed and is usually done so in the announcement of an firm intention to make an offer).
Acquisition of any stake in a limited liability company will require publication in the Commercial Register. The transfer of materialized shares in a joint-stock company is not subject to registration with the Commercial Register. However, acquisition of all the shares in a joint-stock company by a single shareholder would also require such publication. Publication of other mandatory information can indicate the change of the ownership, such as change of the members of the boards, invitations and decisions of the shareholders, etc.
Transactions of considerable economic impact must also be notified to and receive approval by the Competition Protection Commission, effectively making such transactions public (except for any confidential information, specified by the parties). Notification requirements also apply to acquisition of minority stakes, where acquisition would afford the acquirer negative control (i.e. veto rights, appointment of managers, etc.).
Acquisition of voting rights in a public company are subject to notification to the FSC if such acquisition reaches or exceeds 5% or any other percentage, divisible by 5, of the total voting rights in the target public company. The notification must contain (i) the total number of voting rights, owned by the acquirer as a result of the acquisition, (ii) the subsidiaries (if any), through which the acquirer exercises their voting rights, (iii) the date of acquisition and (iv) information regarding the acquirer. The notification can be prepared and submitted in the English language. The target public company is then obliged to publicize the information, contained in the notification.
There are no public disclosure requirements in the case of the acquisition of shares in private companies.
A person acquiring or disposing shares in a listed company or in a financial institution (such as, banks, financial corporations, stock brokers, trust companies), must notify the issuer or the financial institution, as the case may be, the Colombian Superintendence of Finance (Superintendencia Financiera de Colombia - SFC), and the Colombian Stock Exchange (Bolsa de Valores de Colombia - BVC) if the number of shares to be acquired or disposed reaches or exceeds the thresholds of 10% of the capital stock of such company. Such notification shall be accompanied with the corporate and financial documents set forth in the applicable law.
Pursuant to the above, the acquisition or disposing of 10% or more of the shares in a listed company or in a financial entity is subject to the prior authorization of the Superintendence of Finance.
Regarding listed companies, the law requires the disclosure of shareholdings or voting rights to the AMF and the target when crossing certain thresholds (5%, 10%, 15%, 20%, 25%, 30%, 1/3, 50%, 2/3, 90% and 95%). Disclosure must occur within 4 trading days of the thresholds’ crossing. Such disclosures are then notified to the market by the AMF).
An acquirer will be required to make public disclosure once it becomes a substantial product holder in a listed company. An acquirer will be deemed to be a substantial product holder once it holds a relevant interest in 5% or more of the quoted voting products in a listed company. Acquirers will then need to provide a further public disclosure for each subsequent 1% increase in their relevant interest in the target company.
There are no public disclosure obligations in respect of acquiring unlisted shares and quotas, other than disclosures made to the various regulators under Chapter 13 of the Captain Markets Law (Ultimate Beneficial Ownership) and which are not shares with the public.
For listed shares, required public disclosures include:
- Acquirer must disclose to the target its intention to acquire the shares. The Capital Market Law provides that any person wishing to acquire more than 10% of a public company’s share capital must notify the company of the same at least two weeks prior to effecting such acquisition. The company must in turn notify any shareholder holding at least 1% of the company’s share capital within at least one week from the date of receipt of such a notice.
- An acquirer acquiring, through an open market transaction, 5% of the share capital or the voting rights of a listed company, or any multiples thereof (i.e.10%, 15%, etc.) but less than one-third of the share capital, must notify the EGX and FRA within two days of the relevant transaction taking place.
- Board of directors’ members and employees of listed companies must notify the EGX and FRA when acquiring 3%, or any multiples thereof, of the share capital or voting rights of the target company.
- If the acquired percentage reaches 25%, the notification to the EGX and FRA should also include details of future investment objectives of the acquirer(s) and future plans with respect of the management of the concerned listed company.
The Cayman Islands do not have any regulations relating to the making or content of any announcement.
While not strictly prescribed by the Companies Law or the LLC Law, and regardless of any applicable listing rules or regulation, any merger will require some form of disclosure statement. The Companies Law and LLC Law require each constituent company to enter into a written plan of merger. Such plan sets out certain prescribed information and, for more complex transactions, this is usually accompanied by a more detailed merger agreement.
For schemes of arrangement, alongside the applicable court documents, the scheme circular must be provided to the scheme participants and include sufficient information so as to allow them to make an informed decision on the merits of the proposed scheme.
For a tender offer, there is no Cayman Islands prescribed documentation. However, listing rules or regulations may be applicable. For a squeeze-out, the Companies Law and LLC Law require that notice be given to dissenting shareholders.
Art. 120 of the Consolidated Financial Act requires, in public M&A transactions, disclosure as soon as a party holds more than 3% (5% for small- to mid-sized listed companies) of the share capital in a share issuer whose state of origin is Italy. In this case, Consob and the company must be promptly notified.
Under the Issuers’ Regulation (Consob Resolution No. 11971/1999, Regolamento Emittenti), those who hold, directly or indirectly, financial instruments with voting rights must inform the company and Consob if the holding of the instruments achieves, over-achieves or is reduced below some significant and progressive thresholds (5%, 10%, 15%, 20%, 25%, 30%, 50%, 66.6% and 90%).
The Issuers’ Regulation provides that those who directly or indirectly hold “potential investments” (i.e., cash settled and/or share settled derivatives or options) also have disclosure obligations to target companies and Consob when the relevant thresholds are exceeded.
Rule 8 of the Rules imposes disclosure obligations on dealings in relevant securities are effected during an offer period. All dealings in the target’s shares by an acquiror (with more than a 1% interest, or which acquires more than a 1% interest) must be aggregated and disclosed publicly. Public announcements must be made in writing to an approved Regulatory Information Service by 3.30pm on the business day following the transaction. The Companies Act and the Transparency Regulations require public disclosure to the relevant exchange in the case of regulated companies.
The general concept is that any material information has to be disclosed, which are defined as information related to acts, facts or omissions of the target that can affect (i) the market price of the target’s securities or other securities backed by them; (ii) investors’ decisions to buy, sell, or preserve those securities; and (iii) investors’ decision to exercise any rights arising from the target’s securities or other securities backed on them. There are several different approaches to this rule, the most common of which is the disclosure at the time of execution of the definitive binding agreements. However, some more conservative players disclose the material information related to M&A deals at an earlier stage - for example, at the time of the receipt of proposals or execution of exclusivity agreements. The golden rules, of course, is that one must disclose the material information once there is a leak or a potential leak into the market.
Pursuant to the Cyprus Stock Exchange Law, every natural or legal person who directly or through a third party, acquires or disposes of a participation in a company which has been registered in the Republic of Cyprus and whose shares are listed on the Cyprus Stock Exchange or a regulated market of another Member State, by which the voting rights he holds reach or exceed the thresholds of five per cent (5%), ten per cent (10%), fifteen per cent (15%), twenty per cent (20%), twenty-five per cent (25%), thirty per cent (30%), fifty per cent (50%) and seventy five per cent (75%) (‘substantial participation”), the said person shall notify the company and simultaneously CySec as well as the Stock Exchange as regards to the shares that are listed on the Stock Exchange, the latest within the working day following the execution of the transaction or the day on which he acquired knowledge or should have acquired knowledge of the transaction, with a notification to each recipient.
The said notification shall include the following details:
(a) the percentage of voting rights and share capital which the person who has the obligation held before and after the acquisition or disposal and, if possible, the chain of related enterprises through which he holds the voting rights;
(b) the date on which the acquisition or disposal was made; and
(c) the identity of the beneficiary of the securities, even if he does not have the right to exercise the voting rights, as well as the identity of the natural or legal person who has the right to exercise the voting rights on behalf of the beneficiary.
In business combinations including non-listed companies, there are no specific disclosure requirements for large shareholders. Even so, for AS-companies, the LLCA requires any person who acquires an interest in shares of a target to immediately notify the company of such acquisition. For ASA-companies, the PLCA requires any member of the board, accountant, general manager and other key employees of the company to immediately inform the company’s board of any purchase or sale of shares or other financial instruments of the company, including any such transaction conducted by persons from affiliated parties.
Note that special disclosure requirements apply for certain private equity, hedge or venture funds which, subject to certain exemptions must notify the FSAN as soon as possible and in no event later than 10 business days after such funds has acquired control (more than 50 per cent of the votes) over a target. This notification obligation is as a main rule conditional upon the target being listed on a regulated market. The same notification obligation is also triggered if such funds acquire of control over a non-listed company, provided such target employs 250 or more employees, and either has annual revenues exceeding €50 million or a balance sheet exceeding €43 million. If such funds acquire shares in such a non-listed company, and the fund's portion of shares reaches, exceeds or falls below 10 per cent, 20 per cent, 30 per cent, 50 per cent or 75 per cent of the votes, the fund's manager will also have to inform the FSAN about the transaction.
For companies listed on a Norwegian regulated market, the STA sets out detailed disclosure provisions for acquisition of significant shareholdings. If an investor's (buyer's) shareholdings exceeds specific thresholds related to percentage of shareholdings, the investor is obligated to immediately notify the company and Oslo Stock Exchange on behalf of FSAN. As soon as an agreement on acquisition or disposal has been entered into that entails that a proportion of an investor's shares, right to shares or corresponding proportion will exceed or fall below 5%, 10%, 15%, 20%, 25%, 1/3, 50%, 2/3 or 90 %, the investor must issue such disclosure notification. Shares held by various related parties are, for the purpose of the above calculation, deemed to be included in the shareholdings of the disclosing party. The same notification requirements apply to the acquisition or disposal of subscription rights, options and similar rights. Certain amendments to such disclosure obligations are expected in the near future.
In addition, merger talks or acquisition discussions involving a listed company will at some point constitute inside information between the parties (i.e. information that is likely to affect the price of a specific financial instrument and that is not publicly known), and must accordingly be disclosed to the market by the prospected target. Note that Oslo Stock Exchange’s Appeals Committee has previously ruled that confidential negotiations between a potential bidder and a target’s board could trigger disclosure requirements even before it is highly probable that a takeover offer will be launched insofar as such conversations “must be assumed not to have an immaterial impact on the target’s share price”. However, to avoid prejudice or cause harm to legitimate business interests during a negotiation and planning phase, such prospected listed target may decide to delay disclosure; provided, that: postponement does not mislead the public; the inside information is kept in strict confidence between the parties; and Oslo Stock Exchange is informed about the target’s decision to delay disclosure. If so, the target is required to keep a list of all persons in possession of the information (with date and time entries), of which a copy must be furnished to Oslo Stock Exchange upon request. Any leakage of the intention to launch a bid, typically evidenced by share price movements or rumours and speculations in the market, will force the bidder to publish its intention to launch an offer.
The disclosure obligations applicable to acquisitions of shares in listed companies are set out in questions 5 and 6 above.
As noted in question 6, under the MCL, companies are required to maintain a register of shareholders and make such registers available to shareholders during business hours, and in the case of public companies, the public. While this could be a source of disclosure of acquisitions in a company, as noted in question 6, in practice few companies are in compliance with this requirement.
More broadly, companies are required to file an annual return with Dica. Under the MCL, the annual return must list, for public companies, their 50 largest shareholders, and for private companies, all shareholders. Under the FIL, banks are also required to submit an annual report to CBM of all shareholders having a substantial interest in the bank and their details.
There are no public disclosure requirements in the case of the acquisition of shares in private companies.
Any person submitting a public bid (whether voluntary or mandatory) must inform both the HCMC and the target’s BoD in writing before any public announcement. A person acquiring or disposing shares in a listed company to which voting rights are attached must notify the issuer and the HCMC if such proportion reaches or exceeds the thresholds of 5%, 10%, 15%, 20%, 25%, 33.3%, 50% or 66.6%. The same obligation applies to certain cases of acquisition, disposal and exercise of major proportions of voting rights, as well as to the acquisition or disposal of financial instruments.
The Securities Trading Act (“WpHG”) provides that any person whose shareholding in a German-listed company reaches, exceeds or falls below 3%, 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75% of the voting rights in such company must without undue delay notify the company and simultaneously BaFin. Voting rights include not only voting rights from a person’s own shareholdings, but also from shareholdings of subsidiaries, trustees, parties acting in concert and a few other parties as set out in the applicable anti-circumvention rules.
In addition, any person holding, directly or indirectly, financial instruments which give the holder the unconditional right to acquire, or discretion as to the right to acquire, shares to which voting rights are attached or which have a similar economic effect must without undue delay notify the company and simultaneously BaFin if the voting rights attached to such shares reach, exceed or fall below 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75% of the voting rights in such company. The term “financial instruments” refers to, among other things, transferable securities, options, futures, swaps, forward rate agreements and contracts for difference.
Disclosure to the FSMA and the target publicly traded company is principally (there are exemptions) required whenever a natural or legal person acquires directly or indirectly voting securities of the target, representing 5 % or more of the total voting rights. This notification is also required if, as a result of the direct or indirect acquisition of securities conferring voting rights, the number of voting rights reaches or exceeds any multiple of 5% (i.e. 10 %, 15 %, 20 %, etc.) of the total voting rights. The articles of association of the target may include lower thresholds and thresholds between the statutory thresholds (the following thresholds can be included in the articles of association 1 %, 2 %, 3 %, 4 % and 7,5 %).
Further, there are specific disclosure requirements in cases of persons acting in concert and when, following a transfer, the amount of securities carrying voting rights falls below certain thresholds.
15.1 Public disclosure is not relevant in the context of target companies being private companies and is only relevant in the context of target companies being public companies (whether listed or unlisted).
15.2 In the context of public companies, for the purposes of determining public disclosure obligations, the shareholdings of any person or entity must be aggregated together with the shareholdings of all of their related persons or entities.
15.3 Any shareholder holding less than 5% of issued and paid-up voting share capital (on an aggregated basis) is not subject to any public disclosure obligations, unless:
- that shareholder and/or its related persons or entities acquire shares which take their total aggregated shareholding up to ≥5% of issued and paid-up voting share capital (in which case they must disclose publicly the fact of having become a “major shareholder” within seven calendar days of having completed such acquisition);
- that shareholder (being a natural person) also holds any governance or executive managerial office within the relevant public company (in which case they are deemed to be an “internal shareholder” or “insider” (an Internal Shareholder) and are thus obliged to disclose publicly any proposed acquisition or divestment of shares in the company, no later than three business days prior to implementing the proposed transaction); or
- that shareholder (being a company or other non-natural legal entity) has any of its representatives holding any governance or managerial office within the relevant public company (in which case they are deemed to be an Internal Shareholder and are thus obliged to disclose publicly any proposed acquisition or divestment of shares in the company, no later than three business days prior to implementing the proposed transaction).
15.4 Any shareholder holding ≥5% of issued and paid-up voting share capital (on an aggregated basis) is deemed to be a Major Shareholder, and must disclose publicly, with seven calendar days of completion, any acquisition or divestment by it or its related persons or entities which increases or decreases its total aggregated shareholding above or below each interval of an even 1%. Thus, for example:
- if a Major Shareholder holds 5.5% and then acquires an additional 0.3% to take it up to 5.8%, this acquisition will trigger no disclosure obligation; whereas;
- if a Major Shareholder holding 5.8% acquires an additional 0.3% to take it up to 6.1%, this acquisition must be disclosed within seven calendar days of completion.
15.5 In the case of Internal Shareholders, any acquisition or divestment of any shares in the relevant public company must be disclosed no later than three business days prior to the proposed date of implementing the proposed transaction.
If a person (acting alone or in concert with others) directly or indirectly acquires or disposes of shares of a listed company and reaches or crosses any of the thresholds of 3, 5, 10, 15, 20, 25, 33⅓, 50 or 66⅔% of the voting rights of the company, such person is obliged to make a disclosure to the target company and SIX. Separate disclosure duties exist for long positions (shares, long call, short put, etc.) and short positions (short call, long put, etc.). Netting of long and short positions is not permitted.
Public disclosure is required in the following instances:
- Public disclosure by legal entities and sole entrepreneurs of certain facts about their business (e.g. reorganisation, liquidation, increase/decrease of charter capital) in the Unified federal register of legally relevant information on business of legal entities, sole entrepreneurs and other economic agents (http://www.fedresurs.ru/).
- Public disclosure of information on acquisition of more than 20% of shares/ participation interest in a company and reorganisation of legal entities (including mergers, accessions, etc.) is required.
- Public companies and certain non-public companies having a considerable number of stakeholders should also disclose information about material facts (i.e. facts that if disclosed can materially affect the price of the issuer’s securities and their listed price), including, without limitation, information on:
- information on acquisitions / sale of shares (or obtaining of indirect control over votes granted by relevant shares, including, without limitation, under a voting or shareholders agreement) each time any of the following thresholds is reached: 5, 10, 15, 20, 25, 30, 50, 75 or 95% of the company’s shares;
- sending by a joint-stock company of notification on reorganisation to the state registration authority;
- acquisition / termination of control over a material controlled legal entity;
- persons that gain/ cease to exercise control over a joint-stock company;
- receipt /making of voluntary public offer by a person upon acquisition of more than 30% (50%, 75%) of shares of a public joint-stock company, mandatory public offer by a person that acquired more than 30% (50%, 75%) of shares of a public joint-stock company made to the remaining shareholders;
- mandatory redemption of shares by a person that acquired 95% of shares of a public joint-stock company following request for redemption by the remaining shareholders or a public offer made by the person that acquired 95% of shares;
- entering into transactions the value of which is equal to or exceeds 10% of book value of a joint-stock company’s assets.
Publication of notifications about material facts shall be done within 1 (one) day from the date when the relevant fact occurred – via a news service, and within 2 (two) days from the said date – on the joint-stock company’s web page in the Internet.
Disclosure is required by listed companies when the acquisition becomes price sensitive information (i.e., the price of the acquirer’s shares is likely to be influenced).
Private companies do not need to disclose information regarding acquisition. However, in case of these companies, the acquisition may become public as soon as the share transfer is registered with the Commercial Registry Office (in case of limited liability companies where the registration of this share transfer is mandatory).
Under the QFMA Mergers & Acquisitions Rules, a listed company must disclose the details of any individual who owns 5 percent or more of the shares.
A target company generally is not obliged to disclose that it is exploring a sale or engaged in negotiations with a potential buyer or buyers prior to entering into a binding agreement. Similarly, potential buyers also have no general duty to disclose a potential acquisition unless they enter into a binding agreement that is material to the acquirer or commence a tender offer. Although it is not common in the U.S. market, some acquirers obtain “toehold” positions in the securities of the target company prior to making an offer. In these circumstances, the Exchange Act requires that the buyer file a Schedule 13D within 10 days of obtaining beneficial ownership of 5% or more of the equity securities of the target. The buyer is also required to amend the Schedule 13D promptly upon the occurrence of any material change in facts.
While neither buyers nor targets have a general obligation to publicly disclose a potential deal or negotiations relating thereto, U.S. public companies may not selectively disclose any such information to investors under Regulation FD, except to investors that agree to keep it confidential and not trade on the information. The Exchange Act also imposes a reporting obligation on public companies by requiring them to file a Form 8-K upon the occurrence of various events, as more fully described in Question 6. Finally, a company undertaking a securities offering will be obliged to disclose all material information in connection with the offering, which may include unrelated pending M&A activity.
With respect to publicly listed companies, an offeror (as well as anyone else) is required to notify the Swedish Financial Supervisory Authority and the target company as soon as possible, but at the latest three trading days following the day the change in shareholding occurred, when such change in shareholding entails that the offeror’s holding (including e.g. shares held in treasury and shares held by subsidiaries) reaches, exceeds or falls below any of the following percentages of the target’s total shares or voting rights:
- 5% and every subsequent 5%, up to and including 30%.
The disclosure requirement applies not only to shares, but also to depositary receipts entailing a right to vote for the shares which the depositary receipts relate to, financial instruments which entitle the holder to purchase already issued shares as well as financial instruments having an economic effect similar to that of financial instruments that entitle the holder to purchase already issued shares.
The Swedish Financial Supervisory Authority will make the relevant information public.
For public companies, any person who acquires directly or indirectly the beneficial ownership of more than 5% of class of securities of such company is required to make a disclosure with the SEC, the PSE and the company itself, through the submission of a form prescribed by the SEC. Disclosures by the acquirer, through the filing of the prescribed form, are also required where the acquisition will result into ownership in excess of 10%, as well as changes in such 10% ownership.
Both public and private companies, however, are required to submit a GIS, which sets out information on the shareholders and their shareholdings, regardless of ownership percentage.
If the transaction requires merger control approval by CICRA the proposed transaction will be made public upon CICRA’s receipt of the application, as set out in 11. above.
Where the provisions of the Takeover Code apply, there are requirements for the bidder, target and certain persons interested in relevant securities to make a public opening position disclosure following the commencement of the offer period.
Where the target is listed on a stock exchange, the rules of the exchange will apply to the timing of the public disclosure.
Where no specific regulatory regime applies to the company or transaction, it is for the parties to decide as to when they want to disclose the offer to the public.
When the shareholding ratio of the shares held by an acquirer exceeds 5%, such acquirer must file a large shareholding report with the relevant Local Finance Bureau, which includes the following information: purpose of the shareholding, changes in the shareholding during the last 60 days, source of funding used for the acquisition of the shares and any material agreement relating to the shares.
Isle of Man
Save where the target is listed on a foreign stock exchange, in which case the rules of the foreign stock exchange will apply, there are no specific requirements in the Isle of Man for public disclosure during an acquisition.
If the Takeover Code applies, Rule 8 requires the following public disclosure:
- a bidder must make a public Opening Position Disclosure following the start of an offer period or an announcement first identifying it as the bidder or identifying a competing securities exchange offeror.
- the target must make a public Opening Position Disclosure following the commencement of the offer period and, if later, after the announcement that first identifies any securities exchange offeror.
- any person interested in 1% or more of any class of relevant securities of a target or of any securities exchange offeror must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified.
In the Isle of Man, ownership of shares of a 1931 Act becomes a matter of public record upon transfer. Under the 2006 Act, the register of shareholders is not a matter of public record.
There are no prescribed rules regarding public disclosure. Generally, it is up to the parties to decide as and when they want to disclose the offer to the public.
With respect to listed GBCs and Reporting Issuers, a public announcement is required to be published by:
- The board of the target company when a firm intention is made;
- The board of the target company when there is undue movement in its share price whether or not a firm intention is made;
- The offeror when there is undue movement in the target company’s share price before a firm intention is made and the FSC has reasonable cause to believe that such undue movement is caused by the offeror’s actions;
- The board of the target company when offeror has withdrawn its offer;
- The board of the target company or the offeror upon the FSC’s direction.
The Companies Act does not prescribe public disclosure in the context of an acquisition. Should the acquirer reach the thresholds discussed below in questions 25 and 27, a notice disclosing intention to acquire shares may be circulated to the remaining shareholder(s) as applicable.
Public disclosure may be required by the applicable stock exchange upon which the target is listed. For example, if the company were listed on the BSX, the company would have to keep the BSX, shareholders of the company and other holders of its listed securities informed without delay, by way of public announcements and/or circulars, of any information relating to the company (or its group) that:
- is necessary to enable them and the public to appraise the financial position of the company and the group;
- is necessary to avoid the establishment of a false market in its securities; and
- might reasonably be expected materially to affect market activity in and the price of its securities.
Additionally, where an acquirer becomes a holder of 5% or more of a local company, the local company must notify the Exchange.
British Virgin Islands
There is no BVI regulation relating to the documentary requirements for public disclosure regarding ownership levels. Once applying for listings on a stock exchange BVI companies may amend their memorandum and articles of association so that their constitutional documents require disclosure of any stake building or acquisitions of shares above certain thresholds.
Where the Takeover Code applies, the bidder must publicly disclose its opening position (including those of its concert parties).
Where an application is made to the Channel Islands Competition Regulatory Authorities (CICRA), notice of the application will be published by CICRA.
Otherwise there are no specific disclosure requirements in Jersey unless required by the target’s constitutional documents or by a foreign stock exchange if the target’s shares are listed.
As per the disclosure rules of the CMB, publicly traded companies are required to announce any changes in their share ownership (through direct or indirect acquisition of 5%, 10%, 15%, 20%, 25%, 33%, 50%, 67%, or 95% or more of the share capital or voting rights) or management control within three business days of the acquisition date. Both the target company and the acquirer are required to disclose the share transfer on the Public Disclosure Platform.
The CMB’s disclosure regulations allow disclosure to be delayed to protect the company’s legitimate interests, provided that: (i) the suspension is not misleading; (ii) the company is able to keep any related inside information confidential; and (iii) written approval is issued by the board of directors.
The TCC introduces a similar disclosure requirement (through trade registry gazette) for share acquisitions in privately held companies, designed to reveal group structures and to protect minority shareholders and creditors against potentially abusive exercises of control by the parent company.
- An acquisition of 5% or more of the shares of a public company must be notified to the SEC and The NSE.
- An Offeror is required to make an announcement on the floor of The NSE of its intention to make a takeover bid to the Offeree Company.
- Where the target or the offeror is a publicly traded company, it must notify The NSE upon giving or receiving a notice of intention to make a take-over, an acquisition or a tender offer.
- Any notification to The NSE is announced to the market/investing public by the NSE, unless otherwise exempted.
- In some cases, industry regulators are notified of any acquisition of 5% or more in the target but such notifications are not announced to the public. However, acquisition/transfer of shares is registered at the companies’ registry upon completion of the deal (save for publicly traded companies) and information at the registry is generally available to the public.
The core provisions on registration and public disclosure of ownership changes in Hungarian companies are set out in the Company Procedure Act and, in case of public companies, the Capital Market Act. Whether and at what ownership level disclosure is required generally depends on the form of the target company.
In case of a limited liability company (Kft.), all shareholders, irrespective of their ownership level, are indicated in the company register which is publicly accessible via electronic means. The change of the shareholder of a limited liability company must be registered in the company register and publicly disclosed irrespective of the level of ownership it has acquired.
In case of a (private or public) company limited by shares (Zrt. and Nyrt.), the identity of a shareholder is not specifically disclosed in the company register as long as the respective shareholder does not own more than 50% of the votes. If a shareholder holds more than 50 % of the votes, this fact and the identity of the shareholder is indicated in the company register which is publicly accessible. The rule applies if a shareholder holds at least 75 % of the votes. Shareholders holding a smaller portion of the votes are not disclosed to the public via the company register. However, all shareholders of the company exercising shareholders’ rights are indicated in the book of shares of the company, which is publicly accessible and may be looked into by any third person at the registered seat of the company.
In case of public companies limited by shares (Nyrt.), the Capital Market Act prescribes special disclosure obligations which are applicable in addition to the above general provisions. Shareholders of a public company are required to notify the company and the Hungarian National Bank acting as supervisory authority if their participation in the votes in the company’s shareholders’ meeting reaches, exceeds or falls below the following ratios: 5, 10, 15, 20, 25, 30, 35, 40, 45, 50, 75, 80, 85, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99 %. At the same time, the company is required to notify the supervisory authority once it receives such a notification from a shareholder and to publish such notification. Pursuant to the Capital Market Act, separate disclosure requirements apply to the process of acquiring a participation in a public company limited by shares via a public takeover bid. For more details, please refer to point 16 below.