At what stage of negotiation is public disclosure required or customary?
Mergers & Acquisitions (3rd edition)
Negotiations will in principle be confidential prior to the official notification to the FSMA. Of course, there might be legal grounds for disclosure under the markets abuse regulation. Under certain circumstances, delayed disclosure is, however, possible.
Someone having the intention to launch a public offer is required to formally notify the FSMA. The FSMA will publish this notification. Prior to this publication, it is not allowed to announce a bid in any form whatsoever. There are, however, exceptions to this principle:
- if deemed necessary for the proper functioning of the market, the FSMA may request a person who might be involved in a possible public takeover bid to publish a notice without delay or do so itself.
- following the so-called “put up or shut up” principle, if a person itself or through an intermediary, has made statements that raise questions about its intention to make a bid, the FSMA may request the publication of a notice clarifying this intention. The person who has confirmed its intention to make a bid shall give formal notice within the time limit set by the FSMA. The person who does not confirm its intention to make a bid in due time is prohibited to submit a bid for the securities of the target company concerned for a period of six months.
Other than as mentioned in question 15 above, there is no requirement for public disclosure under Bermuda law. If the Company is listed on the BSX, public disclosure is required on the signing of the relevant transaction agreement. Customarily, public disclosure happens immediately after the execution of an Agreement and Plan of Merger/Amalgamation or an Implementation Agreement (as applicable).
The negotiation phase is normally not publicly disclosed, unless the transaction is structured as an open auction.
HANFA may require an entity to give an express declaration on the intended takeover if the situation in the capital market indicated a potential takeover, and especially when circumstances indicate the existence of a takeover agreement or there have been significant changes in trading and price of shares in the regulated market, or if that entity has expressed its intent to carry out the takeover in any other way. At the request of HANFA, this declaration must be published without delay.
The obligation to publish the takeover bid arises at the time of the conclusion of the legal transaction of the acquisition of shares of the target company.
HANFA decides on the bidder’s request for approval to disclose a takeover offer. After HANFA approves the disclosure, the takeover offer is publicly announced (in Croatian Official Gazette and in at least one daily newspaper sold in Croatia) and lasts 28 calendar days from the date of the last announcement.
For the duration of the takeover offer, the shareholders of the target company intending to sell their shares to the bidder deposit their shares with the depository agency (in Croatia, for the non-materialized shares the depositor is always the Central Depository Clearing Company; and for the materialized shares it is a credit institution by choice of the bidder).
Upon completion of the takeover offer, the bidder pays and takes over all shares deposited with the depositor during the period of the takeover offer, after which the takeover repost is publicly announced.
Negotiated bids: It is common for a bidder to acquire a majority stake in the target from a controlling shareholder (where one exists) in a negotiated transaction prior to launching the mandatory bid for the rest of the shares. A negotiated purchase of a majority stake usually eliminates the risk of a competing bid, since any competing bidder would be precluded from acquiring majority ownership. A negotiated purchase typically allows the acquirer to structure the transaction as a normal private share acquisition, involving due diligence on the target. The acquisition agreement will typically include standard closing conditions, representations and warranties, indemnities, etc.
If it is trying to organize the acquisition of a controlling stake from a number of large, but not controlling, shareholders, the bidder must take care to ensure that confidentiality is maintained and that rumors do not develop that influence the share price of the target. If confidentiality is not maintained and there is unusual share activity, the bidder may be forced to inform HANFA of its intentions and initiate a mandatory takeover bid procedure.
Care must be taken not to inadvertently trip the obligation to launch a takeover bid by entering into a binding and final share purchase agreement. Under the Takeover Act, even if an agreement for the purchase of over 25% of an issuer’s shares is subject to standard conditions precedent (that is, the share purchase agreement has been executed but its legal effectiveness is postponed until fulfillment of certain conditions), it can be deemed to constitute a legal transaction that triggers the obligation to publish a takeover bid. In practice, it is possible to avoid a premature triggering of the Takeover Act by signing a so-called “pre-contract on the purchase of shares” which, although in form and substance is similar to a share purchase agreement with conditions precedent, does not represent legal basis for acquisition of shares due to its “pre-contractual” legal nature and thus does not trigger the application of the Takeover Act. Once all the conditions precedent have been met, the parties enter into a binding share purchase agreement, which triggers application of the Takeover Act. The deadlines for publishing the takeover bid commence only after conclusion of the actual share transfer agreement, rather than upon the conclusion of the “pre-contract”. This approach, on a case-by-case basis, should always be discussed in advance and pre-approved by the legal advisors and/or the regulator.
If the Target it is private, usually at closing.
If the Target it is public, at the time of the public offering.
Pursuant to Section 5 para (2) and para (3) of the Takeover Act, in public transactions the bidder must immediately inform the public and the target if its management board and supervisory board have taken the decision to launch an offer or a situation has arisen which results in being obliged to launch a mandatory offer (see question 24. below). Furthermore, a potential bidder has to announce the intention to make an offer if the target’s share price fluctuates considerably or if there are rumours about an offer or speculation that an offer is to be launched and there are reasons to believe that this is due to the preparation of an offer, the fact that an offer is being considered or the purchase of shares by the bidder. The announcement does not need to contain details about the intended offer.
The bidder must notify the Takeover Commission of its offer and provide the Takeover Commission with the offer document within ten trading days (if no extension is granted – up to forty trading days) after the bidder has announced its intention to launch an offer. The notification period for mandatory bids is twenty trading days and cannot be extended.
The bidder must publish the offer document (see question 20 below) together with the confirmation of an independent expert at the earliest on the twelfth trading day and no later than the fifteenth trading day after such documents are received by the Takeover Commission, if the publishing is not prohibited by the Takeover Commission (Section 11 para (1) of the Takeover Act). Such publishing triggers the offer period. The offer needs to be published in a national newspaper that is available throughout Austria or in the form of a brochure that is provided free of charge to the public by the target company at its registered office and by the bodies instructed to pay the consideration. If the offer documents are not published in full in the Official Gazette of the Vienna Newspaper, at least information where the offer documents can be obtained needs to be published in such Official Gazette. If the bidder and/or the target company have a website, the offer document also has to be published on such websites.
The offer period has to be at least two weeks and can be for a maximum of ten weeks (the Takeover Commission can extend such offer period under certain circumstances). The result of the bid must be published immediately after the expiration of the offer period. In case of a mandatory bid or a voluntary bid aimed at control of the target, the offer period is extended for three months from the date of announcing the result of the bid.
Pursuant to the Act on Takeover Bids, once a bidder has decided to make an offer it must publish it without undue delay. The bidder must notify the Czech National Bank as well. The offer document may be publicly disclosed after the Czech National Bank's approval or, if Czech National Bank does not decide within 15 days, within the following 15 days after that (as mentioned in Question 15).
British Virgin Islands
See above, there is no BVI law requirement relating to documentary requirements for public disclosure. Whether such disclosure is customary will be driven by non-BVI related factors.
Please see the answer to question 15 above – other than for companies listed on the CSX, the Cayman Islands do not have any regulations relating to the making or content of any announcement.
There is no requirement to notify possible bid to target or to disclose it to the public prior to announcing or filing the offer provided that confidentiality is temporarily necessary for the implementation of the transaction, and can be maintained.
If confidentiality can no longer be ensured (notably in case of leak), an immediate announcement is required from bidder and/or target. Bidder may announce at any time, provided that it does not amount to market manipulation. Public announcement without filing does not constitute an offer.
When there are reasonable reasons to believe that a potential bidder is preparing a public offer, particularly when the market of the securities of an issuer is subject to significant changes in terms of volume or price, the AMF may ask such potential bidder to disclose its intentions to the public in a given time period (i.e. put up or shut up).
In addition to disclosures under Q.15, persons involved in a takeover of a listed company are only allowed to disclose confidential information if such disclosure can be considered appropriate under their respective duty of care. Confidential information is defined as including any unpublished information of a precise nature relating to one or more issuers and financial means and which could potentially affect the price of such means. Similarly, such disclosure needs to be precise and true, or else it can result in market distortion and imposition of criminal and administrative charges.
Under the Stock Exchange Rules, a listed company must disclose material information when certain decisions are made by the company in connection with an M&A transaction. Similarly, under the FIEA, a company that is obliged to submit an annual securities report must submit an extraordinary report when certain material decisions are made in connection with an M&A transaction.
In practice, companies try to avoid making a decision in an M&A transaction that would trigger any such disclosure obligation until the parties enter into a definitive agreement with respect to such transaction.
No specific disclosure is required before an offer is made. However, the Takeover Code (if it applies) does contain requirements in relation to the disclosure of dealings and positions.
Other than the Listing Rules of the Stock Exchange of Mauritius there is no requirement for public disclosure for non-listed companies.
Subject to the disclosure obligations of companies listed on the YSX, which are set out in questions 5 and 6, no specific public disclosure obligations apply to acquisitions of companies in Myanmar. If the acquiring company is a company listed overseas, public disclosure may be required under the listing rules applicable to such acquiring company.
Under Norwegian law, the fact that a listed company is discussing a potential takeover or a merger will at some point constitute insider information that must be disclosed to the market. Oslo Stock Exchange (OSE)’s Appeals Committee has previously ruled that confidential negotiations between a potential bidder and the target's board could trigger disclosure requirements even before it is highly probable that a takeover offer will be launched. Therefore, a bidder and the target's board must be prepared for situations where OSE, and the National Authority for Investigation and Prosecution of Economic and Environmental Crime in Norway (Økokrim), take the position that the disclosure requirement is triggered at a very early stage. This could be from when the target enters into a non-disclosure agreement that allows potential bidders due diligence access. However, if a target is approached regarding a potential intention to launch a bid, this will not by itself trigger any disclosure requirements for the target. A listed target is not obliged to comment on rumours, but accurate rumours about a potential bid can indicate that the target is unable to ensure confidentiality, which may require an announcement. These rules apply to all listed companies, whether they are bidders or targets.
For non-listed companies, there are no statutory provisions that require a non-listed company disclose in public that it is negotiating a takeover of shares or the business activities in another company. If, however, the undertakings concerned on the acquirer and the target side exceeds certain turnover thresholds, competition clearance will be necessary after the parties having executed the final sale and purchase agreement, but prior to such transaction being closed. However, note that the Norwegian Act on Alternative Investment Fund Managers (AIFM), under certain circumstances imposes a set of disclosure obligations on Alternative Investment Fund’s (AIF) manager in relation to such funds’ acquisitions of companies or businesses in Norway. This disclosure obligation is triggered when an AIF acquires control (more than 50% of the votes) of a target company, that either: (i) has its shares admitted to trading on a stock exchange or another regulated market (irrespective of that listed target company’s number of employees, revenues or balance sheet); or (ii) is a non-listed private or non-listed public company, but employs 250 or more, and either has annual revenues exceeding €50m or a balance sheet exceeding €43m.
Public disclosure is mandatory for public companies, and it is required if a prior agreement is executed (i.e. MoU or letter of intent). If, for example, a bidding process starts, no disclosure is required until a bidder’s offer is awarded and exclusive negotiations begin, and even at this point, the information can be communicated to the Superintendecy of Securities Market as reserved.
For transactions covered by the mandatory tender offer rule, the public disclosure is made prior to the negotiations since the SRC mandates the acquirer to first publish all initial requests, invitations, or tender offers.
For transactions breaching the Size of Party and Size of Transaction thresholds under the PCA’s implementing rules, the parties to the M&A are required to send a notification of the merger and await clearance or the lapse of the statutory period before the execution of the definitive agreements relating to the transaction. The filing of a notification for a proposed M&A will be published by the PCA. The disclosure of specific details on the M&A is prohibited. Further, any confidential business information submitted by the parties to the PCC shall not be disclosed, unless consented to by the parties, or required to be disclosed by law or by a valid order of a competent court.
Isle of Man
There is no requirement under the 1931 Act or the 2006 Act for public disclosure. If the target is listed on a foreign stock exchange, in which case the rules of the foreign stock exchange will apply.
If the Takeover Code applies, Rule 8 requires public disclosure, as set out at question 15 above.
In private M&A, no public disclosure is legally required to be made until the transaction is closed, except if any regulatory approvals are required to be obtained prior to the completion of the transaction and it has to be disclosed (e.g., merger control).
In public M&A, the answer depends on who the potential acquirer is negotiating with.
If the acquirer is trying to obtain inside information or discuss a potential merger with the management of the target, the negotiation needs to be made public or at least disclosed to the CMVM, which will then take the measures deemed appropriate.
If it is negotiating with a shareholder, the negotiation needs to be disclosed to the market whenever a significant shareholding threshold is crossed (see 15 above).
Please see above. Confidentiality is usually maintained until the main terms of the deal are reached.
Other than existing mandatory requirements (please see in question 15 above), there are no customarily accepted standards of disclosure. In certain cases, disclosure is made at the stage of signing of binding contractual documents. In others – upon completion of a transaction.
This area is regulated by the FMA, the JSE Listings Requirements and the Takeover Regulations. In short, all negotiations between an independent board and the offeror must be kept confidential. Confidentiality must be observed before a cautionary announcement or firm intention announcement containing “price-sensitive information” is made. Price-sensitive information may be provided to selected persons on a confidential basis. If there is a leak of such information or a reasonable suspicion that such a leak has occurred, the information must immediately be disclosed in a cautionary announcement.
A firm intention announcement is an announcement that must be made when a mandatory offer is required or when an offeror has communicated a firm intention to make an offer and is ready, able and willing to proceed with the offer. A firm intention announcement must be made immediately when the board of a target company has received a formal written offer, or an offeror is obliged to make a formal offer having triggered the requirements of a mandatory offer. Mandatory offers are dealt with in greater detail in question 25.
For private companies, there is no general obligation to disclose any acquisition to the public (see however question 10 above regarding obligations to consult with trade unions). In transactions involving a publicly listed company, the relevant securities market legislation and stock exchange rules are applicable. Depending on the circumstances, disclosure may become required, e.g. when the Board of Directors of the offeror has resolved to make the public offer.
Under the Directive on Ad hoc Publicity, preliminary negotiations in respect of a transaction may already be potentially price-sensitive and thus trigger a disclosure duty of the target. However, in negotiated transactions, the Swiss target is permitted to, and regularly will, postpone disclosure until a definitive transaction agreement has been signed, provided that confidentiality is ensured and an immediate disclosure is immediately made if a leak occurs. It is thus customary that a transaction is made public when the bidder launches its public offer.
Public disclosure is not required.
Publicly Listed Company
The Stock Exchange of Thailand (“SET”) requires the board of directors of a target company which has been contacted by an offeror, whether or not an agreement has been reached on the making of a tender offer, to keep information which has not been disclosed to the public strictly confidential, to ensure that the persons concerned with negotiations keep the information regarding the negotiations confidential, and to ensure that the persons who act as representatives, intermediaries or financial advisors perform their duties responsibly and keep the information confidential. The target company is required to contact the SET immediately if it concludes that there may have been disclosure of the information on the negotiations which has not yet been officially announced to the public. If the information relating to the takeover is leaked, the target company is required immediately to disclose the information to the SET.
In the case of an acquisition of a minority stake and a secondary share sale, the target company is required to make public disclosure if there is a change, directly or indirectly, of its major shareholders (the term “major shareholder” is defined to mean a shareholder holding more than 10% of shares in the target company). This normally takes place upon completion of the acquisition.
In addition, when an acquirer has carried out one of the following transactions so that the number of securities held by it reaches or surpasses 5 percent or a multiple of 5 percent of the target company’s shares (there are complicated rules applicable to disclosure in the case of the acquisition of convertible securities or warrants), the acquirer is required to report the transaction to the SEC:
- direct acquisition or disposal of shares or convertible securities of the target company;
- becoming or ceasing to be a related person; or
- becoming or ceasing to be a concert party.
There are no specific rules in the UAE around public disclosure of negotiations. Listed companies are obliged to disclose any material developments that could potentially impact the share price. However, disclosure is not required to matters under negotiation so long as the company informs the relevant stock exchange of developments and provides a list of individuals holding insider information.
The relevant exchange and SCA may under certain circumstances require request the company to make an announcement in relation to negotiations.
It is obligatory to make a public announcement on the date of agreeing to acquire the shares or voting rights or control over the target. If an acquirer proposes to acquiring shares or voting rights in, or control over the target company through the mode of a preferential allotment, then the public announcement is to be made on the date on which the board of directors of the target company authorizes such preferential allotment.
16.1 Public disclosure is only relevant in the context of target companies being public companies (whether listed or unlisted).
16.2 Where the vendor or the purchaser is deemed by law to constitute an Internal Shareholder, any proposed sale or purchase by such Internal Shareholder or its related persons or entities must be publicly disclosed no later than three business days prior to the proposed date of implementation of the proposed transaction.
16.3 In relation to any Major Shareholder not being an Internal Shareholder, any disclosable sale or purchase by it or its related persons or entities must be publicly disclosed within seven calendar days as from the date of completion.
16.4 In the case of a Mandatory Public Offer transaction, the target company must publicly disclose the public offer within three business days of receiving the required public offer documents, the offeror must announce the public offer within seven calendar days of receiving SSC approval being obtained, and the public offer must remain open for a period of between 30 and 60 calendar days.
There is no general duty of disclosure for either the target or the buyer while negotiations are taking place. This duty changes, however, once a binding agreement has been entered into or a tender offer has been commenced. Upon entrance into a definitive agreement, the public buyer and target must file Form 8-Ks, as more fully described in Question 6, informing their shareholders of the entrance into a binding material agreement.
The requirements are slightly different in relation to the commencement of a tender offer. If acceptance of the offer would result in the buyer owning more than 5% of the target, then the buyer must file a Schedule TO informing the public and the shareholders about the offer.
Additionally, while there are no U.S. securities laws that require the parties to keep negotiations confidential, it is customary for the parties to enter into a confidentiality agreement at the outset of negotiations to maintain the secrecy of the transaction until a binding agreement is signed. This custom exists because a number of negative consequences can result from premature disclosure of a potential transaction such as increasing the price of the target’s shares (if the market views the potential deal favorably) or prompting competing bids for the target.
There are generally no disclosure requirements in private M&A transactions. In a public M&A transaction, the public company is required to disclose the potential transaction via the applicable stock exchange promptly upon the signing of any written agreement (even a non-binding document, such as a letter of intent).
Generally, there are no public disclosure requirements imposed on target companies that are not listed on the EGX. It is customary, however, that the parties agree an announcement to be made to the public following completion of the transaction.
For a Publicly Traded Company, disclosure relating to a potential MTO falls upon the acquirer who should, pursuant to CML, immediately disclose its intention to launch an MTO to FRA and EGX in the following cases: (i) the potential acquirer has disclosed its intention to submit a tender offer and notified the Publicly Traded Company of same, (ii) satisfaction of the conditions set out under CML for launching an MTO,(iii) submission of applications to obtain regulatory approvals from the competent authorities, and (iv) rumors or speculative behavior or price movements related to the potential submission of a tender offer.
However, the CML obligates a Publicly Traded Company to immediately disclose a potential MTO to FRA and EGX upon receipt of a written notification to that effect from a potential acquirer. The same disclosure is required if the Publicly Traded Company enters into any memorandum of understanding, letter of intent, agreement to undergo a due diligence or any similar agreements whether binding or non-binding. The Publicly Traded Company must also disclose to the FRA and EGX any information it has that may materially affect the target company or the price of its shares.
Moreover, the CML also imposes the same disclosure obligations in the same circumstances outlined above on the principal shareholders of a Publicly Traded Company holding more than one third of its issued capital or voting rights, upon receiving a written notification from a potential acquirer of its intention to launch an MTO, in cases where such shareholders have entered into a form of agreement with the potential acquirer that has not been disclosed to the Publicly Traded Company.
There is no requirement to make a public disclosure unless the company is subject to the Takeover Code. Where the Takeover Code applies, a potential bid should be kept secret until it is formally announced. Once the bidder has notified the target’s board that they intend to make an offer they are also obliged to make an announcement that they have made a formal takeover offer. The requirement to make an announcement under the Takeover Code may also arise in a number of other situations such as where the acquisition necessitates a mandatory offer, where the target becomes subject to unusual share price movement, rumours or speculation and where negotiations extend beyond the parties involved and their immediate advisors.
Please refer to the relevant Offshore Chapter.
In a public takeover situation, the Code makes it clear that, prior to an announcement of an offer or a possible offer, secrecy is paramount; information must only be shared on a “need to know” basis with recipients made aware of the need to maintain secrecy. In order to maintain secrecy, advisors to both the target company and the bidder will assist with maintaining such secrecy and put in place contingency plans in the event of a leak.
There are certain circumstances under the Code where an announcement is required:
- when a firm intention to make an offer has been notified to the target board by or on behalf of a bidder;
- when an acquisition of an interest in shares in a public target company gives rise to an obligation to make a mandatory bid (where the acquisition results in the bidder (or persons acting in concert with it) holding an interest carrying 30% or more of the voting rights, or if a bidder (together with its concert parties) holds not less than 30% but not more than 50% of the voting rights but increases its shareholding);
- when, following an approach by or on behalf of a bidder to the target board, the target has become subject to rumour and speculation or there is an untoward movement in its share price (see below);
- when, after a bidder first actively considers an offer but before an approach to the target board, the target is the subject of rumour and speculation or there is an untoward movement in the target share price and there are reasonable grounds for concluding that it is the activity of the potential bidder which has led to the situation (see below).
The announcement of a firm intention to make an offer must contain information specified in the Code and will be a detailed announcement setting out, among other things, the main terms of the offer and information about the bidder, all the conditions and pre-conditions the offer or the making of an offer is subject to, the bidder’s intentions with regard to the business, employees and pension scheme of the target company and the rationale for making the offer. Where statements of intentions are made, the bidder should take as to the contents of such statements as the Panel may require the bidder to adhere to such statements.
Where there has been rumour and speculation or an untoward movement in the share price of the target company, the Code requires an announcement be made. An untoward movement is described as a movement of 10% or more compared with the lowest price for the target company shares since the time of the approach to the target board or an abrupt increase of a smaller percentage (for example, 5% in a single day). The Panel monitor dealings in shares and movements in the target company’s share price closely and the target company’s financial adviser(s) will be in regular contact with the Panel where there are movements in the target company’s share price or if there is unusual trading activity.
Bidders may also make a statement of an intention not to make an offer. The Code requires these be as clear and unambiguous as possible and the consequence of making such an announcement is that the bidder (and any person acting in concert with it) will not be able to make another bid for the target company or acquire shares which could lead to a mandatory offer being made for the target company for six months. Failure to do so could lead to the extension of the six month period. A bidder may be able to make another bid for the target company within the prescribed period if certain circumstances have arisen (e.g. a third party has made a bid for the target company) provided that this was contemplated in the announcement of the bidder.
Disclosure under the Companies Law
No express provisions require disclosure in the case of private M&As until completion of the procedure. Upon completion of the procedure, the necessary filings will need to be made with the ROC in respect of the change of shareholder of the company.
Disclosure for listed companies in the Cyprus Stock Exchange
Pursuant to the Public Takeover Law, prior to the decision to make a takeover bid, the offeror must make sure that his decision to make a takeover bid is final and must announce his decision only when he has every reason to believe that it can materialize. In addition to the above generality, the offeror is obliged to announce immediately the making of a bid (a) when he has a firm intention to make a bid; or (b) upon an acquisition of securities which give rise to an obligation to make a bid under the law.
Furthermore, within twelve (12) days from the announcement of a firm intention to make a bid, the offeror draws up the offer document according to the directives of the Commission and communicates it to the Commission and the board of the target company. The Commission may, within the time limit set out in the respective legislation, approve the offer documents or indicate to the offeror amendments before final approval or prohibit the publication of the offer document and issues its decision.
As long as the approval of the Commission to publish the offer document is secured, the offeror:-
i. announces, in accordance with section 7, and publishes as soon as possible in at least two daily newspapers the approval of the offer document (the same obligation exists in case the offer document is rejected by the Commission, in which case the reasons for rejection must be stated);
ii. communicates as soon as possible the offer document to the target company and to the representatives of the offeror’s employees or where there are no such representatives, to the employees themselves; and
iii. within seven (7) days from the announcement of the document approval (a) sends by post a copy of the offer document to the holders of securities subject to the bid, (b) lists the said document to its internet site, provided it maintains one, and (c) sends the said document to the regulated market where the securities are listed, with the purpose of listing the document on its internet site.
Finally, in accordance with the provisions of the Public Takeover Law, during the takeover bid period:-
(a) the offeror, any other person holding a percentage of five per cent (5%) or more of the voting rights of the target company or the offeror company, must announce immediately, every acquisition of securities of these companies by themselves, persons acting in their own name on their behalf or in concert with them, by controlled undertakings, as well as the acquisition price and any voting rights already held in that company;
(b) anybody acquiring a percentage equal to half per cent (0,5%) or greater of the voting rights of the offeree company or the offeror, must make an announcement for this acquisition as well as every subsequent acquisition of securities of these companies by himself, persons acting in their own name on his behalf or in concert with him or by his controlled undertakings, as well as the acquisition price and any voting rights already held in that company.
For the purposes of the Public Takeover Law, the obligation to announce is satisfied with simultaneous announcement to the following:-
(a) to the regulated market in the Republic of Cyprus where the securities are listed, and the regulated market lists it on its internet site;
(b) to the Commission;
(c) to the internet site of the person making the announcement, provided it maintains one;
(d) if the announcement is made by the offeror, to the representatives of its employees, or where there are no such representatives, the employees themselves, and the board of the offeree company;
(e) if the announcement is made by the offeree company, to the representatives of its employees, or where there are no such representatives, the employees themselves, and the board of the offeror.
Negotiations on the potential acquisition of a Hungarian private company are usually not disclosed to the public until the transaction documents are signed or until the transaction is closed and relating changes are registered in the company register. In case of the acquisition of a participation in a private company, public disclosure is only required by law in the cases described under point 15 above.
In case of a merger or transformation, public disclosure of the transaction must be made immediately after the respective shareholders’ meetings’ resolution on the merger or transformation several weeks before the merger or transformation can take effect to ensure that creditors will have sufficient time to claim security for their receivables vis-á-vis the concerned company, if applicable.
In case of the acquisition of a participation in a public company limited by shares (Nyrt.), additional disclosure requirements apply if the acquisition is made via a public takeover bid. In this case, several public disclosures need to be made in the course of the entire public takeover process. Pursuant to the Capital Market Act, a public takeover bid must be made if more than 33% of the votes, or, if no other shareholder owns more than 10% of the votes in the target company, more than 25% of the votes is acquired. The bidder is required to submit the public takeover bid for approval to the Hungarian National Bank acting as supervisory authority as well as to the target company’s board of directors. At the same time, the bidder shall publish the public takeover bid. Likewise, the bidder is required to publish the result of the supervisory proceeding as well as the deadline for making a declaration of acceptance immediately once it has received the supervisory authority’s resolution. If the bidder modifies the approved public takeover bid in respect of the consideration payable for the shares it shall immediately publish such modification. The target company’s board of directors is required to make an opinion on the public takeover bid and to publish such opinion. Likewise, any counter-offer as well as the result of the public takeover process need to be published.
In most cases there is a degree of negotiation with the QFMA. For instance, Article 2(2) states that a listed company which is party to an acquisition or merger outside of Qatar must disclose the offer details immediately upon approval of regulators in the offeree country.
If the condition set in Article 24 of the Takeovers Act (ZPre-1) is not fulfilled (as explained in answer No. 15) then public disclosure is not required in the stage of negotiation. However, if the circumstances on the capital market indicate that the offeror intends to carry out a takeover and in particular:
1. If there exists an agreement on takeover between two persons;
2. If the price of a security has considerably increased on the regulated market and this would lead to a conclusion that a takeover bid is about to be launched; or
3. If the competent body of the offeror has set a final price in a takeover bid which has not yet been announced
the Securities Market Agency (ATVP) may request that such offeror makes a clear statement whether he/she intends to make a takeover bid, within 24 hours of the receipt of the request by ATVP.