At what stage of negotiation is public disclosure required or customary?
Mergers & Acquisitions (2nd edition)
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.
Subject to the disclosure obligations of companies listed on 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.
Apart from the general provisions on the obligation to notify the competent authorities, there is no requirement to disclose the negotiation of a potential acquisition of a private company.
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 Takeover Act, once a bidder has decided to make an offer it must publish this decision without undue delay. A mere market rumor about a possible offer will not trigger said announcement obligation or a duty to formally decide on an offer. However, specific market rumors may require the target to make an ad hoc announcement on the potential offer.
In its announcement, the bidder must disclose its decision to make an offer for the target shares and whether the bid is a full or a partial offer. Before announcing its decision to launch an offer, the bidder must notify BaFin and all relevant German stock exchanges. However, the bidder is not obligated to announce the details of the bid, such as the price and conditions, at this stage.
Suspicious facts, for example, those caused by speculations by the press, do not imply an announcement obligation for the bidder.
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.
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.
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.
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.
Please see above. Confidentiality is usually maintained until the main terms of the deal are reached.
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.