What information relating to a target company will be publicly available and to what extent is a target company obliged to disclose diligence related information to a potential acquirer?
Mergers & Acquisitions (2nd edition)
Corporate formation documents, articles of association and other related documents can be retrieved or requested from the NRBE. Further, the NRBE offers an online search web base in which general information of a target company may be found, including register of directors, chief executive officers, auditors, announcements of authorisation to issue shares or acquire treasury shares granted to the board of directors as well as transcripts of the latest annual accounts and information on agreements with shareholders (above certain minimum thresholds). Information on bond loans, including the full set of the bond documentation, for any bond raised in the Norwegian/Nordic bond market may be available from Nordic Trustee. Information on any real estate owned (not leased) by the target in Norway, together with a complete list of registered mortgages on such real estate will be searchable on several forums. Charges registered over the target's inventory and fixed assets may also be requested from the NRBE. A list of major shareholders will be available in the notes to the target’s annual accounts, and will often also be available on such company’s web pages. A complete list of shareholders may also be requested from the target itself, and the target will be obliged to hand out such information to anyone requesting a transcript.
For target companies listed on a Norwegian market, the STA sets out several disclosure provisions, which entails that publicly available information may be quite extensive. Information memorandums and prospectuses used in share offerings or following a major transaction will be available, and may set out considerable information on the target company. Further, audited annual accounts and related directors' and auditors' reports as well as quarterly interim reports are made available to potential investors. Various announcement by the target company through the Oslo Stock Exchange is also publicly available and searchable through the exchange's online search motor "newsweb".
As a point of basis, a target company is not obliged to grant a potential acquirer any form of due diligence access. Also note that providing one potential acquirer with the opportunity to conduct due diligence does not automatically oblige the target to grant the same opportunity to other parties. Notwithstanding the foregoing, the board of directors of a target company will have a fiduciary duty to act in the best interest of the company. To what extent the target has such an obligation to grant a potential acquirer due diligence access will depend on whether it is considered to be in the best interest of the target and its shareholders to facilitate such due diligence.
Technically under the MCL, companies registered in Myanmar are required to maintain registers, among others, of shareholders at their registered office or principal place of business and make them available to shareholders, and in the case of public companies (defined as companies with more than 50 non-employee shareholders or which issue invitations to the public to subscribe for its shares), also to the public at a reasonable price.
However, few companies currently comply with this requirement and in general limited information is publicly available about the shareholders of unlisted companies registered in Myanmar. The MCL provides for Dica’s registers to be maintained electronically, and once this is implemented, it will give Dica greater capacity to ensure transparency of company information, and to itself make information publicly available. Any person may inspect Dica’s registers and records on payment of the prescribed fee.
YSX-listed companies are required under the Securities Listing Business Regulations of YSX to disclose earnings information and corporate decisions on important matters (or any other important fact) regarding the operation, business, assets or stock of the company which will have a considerable impact on investment decisions.
Potential acquirers will need to negotiate due diligence disclosure with target companies.
All Greek companies are registered in the General Commercial Registry of the Ministry of Commerce (GEMI). Both financial and legal corporate information is publicly available, including its corporate structure and its annual financial reports.
Furthermore, information on potential target companies may be acquired from its annual financial statements, its articles of association, the annual reports of its BoD, reports filed with supervisory and regulatory authorities (if the company is under supervision or a special regulation regime), from market and sector reports, data and statements published on the target's website, as well as from past reports issued by the target company in the event of listings, placements etc. The Cadastre and the local Land Registries keep the real estate ownership records, while undertakings operating in regulated markets are registered in the sector specific registers.
The amount of the diligence related information that shall be disclosed to a potential acquirer depends on the transaction intentions and specific and to the extent of liability the seller is prepared to take. According to the Greek Civil Code, during the stage of negotiations relating to any type of transaction, the parties are obliged to act in good faith, and are thus prohibited to provide incomplete or misleading information.
A main source of information is the electronic commercial register (Handelsregister) with retrievable basic information on the company’s members of the management and supervisory board, issued power of representation, registered share capital, and the articles of association. Other public sources of information include:
- Electronic business register (Unternehmensregister) including information entered into the relevant registers, such as the commercial register, contained in mandatory filings or announcements to the relevant authorities, such as the BaFin and published in the Federal Gazette (Bundesanzeiger);
- Land register, containing information on real property, however, not freely accessible, only with a qualified interest (usually potential buyers of the property or banks creating a mortgage);
- IP register containing information on domestically registered IP rights;
- Ad-hoc-announcements on issues such as stakebuilding;
- Since December 2017 German Transparency Register (Transparenzregister) is accessible , however not publicly, but for parties demonstrating a qualified interest (not available for listed companies);
- Listed companies have to disclose takeover relevant information in their financial statement (for example golden-parachute provisions, change-of-control-clauses, etc.); or
- Website of the company which usually contains the annual report, major holdings notifications, ad-hoc announcements and corporate governance documentation.
The management of a listed target company is not obliged to disclose due diligence information, but may decide to do so. The management is the “gatekeeper” for the due diligence information. When making the decision, the management board has to act in the best interest of the company and must balance the company's interest in the potential bid and the necessity to secure confidentiality of the company's affairs as well as rules of insider information. A confidentiality agreement is a “must have” to allow the potential bidder access to confidential information.
Publicly available information
Publicly traded companies are by law required to disclose quite some information to the public. They are subject to recurring and ad hoc reporting requirements.
The following information would typically be publicly available:
- the company’s articles of association;
- the (statutory and consolidated) annual accounts;
- the annual report, including the corporate governance statement and remuneration report; publicly traded companies are further required to include certain takeover-relevant information in their annual report (such as transfer restrictions, shareholders’ agreements, etc.);
- the bi-annual financial report (including certain financial information and intermediate annual report);
- transparency disclosures and information on shareholding structure;
- dividend related information;
- information on and minutes of shareholders’ meetings;
- certain special reports of the board of directors;
- information on reported manager’s transactions;
- publications in the annexes to the Belgian Official Gazette, including amongst others capital movements; appointment/dismissal of members of the board of directors, members of the legal management committee, daily managers and the statutory auditor;
- certain basic company information, including information about its business units (through the website of the Crossroad Bank for Enterprises);
- information about registered IP and domain names;
- information on owned real estate;
- certain information on short positions;
- approved prospectus;
- press releases.
Websites of financial analysts also make available certain information and analyses about publicly traded companies.
The board of directors of the target company will further decide to what extent and the circumstances under which information that is not subject to a legal disclosure requirement will be made available. When taking such a decision, the directors should especially consider the corporate interest, their confidentiality obligation, equal treatment requirements and restrictions relating to market abuse regulation.
6.1 Public companies in Vietnam (both listed and unlisted) and their “major shareholders” (that is, holding ≥5% of issued and paid-up voting share capital, aggregated with their related persons and entities) (Major Shareholders) – and their governance and executive managerial officers (Officers) – are subject to public disclosure obligations being broadly similar to (but generally less onerous than) those to which public companies and their directors, officers, and substantial shareholders are subject in more developed jurisdictions.
6.2 The disclosure obligations of listed and “large-scale” unlisted public companies, are more onerous than those of unlisted pubic companies not being “large-scale”. Applicable law defines “large-scale” unlisted public companies as being those having paid-up equity capital in the amount of ≥VND120 billion (equivalent to approximately ≥USD5,316,000), as reflected in the audited financial statements of the relevant company for the most recently-ended financial accounting period.
6.3 Information and documents having been disclosed to the public by public companies or their Major Shareholders or Officers will normally be available in electronic copy format on the websites of any one or more of the target company, the State Securities Commission, and/or the relevant stock exchange (whether the HOSE or the HNX). In most cases, however, the bulk of this publicly disclosed information will only be available in the Vietnamese language.
6.4 Public companies are often (but not always) reticent to facilitate the conduct by investors of due diligence over and above the information available on the public record. Where public companies do agree to facilitate due diligence, care must be taken from the perspective of Vietnam law prohibitions against insider trading.
6.5 As a general proposition, the overall standard of compliance by public companies and their Major Shareholders and Officers with their public disclosure obligations is reasonable, but not of the standard generally observed by public companies and their significant shareholders, directors, and officers in more developed jurisdictions. The conduct of additional due diligence, over and above the information available on the public record, to the extent practicable, is prudent and desirable in most cases.
6.6 In relation to all Vietnam-domiciled companies (whether public or private), the following basic searches are possible to conduct from public record sources:
- The National Business Registration Portal (NBRP):
The searches available via the NBRP provide basic enterprise registration details of Vietnam-domiciled companies. The NBRP is searchable online on a free-of-charge basis (providing very limited corporate information) or a fee payment basis (providing somewhat more detailed corporate information). Results are available immediately or within one business day, depending upon the type of search conducted. The search results are mostly in the Vietnamese language, although some limited information in relation to the enterprise registration certificate of the relevant target company is normally available in English.
The following is a link to the website of the NBRP:
- The National Registration Agency for Secured Transactions (the NRAST):
The searches available via the NRAST provide details of security instruments (such as mortgages and pledges) registered over “moveable” assets (which excludes real property, aircraft, and vessels). The NRAST database is searchable online (free of charge) or by way of physical hard-copy application (on a fee payment basis) and on the basis of the names of the security provider and/or the security holder. The online search results are available immediately, whereas the results of searches conducted by hard-copy application are available promptly (normally within less than one working week).
It should, however, be noted that not all security instruments are required to be registered with the NRAST. Therefore, the search results arising from the NRAST database in some cases will not reveal all of the security instruments in existence which affect the target company and/or its equity capital or assets.
The following is a link to the website of the NRAST:
- The National Office of Intellectual Property (the NOIP):
The searches available via the NOIP provide details of intellectual property rights having been registered with the NOIP, such as registered trademarks, trademark licences, patents, registered designs, and others. The NOIP database is searchable by way of physical hard-copy application, on a fee payment basis, and on the basis of the name of the registered owner or licensee and also on a number of other bases. Results of official searches are slow and can take more than one month to obtain. Searches via the online platform provided by the NOIP can also be conducted, on a free-of-charge basis, and will normally produce results immediately, although the degree of accuracy and comprehensiveness of the results obtained via such online searches is generally lower as compared with the physical hard-copy searches.
The following is a link to the website of the NOIP:
- The Copyright Office of Vietnam (the COV):
The searches available via the COV provide details of copyright works having been registered with the COV, which may include all forms of works being capable of copyright protection (including software source code). The COV database is searchable by way of physical hard-copy application, on a fee payment basis, and on the basis of the name of the registered owner and on a number of other bases. Results of official searches are slow and can take more than one month to obtain. Informal searches can also be conducted via the online platform provided by the COV, on a free-of-charge basis, and will normally produce results immediately, although the degree of accuracy and comprehensiveness of the results obtained via such online searches is generally lower as compared with the physical hard-copy searches.
The following is a link to the website of the NOIP:
- Departments of Natural Resources and Environment (at provincial or municipal level) (the DONRE):
The searches available via the various provincial or municipal level DONREs provide details of registered land use rights (the Vietnam equivalent of land titles) (Land Use Rights) and ownership of buildings and other assets attached to land (Buildings)), including any mortgage security or encumbrances registered over Land Use Rights and/or Buildings. No search with national coverage is available. Each province and major city in Vietnam has its own DONRE and their databases can only be searched on a province-by-province or city-by-city basis. Each respective DONRE is searchable by way of physical hard-copy application, on a fee payment basis, and on the basis of the name of the registered land user and/or Building owner. Applicable policies and procedures differ from DONRE to DONRE and accordingly, the timeline for obtaining results differs from province to province and city to city. Results are in most cases available within approximately two to four working weeks, but in some cases it can be difficult to obtain responses within a reasonable timeframe or at all.
6.7 There is extremely limited scope for the conduct of litigation searches in Vietnam, even where the names of the parties and the details of any relevant dispute are known. Although there is some limited search functionality in connection with various different courts on a province-by-province and city-by-city basis, these are very difficult and time-consuming to perform and the results are highly unreliable.
6.8 The available searches outlined in Section 6.6 above – and the databases upon which they are based – are comparatively underdeveloped and unsophisticated, in comparison with their counterparts from more developed jurisdictions, and the results obtained from them cannot be regarded as being comprehensive or altogether reliable.
6.9 With the exception of the public disclosure obligations of public companies (as outlined in Sections 6.1 to 6.4 above), Vietnam-domiciled target companies and vendors of shares or other equity interests in them are under no disclosure obligations at law, in connection with M&A transactions. Although under Vietnam law there are broad prohibitions against outright fraud and deliberate misrepresentation, Vietnam law requires nothing of target companies or vendors in relation to disclosure of information to prospective purchasers (except as outlined in Sections 6.1 to 6.4 above in relation to public companies).
The amount of publicly available information on a Swiss target mainly depends on whether such company is privately held or publicly listed. For private companies, publicly available information is very limited. Certain information can be obtained from the commercial registry, including general corporate information, such as the share capital and number of shares, name of board members and their signing authority and articles of incorporation. The financial statements are though not publicly available.
Listed companies are required to publish substantial information. Key information can be found on the company's website and on the website of SIX. Available information includes the annual reports (incl. financial information, corporate governance), interim accounts, information on significant shareholders, transactions by board members and senior executives as well as general information on the company's stock (incl. price, volume, historical data). Under the Directive on Ad hoc Publicity, the company is required to release price-sensitive information (unless it is permitted to delay publication). These releases are accessible on the company's website.
A listed company approached by a potential acquirer is not obliged to disclose diligence-related information to such acquirer. However, if the board of a target company grants due diligence access to a bidder, the same information and documents would also have to be disclosed to any other bidder launching a competing offer.
If the target company is a public joint-stock company, it shall disclose material information related to its business (annual and quarterly reports, financial reports, , information on material facts (including, without limitation, information on main shareholders, officers and material transactions), etc.).
If the target company is a non-public company, general information with regard to the amount of its share capital, general director, etc. can be found on the website of the Federal Tax Service in the form of an electronic extract from the corporate register and in the Bulletin of state registration, being the official publication of the Russian corporate register.
Russian Federal law ‘On state registration of legal entities and individual entrepreneurs’ envisages that certain facts about the business of legal entities and entrepreneurs are to be published, including, among other things, information on reorganisation, liquidation, increase/decrease of charter capital, appointment/termination of authority of sole executive body, net assets, pledge of assets of a legal entity, issuance of independent guarantees (other than by banks), acquisition of more than 20% interest in other companies, location and changes of location, certain financial information, etc. The above information shall be published in the Unified federal register of legally relevant information on business of legal entities, individual entrepreneurs and other economic agents (http://www.fedresurs.ru/).
Certain information on the company’s real estate can be collected from the federal service for state registration, cadastre and cartography (Rosreestr) and others. This information, however, does not include any list of real estate assets held by the company (which list can be requested only by the asset owner itself).
Recent changes to the Russian Civil Code introduced a good faith standard in relation to the negotiation process. Pursuant thereto, non-disclosure of reasonably expected information in the course of negotiations or provision of false information can be regarded as bad faith behavior of a party to negotiations and therefore a breach of legal requirements. These provisions, however, have not been sufficiently tested in practice yet and there is no commonly accepted position on the standards and scope of the required disclosure.
A significant number of M&A transactions (especially with involvement of foreign investors) include a due diligence stage.
Private (non-listed) companies publish a limited amount of information. Data concerning, amongst others, the share capital, shareholders, directors, scope of business, headquarters and minimal financial information are available with the competent Commercial Registry Office.
In addition, listed companies publish key information in line with EU-wide regulations.
There is no specific obligation to disclose imposed on the target company.
The only information publicly available will be that which can be found on the website of the target (which must include biannual financial reports) or on the QE website or which is published in newspaper in connection with the target’s annual general meeting. Such publication will include the balance sheet, profit and loss statement, board of directors’ report, auditor’s report and general assembly agenda.