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)
An Offshore Listing Vehicle must comply with certain disclosure requirements pursuant to the Listing Rules, and amongst others, is required to make announcement of any information necessary to avoid a false market in its securities.
Please refer to the relevant Offshore Chapter for more detail on publicly available information and due diligence disclosure requirements in the respective offshore jurisdiction.
Basic information on the target such as the company name, the type of corporation, the line of business, its managing directors and authorized signatories, its share capital, former reorganisations as well as its articles of association and its annual financial statements are publicly available.
Depending on the concrete assets of the target company (e.g., real estate, patent, trademark), further information may be obtained from particular public registers such as the Austrian Land Register (Grundbuch) or the Patent Register (Patentregister).
Furthermore, all insolvency proceedings are registered with the publicly accessible Austrian insolvency data base.
In private M&A transactions, which is the dominant form in Austria, companies are not required to disclose diligence related information.
The managing directors of an Austrian company are required to keep company-related information confidential in the company’s interest. By way of exception, the disclosure of information to a potential acquirer is permissible if and to the extent that this does not impair the interests of the company. In case of competing takeover bids, the management of the target company must treat each competing bidder equally if information is disclosed (in order to maximise the offer price in the shareholders’ interest).
For private companies, certain information is required to be filed publicly with the UK registrar of companies (known as Companies House), for example its constitutional documents (i.e. its memorandum and articles of association), and key information on its directors, registered office, shareholders and share capital and private companies are also required to file their statutory accounts. This information will, by its very nature, be historic.
Publicly traded companies are required to notify without delay any non-public information which could be expected to have a significant effect on the price of its financial instruments to the market and which a reasonable investor would be likely to use as part of the basis for its investment decisions. Disclosure of this information can be delayed in limited circumstances where immediate disclosure is likely to prejudice the company’s legitimate interests (for example, where there are ongoing negotiations or a company is buying or selling a major holding), delay is not likely to mislead the public and the company can ensure the confidentiality of the information.
In addition, listed companies are subject to certain continuing disclosure obligations to, among other things, notify changes to capital, its board, lock-ups and shareholder resolutions (other than ordinary business passed at an AGM) as well as periodic financial reports (both annual and half-yearly, although some companies voluntarily disclose quarterly reports as well). Where a listed company is seeking to raise money through the capital markets, it will often be required to produce a prospectus which will be publicly available and will contain information relating to the company’s business and operations. Companies will also publish information on their websites which can usually be accessed by the public.
Listed companies are also required to include in their annual reports and accounts, statements concerning their compliance with the UK Corporate Governance Code and statements concerning board independence and their controlling shareholders.
The publicly available information depends on whether the target is a public or private company. Public companies must disclose on a regular basis various categories of information, including info about significant circumstances, which are expected to materially influence the financial results of the company, as well as material related party transactions. The scope of information that can and cannot be disclosed or used with regard to a public company in Bulgaria is regulated by EU Regulation 596/2014, under which certain rules with regards the provision of insider information have to be followed.
The publicly available information for private companies is more limited in comparison to the public companies. Usually, the seller discloses information to the acquirer, based on a due diligence request list, sent by the acquirer.
General information regarding any company (public or private) is available in the Bulgarian Commercial Register, including the corporate form entity (limited liability company, joint-stock company, etc.), seat and management address, governing bodies and their composition, representatives, registered share capital, type of shares (if the capital is divided in shares), shareholders (in some cases), all published annual financial statements, in-kind contributions to the capital, going concern pledges, quota pledges, initiated insolvency/liquidation proceedings, etc. The register is accessible electronically.
Information can also be extracted from the Property Register with respect to any real estate property, owned by the target. The register showcases the respective property’s ownership status, existing mortgages, enforcement proceedings, etc. This register is also available online.
The Central Register of Special Pledges contains all established special pledges over assets of an entity (including basis for the pledge, term of the pledge, etc.). The register is publically available, however it is not electronic yet (legislative changes have been adopted but have not entered into force and implemented at this point).
The Bulgarian Patent Office contains information on all registered intellectual property rights and any pledges established over them. The register of the BPO is electronic and public and can be used to extract information regarding an entity’s registered intellectual property rights, including the type of rights, any granted licenses, established pledges, date of expiration of the registration, etc.
Online checks for pending litigation, concerning the target company, may also be accessed to some degree, depending on the court involved.
Depending on the industry, in which the target operates, other public institutions may be utilized to obtain information. Such institutions include the Bulgarian National Bank (regarding credit institution and financial institution licenses), the Personal Data Protection Commission, etc.
This will depend on whether the target company is a private company or a publicly traded company.
In the first case, basic information will be available at the commercial registry held by the Chamber of Commerce of the target company’s domicile, such as the company’s bylaws, information on the appointed legal representatives and directors, amount of the company’s share capital, certain minutes of the meetings of the corporate bodies, financial statements (although not all companies comply with the obligation to deposit their financial statements in the Chamber of Commerce). In the second case, the strict rules governing the disclosure of information by Colombian publicly traded companies will allow the potential acquirer to have access to more information regarding the target entity, such as the securities listed, the management reports, financial statements and material operations and transactions (información relevante), among others.
There are no specific law provisions as to the obligation of the target company or its shareholders to provide diligence-related information to a potential acquirer. However, recent arbitral decisions have recognized the existence of certain “secondary duties of conduct” arising from the principle of good faith that includes the duty of information, according to which the seller and/or the target company should provide the potential acquirer with all the reasonable information necessary to undertake a due diligence process over the target company and to adopt an informed decision regarding the deal.
By-laws, minutes of shareholders’ meetings, documents on corporate reorganizations and annual and interim financial statements, as well as past prospectuses and “documents de référence” (annual reports), are available, without the target being alerted of the search.
Moreover, any listed company is under a continuing obligation to make public announcements as to any information of a precise nature, which has not been made public, relating, directly or indirectly, to it or its financial instruments, and which, if it were made public, would be likely to have a significant effect on the prices of those financial instruments (inside information).
The target company may (but is not obliged to) permit due diligence and open a data room provided that in particular the project is a significant one and the potential acquirer has expressed a real interest (intérêt sérieux) in implementing the contemplated transaction and signed a confidentiality agreement. The existence of the due diligence as well as any privileged information disclosed through the due diligence must be disclosed in the offer documentation. There is no possibility to file an offer that is conditional upon the findings of a due diligence review. If a bidder had access to a data room, any other bidder should have access as well.
The information publicly available to a bidder in relation to a target company will depend principally on whether the company is subject to general reporting and disclosure obligations as a consequence of being large, overseas owned and/or listed on the NZX.
If a company is considered “large” for the purposes of the Companies Act and/or Financial Reporting Act, the relevant company is required to make its annual audited financial statements publically available through New Zealand’s companies register.
If a company is listed, the company is also obliged to release half year and full year reports to the market and is subject to continuous disclosure obligations in relation to any matters which may be considered material to the operation of the company.
With the exception of the above and certain other statutory information (for example, corporate registers), a target company has no obligation to provide a potential acquirer with due diligence access.
The commercial register is a publicly accessible document that shows, inter alia, the names of the board members and managers, target company’s capital, duration, registration number and headquarters. As for listed companies, the board minutes, general assembly minutes, and financial statements, among other documents, are published by the Egyptian Exchange.
There is no legal obligation on the target to disclose diligence related information.
Publicly available information in the Cayman Islands is limited to the company name and the location of its registered office. If the target company is listed, additional information may be available (for example, any SEC filings). A search of the court registers in the Cayman Islands will disclose any originating process, in which the company is identified as a defendant or respondent, pending before the Grand Court of the Cayman Islands.
Both privately and publicly held companies must publish their annual financial statements, which can be consulted at any time by submitting a request to the chamber of commerce.
Listed companies are required to publish: (i) interim management reports at least once every six months, and (ii) annual accounts on their websites, together with information on their by-laws, governance, corporate structure and shareholders.
Furthermore, it is possible to obtain a business profile certificate (visura camerale) of any company registered with the companies’ register. The certificate gives a brief overview of the company, including the structure of its corporate bodies and its share capital.
No obligation exists to disclose information to a potential buyer in an M&A transaction. However, target companies spontaneously share confidential/non-public information with potential buyers within the limits of the company’s corporate interests.
The Companies Act, Rules, Listing Rules, Transparency (Directive 2004/109/EC) Regulations 2007 (as amended) (Transparency Regulations) and MAR determine the information that must be put in the public domain. In addition, there may be additional disclosure requirements where the target is also listed on a foreign exchange (e.g. NYSE or Nasdaq).
A number of public filings must be made to the Companies Registration Office pursuant to the Companies Act (e.g. Constitution, annual returns and financial statements). In addition, certain registers must be maintained by companies and made available for inspection by the public.
There is no general legal obligation on a target company to disclose due diligence information. However, in the case of a target subject to the Rules, where there is a competing bidder, the target must, if specifically requested by a bidder, give the same information as it provided to the competing bidder, subject to certain limitations.
Brazilian listed companies must disclose periodic and non-periodic information. Both are disclosed through electronic systems by the CVM and the local stock exchange (BMFBovespa). The most important periodic information are of course the financial statements. However, Brazilian companies are also obliged to disclosed and regularly update a standard form, called FR (formulário de referência), which is similar to the US 20-F. The bylaws and minutes of shareholders’ meetings and board of director’s meetings are also available to the general public. Non-periodic information is disclosed to material facts, which are essentially notices to the general publics about facts, acts or omissions of the management and/or affecting the business of the company that may influence the decision of shareholders to buy, sell or maintain shares of the company. A pretty satisfactory due diligence may be implemented through these documents. Truth is, however, that M&As in Brazil usually include and required a deeper level of scrutiny. Buyers, sellers and sometimes the target company hence usually execute NDAs and set up data rooms with information which is not generally available in the context of the negotiations.
As regards the M&A transaction involving private and public companies in Cyprus, the publicly available information are the information maintained by the Registrar of Companies and Official Receiver in Cyprus (the “ROC”) in its public records. Those include, inter alia, the memorandum and articles of association of the company, the members of the board of directors, the secretary of the company, the share capital and shareholding structure of the company as well as other information including the annual accounts of the company as these are submitted annually to the ROC.
In the context of M&A transactions involving listed companies in the Cyprus Stock Exchange, certain information can be found via the official portal of the Cyprus Stock Exchange. Indicatively, that information includes, inter alia, information regarding the directors and secretary of the company, industry and sector specific details as well as information contained in the annual reports and semi-annual results of the company.
It must be noted, however, that the aforesaid information might not up to date, hence it is highly advisable that the disclosure of information in such cases is usually based on a specific agreement between the relevant parties.
Other than the information that is publicly available (in the public records of the company with the ROC or the Cyprus Stock Exchange, if the said company is listed), the target company’s board is not obliged to disclose any diligence related information to a potential acquirer. Especially, in the case of a hostile bid it is unlikely that such information will be made available to the potential acquirer.
It must further be noted that, pursuant to section 10 of the Concentrations Law, the CPC publishes in the Official Gazette of the Republic of Cyprus a notice of receipt of a notification of a concentration of major importance specifying (i) the identities of undertakings concerned; (ii) the nature of the concentration and (iii) the economic sectors involved. The CPC, in doing so, “takes into account, where possible, the legitimate interests of the undertakings concerned to safeguard their trade secrets”. Section 48 of the Concentrations Law also further safeguards trade secrets and other confidential information communicated to them by providing that such information must not be disclosed unless the disclosure is made (i) in order to prove breach of the law or (ii) for the purposes of enforcing the provisions of the law.
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.
Public companies in the U.S. are generally required to file annual and quarterly reports with the SEC. Among other things, these reports provide a description of the company’s business, summaries of material events (including legal proceedings), selected financial information and financial statements (which are fully audited, in the case of annual reports) and management’s discussion and analysis of the company’s financial condition and results of operations. Public companies are also required to file reports on Form 8-K with the SEC to report certain events, including entry into material definitive agreements, acquisitions or dispositions of businesses or significant amounts of assets and changes of control. Public companies generally must also file proxy statements providing information regarding the shareholder meeting to which they relate, the matters to be voted on by the shareholders at such meeting and what the company’s recommendation is with respect thereto, and other information relating to the company such as a description of the board of directors and its committees, executive and director compensation and ownership of the company’s securities by directors, officers and large shareholders.
When seeking shareholder approval of a transaction, targets must also make additional information available to their shareholders, such as the background and reasons for the transaction and summaries of the financial analyses of its bankers. Targets typically also disclose to their shareholders projections made available to the buyer in such situations.
Beyond what companies are required to file with the SEC, a great deal of information is publicly available on company websites and from industry and trade publications and news sources. Except in very limited circumstances, filings with the SEC are publicly available through the SEC’s EDGAR website.
A target company has no general obligation to disclose diligence information to a potential acquirer. However, a target company’s board of directors must balance the absence of any such affirmative obligation with its fiduciary duties to its shareholders. In certain circumstances, such as where a change of control is inevitable, it is possible that refusing to provide information to potential suitors could constitute a breach of those duties. If a target company does elect to provide bidders with information, there is no specific requirement that they provide all bidders or potential bidders with the same information, although a board choosing not to do so would need to have a legitimate rationale for providing differential levels of information to bidders and potential bidders.
With respect to private companies, all information registered with the Swedish Companies Registration Office is publicly available. This information includes, e.g., the members of the Board of Directors, the Managing Director, other signatories, share capital, number of shares and warrants issued. Also, the annual financial statements become available through the Swedish Companies Registration Office’s register after they have been adopted and filed. There are separate public registers for ownership of and encumbrances over real estate and business mortgages. Further, information on companies with Swedish authorities is generally available under the Swedish Public Access to Information and Secrecy Act. In addition to the above, publicly listed companies are also subject to an ongoing disclosure obligation pursuant to the relevant securities law and stock exchange regulations.
With respect to publicly listed companies, the Board of Directors of the target company is to resolve whether they consider an offer to be of serious nature, and, if so, whether the Board of Directors should allow a potential offeror to receive detailed information for due diligence purposes. However, it can be noted that the target Board of Directors is in all situations obligated to act in the best interest of the shareholders of the target company. The Swedish Takeover Rules require that the due diligence exercise is equally applied among potential offerors. As a result, the target Board of Directors would normally have to disclose the same information to competing offerors, with the exemption of e.g. the case where an offeror is a competitor to the target company.
For privately-held companies, their constitute documents and audited financial statements are available to the public and copies thereof may be obtained from the SEC. In addition, they are required to annually file a General Information Sheet with the SEC, which contains information on, among others, the corporation’s directors, officers, shareholders and their shareholdings. The GIS is likewise available to the public.
For public corporations, an even greater amount of information is available to the public. They are required to, among others, file annual and quarterly reports with the SEC and the Philippine Stock Exchange. These reports provide, among others, a description of the company’s business, summaries of material events and transactions, management discussions and analysis of the results of the company’s operations. These companies are also required to immediately disclose material events to the PSE. Copies of these corporation’s filings with the PSE are available for viewing and downloading at the PSE’s website.
A target company has no general obligation to disclose diligence information to a potential acquirer.
The following information in respect of a Guernsey company is available from the Guernsey Companies Registry:
- information on the Company including its registered office and the details of its directors and (if applicable) resident agent;
- an annual validation which must be filed by the end of February each year confirming information such as the directors of the company and whether the company has waived the requirement to hold AGMs or to be audited. The details contained within the annual validation should reflect the company’s position as at 31 December of the previous year;
- certificate of registration and memorandum and articles of incorporation; and
- any resolution requiring 75% or above shareholder approval, i.e. special, waiver and unanimous resolutions.
A search can also be undertaken at the Guernsey court to ascertain if any order has been made or proceedings commenced for the winding up of the company.
Shareholder details and annual accounts are not publicly available at the Guernsey Companies Registry. However, the Guernsey Companies Law sets out a procedure whereby a company’s register of shareholders may be inspected and/or a copy of the register may be obtained upon payment of a prescribed fee, provided the request is made for a proper purpose.
If the company is listed on an exchange, copies of its annual accounts, interim reports and regulatory news announcements can be obtained; the relevant rules of the exchange will apply.
If the Takeover Code applies there are certain requirements on provision of information.
Listed companies are required to make their annual and quarterly reports publicly available. Annual securities reports contain, among other things, (a) a narrative overview of the company and its business, (b) information concerning its material properties, (c) financial information and (d) other information of the company (e.g., information on its shareholders and officers).
On the other hand, the information on private companies that must be made publicly available is very limited. All Japanese companies (listed and private) are required to register certain fundamental information in their commercial registries, which are publicly available, such as the number of its authorized shares and issued shares, the names of its officers, any restrictions on share transfers, etc. Other than the information in their commercial registries or that is otherwise registered publicly, private companies are not required to make any other information publicly available.
Notably, the Japanese court system does not have a system or database that allows the public to search for pending court proceedings. Also, if a company registers its ownership of specific real estate or intellectual property, such ownership may be verified by reviewing the relevant registry; but, a person is not able to initiate a search on a system or database that would give such person a comprehensive listing of all real estate and intellectual properties owned by a specific company.
There is no legal obligation on a target company in Japan to disclose any specific diligence information to a potential acquirer. The target company has sole discretion as to what and how much diligence information it elects to disclose; however, target companies are usually cooperative when the transaction is amicable.
Isle of Man
Publically available information for a 1931 Act company includes:
- memorandum and articles of association;
- filed annual returns;
- details of current directors and shareholders;
- shareholder special resolutions;
- register of charges; and
The information publically available for a 2006 Act company is more limited but includes:
- memorandum and articles of association;
- filed annual returns; and
- registered agent details.
Other information may be available for both types of company through other sources such as public announcements issued by the target.
With regard to disclosure of information, save where the target is listed on a foreign stock exchange, in which case the rules of the foreign stock exchange will apply, there is no regime applicable for compulsory disclosure.
If the Takeover Code applies, a bidder will be entitled to receive, upon request, the same information that has been provided to a competing bidder.
The Companies Act 2001 makes provision for the public inspection of a company’s records upon service of a written notice being served on the company in this respect. The records that can be inspected are –
- the certificate of incorporation or registration of the company;
- the constitution of the company, if it has one;
- the share register;
- the full names and residential addresses of the directors;
- the registered office and address for service of the company; and
- copies of the instruments creating or evidencing charges which are required to be filed with the ROC.
The following information in respect of a Mauritius company is available from the Mauritius ROC:
- information on the Company including its registered office and the details of its directors;
- details of shares and shareholders;
- constitution; and
- details of charges granted over the assets of the company.
However, the above information are publicly available only in relation to domestic companies, whereas information on global business companies are available upon the written authorisation of the relevant company.
A search can also be undertaken at the Registry of the Supreme Court to ascertain if any order has been made or proceedings commenced for the winding up of the company.
Annual accounts of global business companies are not publicly available as these are filed with the FSC and searches at the FSC are not allowed.
If the company is listed on an exchange, copies of its annual accounts, interim reports and regulatory news announcements can be obtained.
If the entities are listed and the bid is a recommended bid, the target company may look to limit the scope of due diligence undertaken and, in particular, withhold sensitive financial and business information until it is clear the bidder has a genuine interest in proceeding with the transaction. Generally if the acquisition is by way of a hostile bid, the target company will not assist in providing due diligence information and any due diligence will be limited solely to information that is publicly available.
The following information is publicly available in Bermuda:
a) By way of a search of the entries and filings shown in respect of a Company in the Register of Companies at the offices of the RoC, which will include:
- the certificate of incorporation and memorandum of association;
- the address of the registered office;
- any prospectus or offer document required to be filed pursuant to the Companies Act;
- certain other filings required pursuant to the Companies Act, including any charges registered against the company under the Companies Act.
b) At the Registered Office of the Company, including the following:
- details of directors and officers on the register of directors and officers. The register of directors and officers is open for inspection during business hours (subject to such reasonable restrictions as the company may impose, so that not less than two hours in each day be allowed for inspection); and
- the register of members, which shall include the names and addresses of the shareholders, in the case of a company having a share capital, details of the number of shares held by each shareholder (distinguishing each share by its number so long as the share has a number), the amount paid up on the shares and the date on which the person was entered in the register of members as a shareholder. The register of members of a company is open for inspection during business hours (subject to such reasonable restrictions as the company may impose, so that not less than two hours in each day be allowed for inspection). It should be noted, however, that shares can be held by, and registered in the name of, a nominee.
c) If the company is listed on the Bermuda Stock Exchange (BSX), at the BSX. Such information will include any filings with or announcements to the BSX, including published accounts and auditors' reports.
At the Registry of the Supreme Court, the entries and filings shown in respect of the Company in the Supreme Court Causes Book. Such information will include any pending legal proceedings or judgments.
British Virgin Islands
Publicly available company information for companies incorporated in the BVI is available from two main sources (a) the Registry of Corporate Affairs and (b) the High Court. Information held by the Registry can be accessed via an online search which will grant access to the BVI company’s memorandum and articles of association, certificate of incorporation, details of its registered agent and registered office along with the company’s fee payment record and whether or not it is in good standing.
A recent amendment act that came into force in April 2016 requires companies to provide a register of directors to the Registrar however, unless they opt to do so it is not required for a BVI company to make this information publicly available. Similarly a register of public charges may also be published, however unlike a private registration, it is not mandatory for a BVI company to carry out a public registration of any charges over its assets. The private registers in relation to directors, shareholders and charges will only be released to a potential acquirer on the instruction of the target company’s client of record.
A high court search will reveal any proceedings currently filed against the target company.
The register of members of a Jersey company is available for inspection by any member and, for a fee not exceeding the prescribed maximum, any other person. A person may require a copy of the register, in the case of any company, on payment of a fee not exceeding the prescribed maximum and in the case of a public company on submission of a statutory declaration relating to the use of the copy. The annual return to the registrar of companies (available online) will include names, addresses and holdings of members (holding more than 1% of the capital/issued shares) together with the number of members holding less than 1% (and the total number of shares in such holdings) as at 1 January in each year or a statement that they have not changed since the last time they were submitted. In the case of public companies, the annual return will also show director details.
A public company or a company with more than 30 members (calculated in accordance with the Companies Law ) must deliver its accounts to the Registrar within 7 months of the end of the financial period to which they relate. These accounts will be publicly available. A private company is not required to make its annual financial statements publicly available.
A search of the Jersey Companies Registry will also show basic information on the company including its registered office, its incorporation documents, its memorandum and articles of association, prospectuses and any special resolutions filed.
Searches can also be made of public registers which show Jersey security granted by the company, land, bankruptcy (désastre) and litigation proceedings.
If the company is listed on an exchange, copies of its accounts, interim reports and announcements can be obtained.
Publicly held companies are subject to strict disclosure requirements. They are required to disclose on their websites their trade registry information, current shareholding structure, information on privileged shares, an up-to-date consolidated copy of the articles of association, financial statements, annual activity reports, general assembly meeting agendas, past disclosures to the stock exchange, remuneration and dividend distribution policies, and information on related-party transactions. Any information displayed on company websites must be continually updated. In addition, they are expected to use the Public Disclosure Platform (known as KAP) for other mandatory disclosures such as any “inside information” that relates to transactions or events that may influence the value of a company’s securities or the investment decisions of investors (KAP is a web-based platform that allows publicly held companies to electronically post disclosures in a timely, complete, and accurate manner and serves as an up-to-date database that is readily accessible by all stakeholders of a publicly held company.)
If the target is not publicly traded, then the amount of publicly available information will be less. Among privately held companies, only those that are subject to independent audit are required to put up company websites. For both publicly traded and privately held companies alike, any changes in the board or capital structure or amendments to the articles of association must be published in the trade registry gazette.
In a typical M&A deal, a target company usually provides all diligence related information to a potential acquirer subject to a confidentiality agreement between the two. Depending on the terms of the share purchase agreement, detailed disclosure from the target company may release the seller from liability claiming that the acquirer was already aware of all facets of the company. The only limitation on disclosure to a potential acquirer is any confidentiality agreements between the target company or seller and third parties, if the confidential contractual terms include trade secrets of the third party.
Generally, information in the financial statements of the target and other information filed at companies’ registry or otherwise publicly published will be available.
With regards to disclosure of information, save where the target company is listed on a stock exchange, there is no regime governing compulsory disclosure of information. The extent of disclosure in a transaction involving a listed company is curtailed by the need to ensure that “price sensitive information”/ information not publicly available are not shared during transactions or that the information, if shared, is not utilized for insider trading by the recipient or its advisers.
Publicly available information in general. Pursuant to the transparency regime governed by the Company Procedure Act virtually all relevant corporate information relating to companies registered in Hungary is publicly available either via the company registry or the corporate documents underlying the registered data. Such publicly available corporate information includes the members of the company’ management, the auditor, members of the supervisory board, signing rights (save for signing rights based on a separate power of attorney), registered seat, registered capital, bank accounts (but not the amounts placed there). In case of a limited liability company (Kft), information on the members of the company is also disclosed to public. In case of public or private companies limited by shares (a Zrt or Nyrt) this is limited to shareholders reaching at least 75 per cent of the votes. Changes to a Hungarian company’s articles of association are not only registered in the company register but also published in the so-called Company Gazette which is available on line.
The corporate documents underlying the above registered data, and the yearly financial reports of companies are also available to the public and can be accessed via online platforms operated by the Hungarian Ministry of Justice.
In addition, public registers will show detailed information on the company’s real estate, registered intellectual property and the status of credit collaterals owed or owned by the company. All of these registers can be accessed via electronic means.
Disclosure obligations of publicly traded companies Beyond the above, the Civil Code and the Capital Market Act prescribes further publication obligations for public companies limited by shares. Pursuant to the Civil Code, such companies are required to publicly disclose the minutes of each and every shareholders’ meeting and the resolutions made on such meetings. Under the Capital Market Act, public companies must also publish certain regular reports and may be required to publish extraordinary reports under certain circumstances. Accordingly, public companies must publish annual financial reports, further financial reports every six months, and also interim management reports, as well as further monthly reports regarding the voting rights related to the shares and regarding the company’s registered capital. In addition, listed companies must publish extraordinary reports anytime they become aware of information that could directly or indirectly influence the exchange rate or return of the shares, or may be otherwise important for market actors.
Due diligence. In must cases, due diligence is conducted (information is disclosed) with respect to the target company in accordance with the request of the potential acquirer. The transferring shareholder and the target company have to address such requests and disclose information in a way that the disclosed information should be true and correct. Should the provided information prove to be untrue or misleading either individually or in the context, the target company or the the transferring shareholders as the case may be would be held liable for the damage the acquirer incurs as a result of such untrue information. Amongst other cases, if the acquirer concluded the deal and the information provided in the due diligence later proves to be untrue or misleading, the transferring shareholder (and the target company, if applicable) will be subject to liability ex contractu, and consequences will be drawn in accordance with the transaction documents in the first place. That is, the acquirer may have warranty claims or damage claims or penalty claim as stipulated in the contract, as interpreted under the governing law. However, under Hungarian law, if in fact it was the misleading or untrue information that made the acquirer to conclude the deal, and the acquirer would not have entered the transaction if the true situation or information had been disclosed, or otherwise the untrue information pertained to an essential circumstance, and the mistake was caused or could have been realized by the other party, the acquirer may contest the contract (may invalidate the deal) alleging that it had been mistaken. In this case the status before the transaction must be reinstated if possible, and the damage incurred by the acquirer must be compensated according to the rules of liability ex delicto.