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 (3rd edition)
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.
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.
Publicly available information will depend if the target company is a publicly traded company or a privately held company. In this regard (i) for the first case (publicly traded companies), periodic information required to be revealed (including annual audited financial statements) together with other material information will be available to the public, and (ii) for the second types of companies (privately held companies), basic corporate information will be available to the public (including name of directors and officers, amount of capital, name of quotaholders (if the type of company is a limited liability company) and audited financial statements (depending on certain types of companies).
In addition, in a public tender offer the offeror will need to disclose specific information related to the transaction, such as the minimum and maximum shares the acquirer is willing to acquire, the price, information on the methodology used to valuate the shares, among others. However, no material information will be required to be disclosed on the target company, other than specific facts of such entity such as the name and principal place of business of the Company. In privately held companies, no disclosure is required.
A main source of information is the Commercial Court Registry (sudski registar Trgovačkog suda) with all relevant historic corporate data, including the company registered name, legal form, personal identification number (PIN), address of the registered seat, branch offices and their registered seats, scope of business activities, share capital and its changes, founders/shareholders, management and supervisory board members, past statutory corporate transactions, annual financial reports and occurrence of liquidation or insolvency proceedings.
Other regular public sources of information are:
- Real Estate Register (Gruntovnica), containing basic information on real property
- Intellectual Property Office (Zavod za intelektualno vlasništvo), containing information on domestically registered intellectual property rights
- Depository held by the Central Depositary Agency (Depozitorij Središnjeg klirinškog depozitarnog društva), containing information on dematerialized securities
- Register of Encumbrances over Movables (Upisnik založnih prava na pokretninama), held by the Croatian Financial Agency (FINA), containing information on encumbrances over shares in limited liability companies
- Zagreb Stock Exchange (Zagrebačka burza), containing overall business and financial information on listed companies.
Despite regulations requiring public companies to make regular periodic and ad hoc disclosures, the publicly available information on numerous Croatian public companies is quite limited. In a negotiated transaction, therefore, it is common for the majority shareholder of the target to provide extensive information about the target, either directly or by encouraging the target to do so. Provided that the target’s management is willing to make the disclosure (note that the majority shareholder cannot force the target to do so), the bidder can obtain very extensive information about the target.
As a rule, the management of a target company is not legally obliged to disclose due diligence related information to a specific purchaser / bidder, but it can decide to do so based on its business decision. The disclosure of business information to a potential acquirer is permissible if and to the extent it does not impair the interest of the target company. When making this business decision, the management must evaluate the company’s interest arising from the potential bid, on one hand, and the necessity to secure confidentiality of the company’s business affairs, on the other hand. In case of competing takeover bids, the management of the target company must treat each competing bidder equally if information is disclosed.
Note that a bidder must take care not to violate the insider trading provisions contained in the Croatian Securities Market Act. After receiving unpublished material insider information from the target, the bidder is not allowed to purchase or dispose of any shares of the target on the basis of such insider information.
The information of the companies that is publicly available are the financial statements; of tax compliance and of compliance with the control bodies; amount of income tax paid; information about lawsuits in which the company is a prosecutor or defendant.
There are no specific law provisions as to the obligation of the Target Company or shareholders to provide diligence-related information to a potential acquirer.
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 (Ediktsdatei).
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 maximize the offer price in the shareholders’ interest).
The companies are legally required to make available and publish certain information on its own website. Further information publicly available from the commercial register includes inter alia articles of association, details on the business certificates, companies’ bodies, shareholders, financial statements, reports on group companies relations, transformation projects and others incl. the historical data. The information on companies’ assets may be available via publicly accessible registers, including the land register, register of intellectual property rights, register of pledges.
As for the exchange of information during the M&A process, the members of the executive bodies shall reflect the best interests of the company and must balance the necessity to keep the company's affairs confidential. With respect to the information that may be sensitive from a competition perspective between the competitors, Czech competition law has no special provisions and/or case law; therefore, general rules in line with European law and practice apply: the exchange of information during the due diligence should be restricted to the minimum that is required for the purchaser to evaluate the target. In case sensitive data (in particular regarding pricing) needs to be exchanged, it is advisable to provide such information to a clean team only. A clean team can be composed either only of external advisors or of representatives of the buyer who do not have a direct influence on the business conduct and pricing policy.
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.
Publicly available information in the Cayman Islands is limited to the company name, registration number 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.
There is no general obligation on a target company to co-operate or disclose diligence related information to a potential acquirer, although the directors of the target company must be mindful of their fiduciary duties.
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.
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 their websites and from the website of the Athens Exchange, if they are listed; from their annual financial statements; the annual reports of the BoD; the articles of association; from reports filed with supervisory and regulatory authorities, from market and sector reports, 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 specifics 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.
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.
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.
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.
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.
Under the MCL, any person may obtain an extract of the corporate information of a registered company from Dica’s electronic register, called MyCo, on payment of the prescribed fee. Dica published Notification No 57/2018 on 9 July 2018 setting out its filing fees, including the fees to request an extract of the corporate information of a company.
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.
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.
Publicly traded companies are obligated by law to publish relevant information to the market under the supervision of the Superintendency of Securities Market. This information is publicly available and is mainly of two types: relevant events and financial information.
The relevant events are defined in the Regulation of Relevant Events and Reserved Information, approved by Resolution SMV N° 005-2014-SMV/01, as every act, decision, agreement, negotiation in progress or information related to the publicly traded company, its securities or its business operations, that can influence significantly in the decision of an investor to buy, sell or keep securities or could influence in the price of the securities issued.
The financial information is composed of the annual memory report and the audited financial statements, as well as the relevant information of the economic group of the listed company, as defined in the applicable legal framework.
In the case of non-public companies, the information will be disclosed as part of negotiations and due diligence process.
A company’s Articles of Incorporation (AOI), By-Laws, Audited Financial Statements (AFS), and General Information Sheet (GIS) are publicly available at the SEC. Publicly held companies are obligated to file annual and quarterly reports and other disclosure with the SEC and the Philippine Stock Exchange (“PSE”) which are readily accessible.
As a general rule, a target company has a good faith requirement to disclose material information to a potential acquirer. This obligation gives a potential acquirer the right to demand production of all information pertaining to the target company, except those considered by law as confidential such as proprietary information and trade secrets.
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.
Depending on the type of company, there may be publicly available information in respect of the identity of the company’s shareholders and UBOs, their shareholdings in the company, the company’s annual accounts, by-laws, complete legal name, registered office, taxpayer number, share capital, identity of the members of its corporate bodies and duration of their tenures.
Information about any past or ongoing structural corporate events will also be available, such as mergers, demergers, transformations, dissolution, winding-up or insolvency.
The creation, existence and cancelation of certain encumbrances over the company’s shareholdings and assets, as well as certain legal proceedings against the company may also be subject to registration and publication.
In private M&A deals, the target is not under the obligation to disclose any non-public information about it and its business. Information is usually disclosed in the context of M&A processes in strict collaboration between the target and the parties.
In public M&A deals, all (other) price-sensitive information is subject to disclosure to the market through the CMVM. There are certain circumstances where such disclosure may be delayed but never waived. Accordingly, due diligence is based on publicly disclosed information.
Should the management of a publicly traded company agree to disclose inside information to a potential bidder, it needs to inform the CMVM of this fact. The CMVM may then decide to force the company to release such information to the market or order the suspension of trading of the company’s shares until it informs the market of the ongoing negotiations.
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.
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, issuance and termination of permits (licenses) for specific activities, 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/). Importantly, public disclosure in the Internet of information in relation to sanctioned Russian parties is substantially limited.
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).
In addition, certain information on litigations in which a target company participates in any status can be obtained from the Russian courts’ web database at https://sudrf.ru/ .
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.
A target company is not obliged to give a bidder the right to conduct a due diligence exercise. However, if a target company does allow a potential offeror the right to conduct a due diligence exercise and provides information to the potential offeror, in terms of the Takeover Regulations, the target company must, on request, give the same information equally and as promptly to a less welcome, but bona fide, offeror or potential offeror. Where no information is given by the target company and no information can be obtained from the target company in terms of the equality of information provisions, only information available to the general public concerning the target will be obtainable. This includes:
6.1. The target company’s memorandum of incorporation.
6.2. The target company’s share register (including details of the company’s share capital and shareholders).
6.3. Directors’ details.
6.4. Any prospectus or circular previously published by the company.
6.5. The target company’s annual financial statements and interim report.
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.
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.
For limited liability companies, only certain information is publicly available, for example, its audited financial statements, constitutional documents, such as its memorandum and articles of association, as well as the key information on shareholders, directors, registered office(s) and share capital of the company. In addition, basic information on the registered intellectual property is also available to the public. Basic information relating to business security has also been publicly available since 2018. With regard to litigation searches, the Thai court system has a database that allows the public to search as to whether the target company is a first defendant or plaintiff in any litigation proceedings at these particular courts.
However, there is no statutory obligation requiring a target company to disclose any specific diligence information to a potential acquirer. This is negotiated on a case-by-case basis.
Listed companies in Thailand are generally required to disclose the following information and make it available to the public:
- corporate information, such as registered office(s), main shareholders’ names, directors’ names, memorandum and articles of association of the company in Thai and certain documents in English;
- quarterly reviewed and annually audited financial statements in both Thai and English;
- annual registration statements containing updated business information in Thai;
- annual reports in both Thai and English; and
- public filings upon the occurrence of certain material events in both Thai and English.
Like private companies, the target company is not obliged to disclose due diligence-related information to a potential acquirer. If a potential acquirer wishes to acquire more in-depth information, this will be negotiated on a case-by-case basis. In addition, the target's board of directors may be prepared to provide confidential information to the bidder and any competing bidders with a view to maximizing the offer to shareholders. Doing so would be in line with the directors' general obligations under the Public Limited Companies Act to act in the best interests of the company. Moreover, such disclosures may be made despite the restrictions outlined in both the Securities Act and the SEC's Rules regarding the disclosure of price-sensitive or 'insider' information. However, the following factors would need to be carefully considered when determining what information is to be disclosed:
- whether the information is market-sensitive such that its disclosure may constitute a criminal offence under Thailand's insider trading laws in the case where the bidder subsequently buys shares or makes an offer in reliance on such information;
- whether the information is commercially sensitive; and
- whether such information would normally only be disclosed on a confidential basis to persons with whom the target is negotiating and who have signed confidentiality undertakings.
In the UAE, there is no centralized company register. However, it may be possible to obtain basic corporate information (the trade licence or industrial licence) from the Department of Economic Development website of the emirate in which the company is registered, provided you know the name of the company. The company’s trade licence will show who the company’s shareholders are and for some emirates it will show the general manager and directors of the company.
Moreover, Al Etihad Credit Bureau ("AECB"), a federal government company which operates a credit reporting system across the UAE, will be able to provide credit reports on companies provided that the original Emirates ID card of the company’s owner or authorized signatory is submitted along with the trade licence and articles of association of the company.
Since there is a lack of publically available information on companies in the UAE, the target company’s cooperation is relied upon in order complete the due diligence. The parties tend to enter into strict confidentially agreements for the target company to share information.
Under UAE law, the following actions are not permitted:
(a) the provision of false information, statements or data that could affect the market value of securities and an investor’s decision on whether to invest; and
(b) the exploration of undisclosed information to achieve personal benefit that could affect the price of securities.
With regards to target companies in the DIFC that are listed on NASDAQ Dubai, if a bidder, the target or any persons acting on behalf of a bidder or the target deals with securities during the bid period, this must be disclosed to the DFSA.
There are currently no obligations to disclose information to any potential acquirer.
If the target is a listed company then there will be significant information publicly available, since all listed companies are required to make various disclosures pursuant to the SEBI (Listing Obligations and Disclosure Requirements), Regulations including information regarding all material information and events such as acquisition, sale or disposal of any a unit, division(s) or subsidiary of the listed entity or any other restructuring issuance or forfeiture of securities, split or consolidation of shares, buyback of securities, any restriction on transferability of securities or alteration in terms or structure of existing securities including forfeiture, reissue of forfeited securities, alteration of calls, redemption of securities, revision in ratings, outcome of meetings of the board of directors related to dividends and/or cash bonuses recommended or declared or the decision to pass any dividend and the date on which dividend shall be paid/dispatched; the decision on buyback of securities; the decision with respect to fund raising proposed to be undertaken, financial results; and all information having a bearing on the performance, operations and/or price sensitive information.
As far as a potential acquirer is concerned, the extent of diligence related information would depend on the contractual obligations between the acquirer and the target. However, no unpublished price sensitive information can be disclosed by the target unless the acquirer is bound by a non-disclosure agreement, and the board of directors of the target is of the informed opinion that the disclosure of such information is in the best interest of the target. Further, such information may be disclosed only if it is in connection with a substantial transaction, which would entail an open offer, or if such information is disseminated and made generally available, at least two trading days prior to the proposed transaction being effected.
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:
(i) 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:
(ii) 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:
(iii) 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:
(iv) 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 COV:
(v) 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).
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 different levels of information to bidders and potential bidders.
From publicly available sources (including websites of governmental authorities), PRC investors can easily find general information concerning a PRC company, such as shareholding structure, corporate history, administrative penalties, on-going and concluded litigation and enforcement procedures, intellectual property registrations and filings, etc. Public companies are also required to publicly disclose their audited financial reports and other financial information periodically, as well as material information per the listing rules and disclosure requirements of the stock exchanges. Other than this, a target company is not generally obliged to disclose any diligence information to a potential acquiror. It is customary, however, for an acquiror to request a target company to provide as much information as possible during due diligence (typically subject to the signing of a non-disclosure agreement with the target company).
Publicly available information in relation to a target company that is not listed may be found in: (i) a company’s commercial register; a public document containing, among other information, the company’s name, principal office, branches, authorized and issued capital, duration, address, board members and their authorities as well as information regarding the existence of a fonds de commerce mortgage, and (ii) a company’s articles of association and statutes that are published in the Investment Bulletin. Both documents are in the Arabic language.
As for a Publicly Traded Company, in addition to the commercial register and articles of association that are publicly available, minutes of board meetings, general shareholders meetings and financial statements are also publicly available since such documents are published by the EGX on its screens. Furthermore, public disclosures made by the Publicly Traded Company in accordance with applicable disclosure rules provide further information about the company.
There is no general legal obligation on a target company, whether or not listed, to disclose diligence related information to a potential acquirer. In practice, such information is provided following a resolution taken by the target’s board of directors to provide diligence material to the acquirer, or based on the majority shareholder’s instructions in the case of closed companies, in both cases upon signature of a NDA.
The following information in respect of a Guernsey company is available from the Guernsey Companies Registry (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 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.
An Offshore Listing Vehicle must comply with certain disclosure requirements pursuant to the Listing Rules including a requirement to disseminate 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.
Companies registered in England, Wales and Scotland are required to file documents at Companies House which are publicly available. For private and public companies, this will include its constitutional documents (i.e. its memorandum of association and articles of association), key information on its directors, statutory accounts, information relating to its share capital and certain resolutions passed by the members of the company. This information will, by its very nature, be historic.
Additional information will also be available in respect of listed companies which 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). 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.
There is no obligation for a target company to disclose diligence related information to a potential acquirer, however, it should be borne in mind that dishonestly concealing any material fact or if a person does so with the intention of inducing, or is reckless in doing so, to enter into an agreement amounts to a criminal offence. By disclosing information to a potential acquirer, subject to the terms of the agreement, this may limit the seller’s liability in respect of any breaches.
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.
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 online.
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 most 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 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.
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 QSE 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.
Some information relating to the target company will be publicly available within the Companies Register accessible on the website of the Agency of the Republic of Slovenia for Public Legal Records and Related Services (AJPES), for example information about the managing directors, authorized signatories, share capital as well as some corporate documentation for example the articles of association and certain general assembly resolutions. Annual reports of business entities are also publicly available on the website of AJPES. In case it is known that the target company owns certain real estate, it is also possible to obtain additional information from the publicly accessible land register.
The target company is not obliged to disclose diligence related information; however, this can be done voluntarily upon the decision of the management that is in the best interest of the company to achieve a better purchase price or to avoid potential warranty claims. Since the management is obliged to protect the business secrets of the company non-disclosure agreements are regularly used in practice when information is being disclosed to a potential acquirer.