Luxembourg Takeover Law apects. Latest Update: March 2015

Transcription

1 Luxembourg Takeover Law apects Latest Update: March 2015

2 Definition of Takeover Type of offers Securities concerned Applicable Law According to the Law of 19 May 2006 transposing Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids ("the Takeover Act"), takeover means a public offer (other than by the offeree company itself) made to the holders of the securities of a company to acquire all or some of those securities, either mandatory or voluntary, which follows or has as objective the acquisition of control of the offeree company in accordance with Luxembourg law. A takeover bid may be either (a) voluntary, when any natural or legal persons intends to acquire the control of a company; or (b) mandatory if a control threshold (see criteria below) is reached. Securities falling within the scope of the Takeover Law are transferable securities carrying voting rights in a company, including for instance shares and depositary receipts. The Takeover Act applies to: All companies governed by Luxembourg law whose securities (i) are admitted to trading; or (ii) that have requested their admission to trading on a regulated market in one or more Member States; All companies governed by the laws of another Member State of the European Union or the European Economic Area whose securities are admitted to trading on a regulated market in Luxembourg; All offerors or persons acting in concert with an offeror or such a company and all other persons concerned. The Takeover Act does not apply to (i) takeover bids for securities issued by companies, the object of which is the collective investment of capital provided by the public, which operate on the principle of risk-spreading and the units of which are, at the holders request, repurchased or redeemed, directly or indirectly, out of the assets of those companies, (subject to exceptions); nor to (ii) takeover bids for securities issued by the Member States central banks. Other applicable laws/circulars to be considered also for takeover purposes: The Company Act of 10 August 1915, as amended (for Lux companies); Luxembourg Labour Law aspects (for Lux companies) The Transparency Act of 11 January 2008; The Law of 9 May 2006 on market abuse; The CSSF Circular n 06/258 on the coming into force of the law of 19 May 2006; 1

3 The CSSF Circular n 06/257 and the CSSF Circular n 07/280, as amended; and The CSSF Circular n 08/337, as amended. Competent Authorities The Commission de Surveillance du Secteur Financier (CSSF) is competent if: the offeree is a company governed by Luxembourg law and its securities are admitted to trading on a regulated market in Luxembourg; or the offeree is a company governed by the laws of another Member State and its securities were first admitted to trading on a regulated market in Luxembourg. If the offeree companys securities were first admitted to trading on regulated markets in different Member States simultaneously, the offeree company shall determine which of the supervisory authorities of Luxembourg or of these Member State shall be the authority competent to supervise the takeover bid by notifying those regulated markets and their supervisory authorities on the first day of trading. Control Threshold 1. Threshold foreseen under the Takeover Law 2. Application calculation actions en concert (limits and case law) 1. Article 5(3) of the Takeover Act provides that the percentage of voting rights which confers the control of the offeree company shall be determined by the rules of the Member State in which the offeree company has its registered office. 2. For Luxembourg companies such threshold is 33 1 / 3 %. The threshold calculation undertakes securities acquired by natural or legal person or/plus the acquisition by persons acting in concert with him/her. The notion of persons acting in concert is defined by the Takeover Act as "natural or legal persons who cooperate with the offeror or the offeree company on the basis of an agreement, either express or tacit, either oral or written, aimed either at acquiring control of the offeree company or at frustrating the successful outcome of a bid." An exemption to launch a takeover bid applies for market makers (by law) and for placement agents (confirmation to be received by the CSSF upon request under the condition that the voting rights are suspended). Derogation granted by the CSSF 1. Criteria retained 2. Derogation Procedure Provided that the general principles of the Takeover Act are respected, the CSSF is authorised, in the field of competence defined by this law, not to apply, in particular circumstances, the provisions of certain articles of the Takeover Law, based on a duly motivated derogation request. 2

4 Announcement 1. Timing 2. Content 1. First step - The offeror must inform the CSSF of its intention to make a public takeover bid before making such decision public. Second step - The offeror must write an offering document (the "Prospectus") in due time, including information which should enable the holders of the offeree company's securities to reach a properly informed decision on the bid. 2. The offer document shall contain at least: i. the terms of the bid; ii. iii. iv. the identity of the offeror and, where the offeror is a company, the type, name and registered office of that company; the securities or, where appropriate, the class or classes of securities for which the bid is made; the consideration offered for each security or class of securities and, in the case of a mandatory bid, the method employed in determining it, with particulars of the way in which that consideration is to be paid; v. the compensation offered for the rights (which might be removed as a result of the breakthrough rule laid down in the Takeover Act); vi. the maximum and minimum percentages or quantities of securities which the offeror undertakes to acquire; vii. details of any existing holdings of the offeror, and of persons acting in concert with him/her, in the offeree company; viii. all the conditions to which the bid is subject; ix. the offerors intentions with regard to the future business of the offeree company and, in so far as it is affected by the bid, the offeror company and with regard to the safeguarding of the jobs of their employees and management, including any material change in the conditions of employment, and in particular the offerors strategic plans for the two companies and the likely repercussions on employment and the locations of the companies places of business; x. the time allowed for acceptance of the bid; xi. where the consideration offered by the offeror includes securities of any kind, information concerning those securities; xii. information concerning the financing for the bid; 3

5 xiii. the identity of persons acting in concert with the offeror or with the offeree company and, in the case of companies, their types, names, registered offices and relationships with the offeror and, where possible, with the offeree company; xiv. the national law which will govern contracts concluded between the offeror and the holders of the offeree companys securities as a result of the bid and the competent courts. The decision to make a public takeover bid shall be announced to the public in a national newspaper as soon as it has been taken. Information of employees 1. Timing 2. Position Taking Position Taking of the board of the Target 1. Timing 2. Type of Announcement Content of the offer 1. Cash 2. In Kind 3. Combination of both As soon as the bid has been made public, the board of directors of the offeree company and of the offeror shall inform the representatives (instances de représentants de travailleurs) of their respective employees or, where there are no such representatives, the employees themselves. Employees' representatives shall be involved by the boards of directors in the analysis which leads to the drawing up of an opinion on the bid. Employees' representatives may issue a dissident opinion, especially regarding the effects of the bid on employment, which have to be enclosed to the opinion of the board itself. However, the employees' representatives opinion is not binding on the board. The board of the offeree company shall draw up and make public a document setting out its opinion on the bid, including its views on the effects of implementation of the bid on all the companys interests and specifically employment, and on the offerors strategic plans for the offeree company and their likely impacts on employment and the locations of the companys places of business. Ideally this opinion is published before the beginning of the offering period. The offeror may offer securities, cash or a combination of both. If the offer made by the offeror does not consist of liquid securities admitted to trading on a regulated market, it shall include a cash alternative. The liquidity of the securities of the offeror is deemed sufficient if at least 25% of the subscribed capital of the offeror represented by this class of securities are distributed to the public or where, due to the large number of securities of a same class and the extent of their spread in the public, a regular functioning of the market can be ascertained through a lesser percentage. In any event, the offeror shall offer a cash consideration at least as an alternative where he or persons acting in concert with him, over a period beginning twelve months before the bid and ending when the offer closes for acceptance, has purchased -for cash- securities carrying 5% or more of the voting rights in the offeree company. 4

6 Valuation The highest price paid for the same securities by the offeror, or by persons acting in concert with him, over a period of twelve months before the bid shall be regarded as the equitable price. If, after the bid has been made public and before the offer closes for acceptance, the offeror or any person acting in concert with him purchases securities at a price higher than the offer price, the offeror shall increase his offer so that it is not less than the highest price paid for the securities so acquired. Offer Period 1. Minimum Offer Period 2. Extension 3. Competing Bid 1. The time allowed for the acceptance of a bid may not be less than two weeks nor more than ten weeks from the date of publication of the offer document. 2. The period of ten weeks may be extended under condition that the offeror gives at least two weeks notice of his intention of closing the bid. The CSSF may grant a derogation from the period in order to allow the offeree company to call a general meeting of shareholders to consider the bid. Where the offeror acquires control of the offeree company, the holders of securities that have not accepted the bid until the closing of the offer acceptation period have the opportunity to accept this offer within 15 days, except in the case of a mandatory offer If a competing bid is made, the acceptance period of the initial bid shall be automatically extended and shall expire at the end of the acceptance period of the competing bid. Announcement of Results Approval Process Defensive Measures The offeror must publish the number of securities and the related number of voting rights for which its offer has been accepted or which it owns in one way or another, or which are owned by persons acting in concert with it. The CSSF as a competent authority will review and comment on the announcements and the draft offering document. Companies subject to the Takeovers Act have the possibility to decide whether the board of directors shall remain neutral during a takeover bid and whether anti-takeover measures (other than seeking alternative bids which is always possible) shall be subject to the prior approval of the extraordinary general meeting of shareholders which shall be reflected in their articles of incorporation. In the absence of such provision, the board of directors of the offeree company can implement defensive measures such as the so-called "poison pills" (such as recapitalisation, share repurchase agreements, issuance of share to a "friendly" investor, sale of the most attractive assets, etc.) without the prior approval of the general meeting of shareholders. 5

7 Squeeze-out 1. Criteria 2. Procedure The Takeovers Act introduced a right to squeeze-out (retrait obligatoire) for majority shareholders. A shareholder that has become the majority shareholder following a mandatory takeover bid may, if he holds not less than 95% of the capital carrying voting rights and not less than 95% of the voting rights of the offeree company, require the minority shareholders to sell him its securities at a fair price (within the meaning of the Takeover Act). Such action shall be made within the 3 (three) months following the end of the acceptance period. The CSSF shall ensure that a fair price. Sell-out 1. Criteria 2. Procedure The Takeover Act introduced a right to sell-out (rachat obligatoire) for minority shareholders. The minority shareholders may require the offeror to buy their securities from them at a fair price (within the meaning of the Takeover Act) where, following a takeover bid, the offeror has acquired the securities of the offeree company representing more than 90% of the voting rights. Such action shall be undertaken within the 3 (three) months following the end of the acceptance period. The CSSF shall ensure that a fair price, taking the same form as the consideration offered in the bid or being in cash, is paid. For any questions, please contact either: Josée Weydert Banking & Finance Partner T / E. josee.weydert@nautadutilh.com Margaretha Wilkenhuysen Corporate Partner T / E. greet.wilkenhuysen@nautadutilh.com Jad Nader Banking & Finance Counsel T / E. jad.nader@nautadutilh.com Romain Sabatier Corporate Partner T / E. romain.sabatier@nautadutilh.com This publication contains general information on current and upcoming legal issues and is not intended to be comprehensive or to constitute legal advice. It does not create a lawyer-client relationship. No rights whatsoever can be derived from this publication. NautaDutillh Avocats Luxembourg S.à r.l. is not liable for any damage which may arise as a result of any incorrectness or incompleteness of the information included in this publication. This publication does not suggest that NautaDutilh Avocats Luxembourg S.à r.l. or any of its lawyers are practising law of any jurisdiction other than Luxembourg. Should you require any legal assistance regarding any of the topics addressed herein, please contact NautaDutilh Avocats Luxembourg S.à r.l.. 6