France Takeover Guide

Transcription

1 France Takeover Guide Contact Youssef Djehane BDGS Associés

2 Contents Page INTRODUCTION... 1 KEY HIGHLIGHTS... 1 REGULATORY ISSUES... 3 PREPARING THE OFFER... 4 FILING AND CONDUCT OF THE OFFER... 7 SPECIFIC RULES RELATING TO MANDATORY OFFERS...10 SQUEEZE-OUT...12 DELISTING...12

3 INTRODUCTION This guide gives an overview of French law, as at May 2017, relating to public offers for securities in companies listed on the French regulated market Euronext Paris. The information provided in this guide may not be relied upon as legal advice. KEY HIGHLIGHTS Competent authority The French stock exchange authority, the Autorité des marchés financiers ( AMF ), is the competent authority to supervise a public offer and its regulations will apply when the target has its registered office: in France and its securities are traded on a French regulated market, even if the French market is not the lead market; in an EEA country other than France and the target is not listed in the country where its registered office is located, if the first EEA regulated market on which its securities were admitted to trading was France; in an EEA country other than France and the target is not listed in the country where its registered office is located, if its securities were first admitted to trading in more than one regulated market in the EEA simultaneously, including in France, and the target has designated the AMF as the competent authority; or outside the EEA and its securities are traded on a French regulated market. Where a target has multiple listings of its securities, including in France, both the AMF and another authority can be competent and multiple offers may be conducted in parallel. In the context of a public offer, it is possible to request formal rulings or, more frequently, informal positions from the AMF. The role of Euronext, which acts as market operator of Euronext Paris, is to centralize tender orders, suspend the listing of the target upon request by the AMF or the target, and organize settlement and delivery. Types of public offer French law distinguishes between voluntary offers, filed when the offeror has not acquired or increased a controlling interest in the target, and mandatory offers. The specific rules relating to mandatory offers are developed below. A public offer must be for the acquisition of 100% of the shares and securities giving access to the capital or voting rights of the target, except in the case of certain types of simplified offers. The consideration for a public offer can be cash, securities, or a combination of both. page 1

4 Principles governing offers To allow for an offer to be conducted in an orderly way in the best interests of investors and the market, all parties involved in an offer must comply with the following principles: free interaction of bids and counter-bids; equal treatment and right to information for all holders of targeted securities; market transparency and integrity; and fairness of transactions and free competition. Conditions to the offer Public offers are irrevocable upon filing and can only be made subject to the following conditions: all public offers include a 50% plus minimum mandatory acceptance condition expressed in capital or voting rights (corresponding to the majority for appointing board members, approving the accounts and distributing dividends) and may be conditional on Phase I antitrust clearance; and voluntary offers can be conditional on a higher minimum acceptance condition expressed in capital or voting rights (in practice, the highest minimum acceptance condition allowed by the AMF is 2/3, corresponding to the majority for amending the by-laws and issuing shares) and on the acceptance condition for another public offer filed simultaneously for a different target not being satisfied. It is possible for the bidder to waive these conditions during the offer period (i.e. from the date of filing the offer with the AMF until the date of announcement of the results of the offer). If the mandatory minimum acceptance condition is not satisfied in respect of a mandatory offer, the bidder will be deprived of its voting rights for the shares exceeding the threshold that triggered the mandatory offer at all shareholders meetings until the bidder comes to hold more than 50% of the share capital or voting rights of the target. In addition, if the mandatory minimum acceptance condition is not satisfied in respect of (i) a mandatory offer, or (ii) a voluntary offer filed by a bidder which holds between 30% and 50% of the share capital or voting rights of the target, the bidder must inform the AMF and file an offer for the target if it wants to increase its shareholding or voting rights in the target. Otherwise, the bidder will be deprived of its voting rights in respect of the shares exceeding its initial shareholding or voting rights. A public offer can be revoked by the bidder when: Price of the offer subject to approval by the AMF, the target adopts measures that modify its substance or result in the offer becoming more expensive for the bidder; or a competing bid has been filed and approved by the AMF. The AMF does not review the price or the exchange ratio of a voluntary offer, provided that it respects the general principles governing offers described above. However, when a fairness opinion is required, the AMF must examine the financial conditions of the offer on the basis of such fairness opinion as well as the opinion of the target board (taking into account the fairness opinion) and is unlikely to approve an offer if the expert does not consider it to be fair. page 2

5 The target must appoint an independent expert to deliver a fairness opinion, within at least 10 trading days, for public offers which are likely to raise a conflict of interest or interfere with the equal treatment of the holders of the targeted securities. Examples of such transactions include: a public offer filed by a controlling shareholder; a public offer with agreements between the managers, or the controlling shareholder of the target, and the bidder, which could affect their independence; a public offer with side transactions which could have a significant impact on the offer price or the exchange ratio; a public offer involving several categories of target securities; a public offer where the consideration is non-share securities; and a squeeze-out. Except in the above cases, the bidder and target are always free to appoint an independent expert. The price of a mandatory offer must be at least equal to the highest price paid by the bidder for the securities of the target over the 12 months immediately before the event triggering the mandatory filing of the offer. However, the AMF may require or authorize the bidder to modify the price due to a major change in the characteristics of the target or its securities market. In the case of an offer filed by a bidder already holding 50% or more of the share capital and voting rights of the target, the price of the offer must, unless an exemption is obtained from the AMF, be at least equal to the average share price, weighted by trading volumes, during the 60 trading days preceding the beginning of the pre-offer or offer period. Finally, in the case of a higher bid, a competing offer, or a squeeze-out, the price must comply with specific rules developed below. REGULATORY ISSUES Merger control National or EU merger control rules can apply in the context of a public offer in France. The filing of a public offer can be made conditional upon approval in Phase I by the relevant competition authorities (namely, the French Competition Authority or the European Commission, a national competition authority of an EEA member state, or the FTC or DOJ for the US) but will automatically lapse if any such authority decides to undertake a Phase II investigation. A derogation can be requested from the French Competition Authority or the European Commission allowing the parties to complete a takeover without having first received antitrust clearance, on condition that the transaction is fully notified to the authority following completion of the takeover and that the new shareholder does not fully exercise control over the target prior to clearance. In practice, if French or EU merger control issues are anticipated, pre-notifications are very often made prior to filing the offer. page 3

6 Regulation of foreign investments The prior authorization of the French Ministry for Economy and Finance is required for foreign investment in France in: for all foreign investors, sectors which may affect public order, public safety, certain public utilities (for instance, energy, water, transport and telecommunications), national defense or armaments; for non EEA investors only, in addition to the sectors listed above, gambling, private security, pathogenic or toxic agents and security IT products and systems. For both EEA and non EEA investors, investment is (i) the acquisition of control (whether direct or indirect) of a French company, or (ii) the acquisition (whether direct or indirect) of all or part of a business/assets of a French company. For non EEA investors, an investment is also the crossing of the threshold of 33.33% of the capital or voting rights of a French company. The request for authorization must be filed at the latest on the date on which the offer is filed with the AMF. The French Ministry for Economy and Finance must deliver its decision within 2 months from the date of receipt of the request, failing which the authorization is deemed to have been granted. The opening of the offer is subject to obtaining such authorization. It is also possible to request a ruling from the French Ministry for Economy and Finance (which must reply within 2 months) regarding whether the investment requires the French Ministry for Economy and Finance s prior authorization. In practice, the request for a ruling and the request for authorization are often made together. Authorization may be granted under specific condition(s) aimed at protecting French national interests, such as: guaranteeing the continuity of certain activities; non-closure of industrial sites; guaranteeing the fulfillment of obligations arising under certain types of public contracts; or the transfer of a business or management to French nationals. Any such condition(s) must respect the principle of proportionality, i.e. the condition(s) imposed must be proportional to the objective. Carrying out a transaction without the French Ministry for Economy and Finance s prior authorization or in violation of the conditions to such authorization can lead to the French Ministry for Economy and Finance cancelling or modifying the transaction and imposing heavy fines and can result in criminal charges. PREPARING THE OFFER Constraints on stake building before the beginning of the pre-offer period Prior to the pre-offer period (which runs from the date of announcement of the offer by the bidder to the date of filing the offer with the AMF), a potential bidder may stake build (including via equity derivatives) but any such stake building needs to be carefully reviewed beforehand so as to avoid breaching disclosure requirements, insider dealing rules and the principle of equal treatment of shareholders. page 4

7 If a potential bidder has access to inside information relating to the target, it cannot trade in the target's securities. Shareholdings or voting rights exceeding certain thresholds (5%, 10%, 15%, 20%, 25%, 30%, 1/3, 50%, 2/3, 90% and 95%) must be disclosed to the AMF and the target within 4 trading days. Such disclosures are in turn disclosed to the market by the AMF. Targets can have by-laws requiring additional disclosure to the target, in a timeframe set out in the by-laws, for crossing incremental thresholds between 0.5% and 5% of the share capital or voting rights, but not lower than 0.5%. Such additional disclosures are not required to be disclosed to the AMF and the public, but the target can choose to do so. Crossing upwards a threshold of 10%, 15%, 20% or 25% of the share capital or voting rights requires the acquirer to make disclosure within 5 trading days to the AMF and the target in relation to its position on a number of matters for the following 6 months, including regarding whether the acquirer is acting alone or in concert with other parties, whether they intend to stop the stake building or to pursue it and acquire or not the control of the target, the strategy they have for the target and the manner in which such strategy will be implemented and whether they intend to request their appointment or that of one or more persons as director(s) of the target. Such information is disclosed to the public by the AMF. If, over the 12 months preceding the filing of an offer, the bidder has purchased in cash securities giving right to more than 5% of the target s share capital or voting rights such offer must contain a cash option. Barriers to acquiring control It is common among groups of substantial shareholders to have preferential rights over the transfer of each other s shares, usually by way of a shareholders agreement. Any such rights in respect of at least 0.5% of the share capital or voting rights of the target must be disclosed to the target and to the AMF within 5 trading days, which will in turn disclose them to the public. Failure to disclose such preferential rights will render them invalid during the offer period. In addition, double voting rights are automatically allocated to shareholders of a listed company that have owned their shares in registered form for at least two years, unless otherwise provided in the by-laws of the company. The transfer of shares bearing double voting rights results in the loss of such double voting rights. Finally, the target s by-laws may limit the total voting rights available to each shareholder. However, the effect of any such limitation is, by law, suspended at the first shareholders meeting following the closing of a public offer when the bidder has acquired more than 2/3 of the target s share capital or voting rights (or, if the by-laws so provide, more than 50% of the share capital or voting rights). Access to information/due diligence An offer may not be conditional upon the findings of a due diligence review. The existence of the due diligence exercise, as well as any inside information disclosed to the bidder through the due diligence, must be disclosed in the offer circulars. By-laws, minutes of shareholders meetings, documents on corporate reorganizations and financial statements, as well as past prospectuses and annual reports are available in the public domain, without the target being alerted of a search. Listed companies are under a permanent obligation to make public as soon as possible information which directly concerns them of a precise nature which has not been made public, and which, if made public, would be likely to have a significant effect on the price of its securities ( inside information ). page 5

8 The company may, on its own responsibility, delay disclosure to the public of inside information in order to protect its legitimate interests, provided that such delay is not likely to mislead the public and the company is able to ensure the confidentiality of such information. The target may open a data room containing confidential information in the context of significant transactions to potential acquirers which have signed a letter of intent and a confidentiality letter. In the event of a competing offer, the target must provide access to the data room to the other bidder. In a friendly approach, the target may also request that the potential acquirer agree to a standstill provision. When a transaction is actively contemplated and inside information is disclosed to potential acquirers, all parties concerned must draw up an insider list which must be communicated to the AMF upon its request. Possibility of maintaining the secrecy of negotiations and of the preparation of the offer prior to filing There is no requirement for a bidder to notify the target or to disclose to the public that it is considering making an offer prior to filing such offer with the AMF, provided that confidentiality is temporarily necessary for the implementation of the transaction and can be maintained. Equally, subject to the same condition, there is no obligation for the target to disclose to the public that it has received an offer prior to the filing of the offer with the AMF, it being noted that the target is free to make an announcement in response to an offer received or any disclosure made by the bidder. If confidentiality can no longer be ensured (notably in case of a leak, mere rumors being usually dealt with by a no comments statement), an immediate public announcement setting out the characteristics of the offer must be made. Where there are reasonable grounds to believe that a potential bidder is preparing a public offer, particularly where the market of the securities of a target undergoes unusual changes in terms of volume and/or price, the AMF can ask such potential bidder to put up or shut up, i.e. to disclose its intentions to the public within a given time period. The bidder can either: disclose its intention to file an offer, in which case the AMF will set the date on which the bidder must issue a public announcement setting out the characteristics of the offer or the date on which it must file its offer; or announce that it does not intend to file an offer, in which case it will be precluded from doing so during the 6 months following such announcement, except in the event of significant changes affecting the environment, the situation or the shareholding of any concerned party, including the target. The fact of making such a public announcement, whether in response to a leak, at the request of the AMF or voluntarily, prior to filing the offer with the AMF does not constitute an offer, but opens a pre-offer period in which certain restrictions apply (standstill for the bidder). Undertakings from target / security holders The bidder can approach security holders of the target with a view to acquiring blocks or obtaining undertakings to tender their shares to the offer. Under French law, such undertakings are not irrevocable as they can always be revoked in the event such security holder wishes to accept a counter-offer and can include top-up mechanisms. page 6

9 To benefit from the market abuse safe harbor provided by the European Market Abuse Regulation (no. 596/2014) ( MAR ) for the lawful disclosure of inside information, the approach of security holders by the bidder must comply with the following conditions: (a) the information is necessary to enable the parties entitled to the securities to form an opinion on their willingness to offer their securities; and (b) the willingness of parties entitled to the securities to offer their securities is reasonably required for the decision to make the takeover bid or merger. Any approach of security holders by the bidder which does not comply with the above conditions would not benefit from the MAR market abuse safe harbor. The bidder can seek a break-up fee from the target. However, general principles on directors duties (i.e. to act in the target's interests and not to take any action that will prevent the filing of a counter offer) make break-up fees payable by the target limited in amount (generally to cover the transaction costs and in practice up to a couple of percent of the global amount of the transaction). In a friendly transaction, it is common practice for an agreement to be put in place between the bidder and the target covering the offer terms, conditions and process, as well as issues such as industrial strategy, labor, management packages, stock options, name of the combined entity, governance and location of its headquarters post-closing. Once an offer has been filed with the AMF, any undertakings concluded between the bidder, the target, their concert parties or their shareholders which are likely to have an impact on the assessment of the offer or its outcome must be publicly disclosed in the offer circulars or, should they be concluded after the AMF s clearance of these documents, in a press release immediately upon the conclusion of such undertakings. FILING AND CONDUCT OF THE OFFER Bidder announcement obligations The offer must be filed with the AMF by an investment services provider acting on behalf of the bidder and guaranteeing certainty of funds. The filing must contain the draft bidder offer circular and prior notifications filed with any authorities empowered to authorize the contemplated transaction. The draft bidder offer circular will include mainly: (i) the terms and conditions of the offer, (ii) the indicative timetable of the offer, (iii) the bidder s intentions regarding the target and its employees, and (iv) any undertakings relating to the offer. The draft bidder offer circular must be made public on the bidder s website and the AMF s website as soon as it is filed with the AMF. It must also be made available at no charge at the registered office of the bidder or, if the bidder is not French, at the registered office of an investment services provider in France appointed by the bidder for such purpose. The draft bidder offer circular must be sent upon request at no charge. The bidder must issue a press release setting forth the main terms of its draft bidder offer circular at the latest upon its filing with the AMF. The bidder must also publish a document detailing its legal, financial and accounting characteristics, at the latest the day before the opening of the offer. Target announcement obligations The target must file with the AMF a draft circular in reply (in practice in a friendly approach the target will file its draft circular in reply at the same time as the bidder files its draft bidder offer circular): page 7

10 where no fairness opinion from an independent expert is required, at the latest 5 trading days after the publication of the AMF s compliance decision and visa on the draft bidder offer circular; and where a fairness opinion from an independent expert is required, at the latest 20 trading days after the filing of the draft bidder offer circular. The draft circular in reply will include mainly: (i) the opinion of the target s governance body on the interest of the offer for the company, its employees and its shareholders, (ii) a statement of the intentions of the members of the target s governance body to tender or not their shares to the offer, (iii) the opinion of the workers council (if any), and (iv) the fairness opinion of the independent expert (if any). The target must release a press release setting forth the main terms of its draft target offer circular in reply at the latest upon filing the draft target offer circular in reply with the AMF. The target can also issue a press release setting forth the opinion of its governance body on the interest of the offer for the company, its employees and its shareholders, after the publication of the bidder s press release setting forth the main terms of its draft bidder offer circular. The target must also publish a document detailing its legal, financial and accounting characteristics, at the latest the day before the opening of the offer. AMF s compliance decision and visa on the offer circular and circular in reply Where the draft bidder offer circular and draft circular in reply have not been filed together, the AMF will publish its decision of compliance and visa on the draft bidder offer circular within 10 trading days of its filing and on the draft circular in reply within 5 trading of its filing. Where the draft bidder offer circular and draft circular in reply have been filed together, the AMF will publish its decision of compliance and its visa on both draft offer circulars within 5 trading days of their filing. In practice, the draft bidder offer circular and draft circular in reply will be filed taking into account the dates on which the AMF s board ( College ) meets, which is normally twice a month. Any interested party can appeal the AMF s compliance decision within 10 days before the Paris Court of Appeal which must render its decision within 5 months. Workers councils The bidder s workers council, if any, must be convened by the bidder s CEO immediately after the filing of the offer (in practice, within 2 business days following such filing). The target s workers council, if any, must be convened immediately after the filing of the offer (in practice, within 2 business days following such filing) by the target s CEO who informs the workers council if the offer is solicited or not and can indicate whether the offer is friendly or hostile. The target s workers council has no right to challenge or veto the offer, but is entitled to: invite the bidder to make a presentation to the meetings of the workers council (the bidder being deprived of its voting rights in the target until it attends such meetings); and appoint an expert to assist it in its review of the offer and to issue a report assessing all aspects of the offer within 3 weeks from filing of the offer. page 8

11 The target s workers council must be convened to provide an opinion on the offer within 1 month from the filing of the offer and before the target s board provides its own opinion on the offer. Such opinion, as well as the target s workers council s expert s report, must be reproduced in the target s circular in reply. The bidder must report to the target s workers council on how it has implemented its intentions regarding labor policy set out in its offer circular, 6, 12 and 24 months following the closing of the offer. Competitive offer and higher bid There are no requirements for a bidder to improve its offer, except in the case where the bidder and its concert parties purchase target securities during the offer period at a higher price than the offer price, in which case the offer price is automatically increased to the higher of 102% of the offer price and the price effectively paid for the securities. A competing offer may be filed with the AMF only after the opening of the first offer and at the latest 5 trading days before the closing of such first offer. A competing offer or higher bid will be approved by the AMF, where: in the case of a cash offer, the proposed price is at least 2% higher than the price of the previous cash offer; in all other cases, it presents a significant improvement on the terms and conditions of the previous offer; or the bidder removes or lowers the voluntary acceptance threshold of its offer without otherwise modifying the terms of its previous offer. The bidder can always propose a higher price than that of its previous offer or the last competing offer at the latest 5 trading days before the closing of its offer. Constraints on stake building after the beginning of the pre-offer period During the pre-offer period the bidder and its concert parties may not acquire target securities. During the offer period the bidder and its concert parties may acquire up to a maximum of 30% of the capital or voting rights of the target, provided that the offer is a full cash offer and is not conditional on antitrust clearance or on the acceptance threshold for a public offer filed simultaneously in respect of another target not being reached. If securities form part or all of the consideration for the offer, then during the offer period neither the bidder, the target nor their concert parties may trade in the target s or the bidder s securities. Any of the bidder, the target, their concert parties, their directors and all shareholders holding alone or in concert at least 5% of the share capital or voting rights of the target or having increased their stake in the target by at least 1% of target s share capital since the beginning of the pre-offer or the offer period, must disclose to the AMF, on a daily basis, transactions in the targeted securities. If the bidder s securities form part of the offer consideration, the same disclosure obligations apply to both transactions in the targeted securities and the securities of the bidder. Financial advisors acting for the bidder or the target will be subject to similar obligations, but may however continue normal arbitrage, market making and hedging activities, provided they comply with the relevant rules. page 9

12 Defensive measures The board of the target is always free to seek a white knight. The board of the target is also entitled to take, during the offer period, defensive measures to frustrate the offer, unless prior approval by the shareholders meeting is required by the target s by-laws (either in all cases or only when the bidder is itself prevented from taking defensive measures which could frustrate the offer without the approval of its shareholders meeting, i.e. the bidder is subject to the passivity rule ). If the target s by-laws limit the possibility for its board of directors to take defensive measures during the offer period, the target (and persons acting in concert with it) may not trade in the target s shares or in securities giving access to the target s shares. Issues of warrants ("Bons Breton"), rarely used in practice, can be authorized by the shareholders meeting of the target either in advance or during the offer period as a defensive measure (this defense being quite similar to a US right plans issue). The target must in principle disclose all defensive measures in its annual report and such information must be included in the target s circular in reply. Duration and reopening of an offer The duration of the offer period, i.e. when securities can be tendered to the offer, is usually 25 trading days in the case of a normal procedure (applicable, notably, when the bidder holds less than half of the capital and the voting rights of the target) and not less than 10 trading days for a simplified procedure (applicable when then the bidder holds at least half of capital and voting rights of the target). A counter-offer restarts the offer period. If successful, an offer automatically reopens within 10 trading days from the publication of the results of the offer for at least a further 10 trading days. The offer is however not reopened in the event the bidder holds at least 95% of the share capital and voting rights of the target and implements a squeeze-out following the offer. Any target security holders may revoke their tender order up until and including the last day of the offer. SPECIFIC RULES RELATING TO MANDATORY OFFERS Triggering events The obligation to file an offer for 100% of the shares and the securities giving access to the capital or voting rights of the target is imposed on any person who, acting alone or in concert: comes to hold directly or indirectly more than 30% of the capital or voting rights of a French listed company; or comes to hold, following a merger or a contribution in kind, more than 30% of the share capital or voting rights of a French listed company. A mandatory offer is also required to be made by any person who acting alone or in concert already has directly or indirectly a holding of between 30% and 50% of the share capital or voting rights of a French listed company and increases, in a period of less than 12 months, its holding of the total capital or voting rights in the target by at least 1%. When a bidder files a public offer for a target which itself holds more than 30% of the share capital or voting rights of a listed company, and such holding constitutes an essential asset of the target, the bidder must also file an offer for such listed company. page 10

13 Exemptions Exemptions to launching a mandatory offer may be granted by the AMF (any interested party can appeal the AMF s decision within 10 days before the Paris Court of Appeal which must render its decision within 5 months) where the triggering event results from: transfer between individuals for no consideration, or a distribution of assets by a company in proportion to the rights of its shareholders; subscription to a capital increase of a company with obvious financial difficulties approved by a shareholders meeting; merger or contribution of assets approved by a shareholders meeting; combination of a merger or contribution of assets approved by a shareholders meeting with the entering into of an agreement constitutive of a concert action between the shareholders of the companies concerned by such merger or contribution; reduction of the total number of the company s shares or voting rights; holding of the majority of the voting rights by the concerned person or a third party, acting alone or in concert; reclassification transaction between group companies; acquisition of control of a target that holds directly or indirectly more than 30% of the share capital or voting rights of a company listed on an EEA regulated market, and such holding does not constitute an essential asset of the target; merger or contribution in kind of a company holding directly or indirectly more than 30% of the capital or voting rights of a French company listed on an EEA regulated market where such holding does not constitute an essential asset of the company contributed or merged; and attribution of double voting rights from 3 April 2014 to 31 December The AMF may also state that there is no obligation to file a mandatory offer: if the relevant thresholds are crossed for not more than 6 months due to a transaction that is not intended to gain or increase control of the company, provided that the shareholder undertakes not to exercise the voting rights attached to the portion of shares which exceeds the relevant thresholds; if the relevant thresholds have been crossed by persons acting in concert with (a) controlling shareholder(s) which remain predominant in the concert; if the relevant thresholds have been crossed by persons acting in concert with one or more existing shareholders who already hold, alone or in concert, between 30% and 50% of the share capital or voting rights of the target on condition that such existing shareholders maintain a higher stake and when the concert is implemented that they do not cross the relevant thresholds; and when a concert party acquires the control of a target that holds more than 30% of the share capital or voting rights of a company listed on an EEA regulated market where such holding constitutes an essential asset of the target, as long as one or more persons in the concert party already controlled the target and remain predominant in the concert. Such exemptions may be granted by the AMF before the relevant threshold is reached. page 11

14 SQUEEZE-OUT Squeeze-out of minority shareholders can be implemented either (i) following a buy-out offer (such buy-out offer being requested either by the bidder or the minority shareholders on condition that the bidder holds at least 95% of the voting rights of the target), or (ii) within 3 months of closing of a public offer, in both cases where the bidder owns at least 95% of the share capital and voting rights of the target. Though a squeeze-out can, in theory, be completed in shares or cash, in practice, it is usually completed in cash only. All minority shareholders are forced out of the company's share capital on the day of the squeeze-out. For the shareholders subject to the squeeze-out, the consideration they are entitled to receive is deposited in an escrow account and their shares are automatically transferred to the bidder. The target's shares are automatically de-listed following the squeeze-out. DELISTING In addition to automatic de-listing following squeeze-out, the delisting of the target s shares can be decided by Euronext Paris (either upon request of the target or the AMF or of Euronext Paris own initiative) if such delisting does not significantly harm the interests of investors or compromise the orderly functioning of the market. Further, the target can request that its shares be delisted if a bidder holds at least 90% of the voting rights of the target at the end of a simplified offer and during the 12 months preceding the request less than 0.5% of the target s market capitalization has been traded. page 12