In the last part of this series, we went through the different types of acquisition. However, it is worth highlighting whether it is possible to submit a competing offer to acquire the target company.
Is a Competing Acquisition Offer Possible?
The short answer is YES. However, the competing offer shall meet certain criteria. The intent shall be announced no later than the 53rd day from the next day of receiving the primary offer by the target company. The competing offer must be better for the securities' holders than the primary offer, and SCA may approve the draft competing offer if it contains a material amendment to the proposed conditions in favor of the holders of the securities, or if the competing offer is recommended by the target company.
Time Frame of the Competing Offer
In the event SCA approves the competing offer, its validity term shall be calculated from the next day after it is received by the target company and until the second closing date. SCA may extend this term whenever necessary.
Securities' holders who have not responded to the offer may submit their requests of acceptance within 14 days from the first/second closing date. In the event competition among offers continues and reaches the 46th day of the competing offer's validity term, SCA may require an extension of up to 5 more days to finalize the offers.
Offers for All Categories of Securities
If the target company has more than one category of shares in the capital, the acquirer shall submit a comparable offer for each category. The offer submitted for shares that have no voting rights should not be conditional on a certain level of acceptance of such category.
When a Cash Offer Should Be Submitted
The acquirer must submit a cash offer when: the acquirer obtained 10% or more of the shares in cash during the offer validity term; or 10% or more in cash during the 6 months preceding the knowledge of the potential offer; or in cases of mandatory acquisition.
When a Swap Shares Offer Should Be Submitted
The acquirer should submit an offer to swap shares when: the acquirer obtained 10% or more of shares by swapping during the offer validity term; or 10% or more by swapping during the 3 months preceding the knowledge of the potential offer.
What is the Termination Fee?
The termination fee is an arrangement under which the target company pays a specific sum when it triggers a certain event that would suspend the offer. Any proposed termination fees may not exceed 2% of the value of the terminated offer. SCA's prior approval must be obtained in all cases which involve a proposal to agree on termination fees.
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