After clarifying the necessary steps to get SCA’s approval on the acquisition offer in part 8, in this article we will answer some questions for fully understanding of acquisition transaction, e.g., how the acquirer may withdraw or amend his offer? how securities’ holders may withdraw their acceptance of the offer and how? and finally how assets evaluation takes place? stay tuned for the answers in this article.
Can the acquirer withdraw the offer?
The acquirer may not withdraw or back down off the offer after announcing the intent of acquisition without the approval of SCA while the acquirer may withdraw the offer in the following cases:
- If the announcement of the offer contains some conditions which were not met.
- The occurrence of a material adverse event.
- The existence and acceptance of a competing offer.
- If SCA makes its approval subject to a condition that was not accepted by the acquirer.
In case the acquirer is allowed to withdraw the offer or if the offer term expired for failure to meet its associated conditions, the acquirer shall publish an announcement to explain the reason for withdrawing the offer or the expiry of its term.
Can the acquirer amend the offer?
The offer approved by SCA may be amended no later than the 46th day after the next day of receiving the offer by the target company in the following cases:
- If the securities are bought upon announcing the intent of acquisition by the acquirer and its associated group for a higher price than the offer price.
- If the acquirer desires to increase the offer price.
- If the amendment of the offer is related to the percentage of acceptance of the offer by the target company’s shareholders that should be achieved, so that it can be increased or decreased without prejudice to the percentages specified in the provisions of the decision.
To amend the offer, the following conditions shall be met:
- SCA approves the amendment.
- The amendment is completed no later than the 46th day after the next day of receiving the offer by the target company, provided that the amendment of the offer does not lead to going past its validity term, unless otherwise is decided by SCA.
- The amendment of the offer shall be in favor of the securities’ holders.
- The provisions of the amendment shall be applied to the applications to accept the offer which were presented before the amendment.
If the offer is for a swap and the amendment term expires, the acquirer may not publish announcements about the dividends, the operational results, the asset valuation or the current or projected dividends plans, unless such announcements are required by the law or the rules of listing and disclosure in the security market and upon obtaining SCA’s consent.
The same procedures required to approve the primary offer shall apply to the amendment of the offer.
Can The securities’ holders withdraw their offer acceptance?
The securities’ holders who responded to the offer may withdraw their acceptance of the offer within the following periods:
- After (14) days from the first closing date in case the offer does not complete its minimum number of acceptance applications during the period of the first closing date.
- Until the second closing date in case of extending/amending the offer.
- The period specified by SCA.
When and how the acquirer should announce the offer acceptance?
The acquirer shall announce the offer acceptance result no later than the next day after the first/second closing date.
The announcement shall specify the total number of applications for acceptance as follows:
- The securities under which the offer was accepted,
- The securities held by the offering party before the offer term.
- The securities acquired or agreed to be acquired during the offer term.
- The announcement shall indicate the percentages of all the categories of the concerned securities.
In the event the acquirer fails to comply with any of the obligation stated herein, any party who accepted the offer may back down off accepting the offer, unless otherwise decided by SCA, as well as SCA may suspend the listing of the target company until the announcement is issued.
How assets valuation take place?
- The valuation is required to be reported if it is related to the offer:
When the assets related to the offer are valued, the basis of the valuation shall be indicated, and the opinion of an independent appraiser shall be enclosed.
- The Current Valuation:
The valuation of the assets related to the offer shall indicate the valuation validity date, and the address and qualifications of the appraiser. In the event the valuation is not up to date, the appraiser shall confirm that the current valuation shall not be materially different and that it must be updated in case it is not possible to provide such confirmation.
In the end of this series of articles, we hope that we were able to clarify enough everything regarding the laws of Mergers & Acquisitions, with our best wishes, and GOOD LUCK