Takeovers of companies listed on the multilateral trading facility Euronext Growth Oslo ( Euronext Growth ) are not currently subject to the same strict regulation as acquisitions of companies listed on the regulated markets Oslo Børs and Euronext Expand. As a starting point, the offeror has great flexibility and a wider scope for action in the case of Euronext Growth acquisitions. There are so far few examples in practice of such completed acquisitions. For the time being, it appears that the parties in takeovers of companies on Euronext Growth are choosing to follow the regulated process for the acquisition of companies on a regulated market/stock exchange (Stock Takeover). Below we discuss a selection of topics that may be relevant to consider in connection with takeovers of Euronext Growth companies.
Starting points: The rules on ongoing information obligations, prohibition of insider trading and reporting obligations for primary insiders and their close relatives apply fully to companies listed on Euronext Growth. In contrast to stock exchange takeovers, however, no rules apply regarding mandatory flagging for ownership positions. It also does not apply to rules on voluntary and compulsory offers as it does for stock exchange takeovers. There is therefore no requirement to make an offer to take over other shares in the event of an acquisition that results, or may result, in the person concerned becoming the owner of more than 1/3 in a company on Euronext Growth. As a starting point, a potential provider will therefore have great flexibility in the acquisition process.
Agreement regulation: If the offeror has a need for dialogue with the target company, for example to discuss the topicality, timetable and process of an indicative offer, it is natural for the offeror to approach the board of the target company. Furthermore, the target company can also be a point of contact for the shareholders. As in stock exchange takeovers, it would be sensible to enter into a confidentiality agreement at an early stage, and possibly regulate initial conditions in a process agreement. Any restrictions on the target company's behavior and duties in connection with the offer and execution of the offer, for example access to due diligence, exclusivity, the board's recommendation, etc., should be laid down in a transaction agreement. The offeror should also secure access to the target company's ticker through the company in order to be able to easily publish information about the bid and the process.
Due diligence: Through the company's fulfillment of ongoing information obligations, all material information about the company must be made public. The need to do due diligence may therefore be limited. The provider may still wish to receive some more information about various conditions in order to limit their risk. Basically, there are no special restrictions for carrying out due diligence on companies on Euronext Growth, but it can be expected that the target company will be reticent and not provide more information than they consider necessary to defend the offer. Although there is no established principle of equal treatment similar to a stock exchange takeover, it is expected that the target company will assess whether information sharing will be in the mutual interest of the target company and the shareholders. Furthermore, principles for the implementation of due diligence should be agreed, including for the handling of inside information to ensure that the target company publishes such information before a bid is made.
Contact with shareholders: The offeror is freer to contact shareholders as there are no legal requirements for minority protection and process such as in the case of a stock exchange takeover. The offeror can, for example, negotiate with individual shareholders, and the offeror can also acquire a larger ownership stake in the share without this becoming known in the market, as the flag rules do not apply. The rules on insider information and the ban on insider trading must be complied with in any case. As a starting point, the offeror will nevertheless not be prevented from trading in the share despite knowledge of its own acquisition plans.
Prior approval: The need to obtain prior approval will depend, among other things, on an assessment of the shareholder composition. It cannot be expected that institutional investors will make more than a "soft commitment" with the possibility of withdrawing if a better offer comes along.
The board's support: The board of the target company is not obliged to communicate its opinion of a bid to the market or other shareholders, in contrast to a stock exchange takeover where this is a legal requirement. For the tenderer, it may still be desirable to get the board's support for the bid, and in that case it should be agreed. Any access for the board to withdraw or change the recommendation should also be regulated.
Tender document:The offeror should consider preparing an offer document with an acceptance form that covers to a large extent all elements that are expected to be mentioned in a voluntary offer document. This will ensure the shareholders a minimum level of information about the offer and offeror. It cannot be expected that Oslo Børs will review shuch offer document.
Forced Redemption: If the offeror owns more than 90% of the shares, compulsory redemption can be carried out in accordance with company law rules.
Delisting: Oslo Børs decides on delisting following application from the company. Delisting requires approval from 2/3 of the shareholders at the general meeting. If the offeror has achieved over 90% ownership, delisting is expected to be granted.
We at AGP have extensive experience with private acquisitions and takeover offers for listed companies. Feel free to contact one of us if you need assistance or have questions.
This memo is written as a general overview and should not be regarded as specific advice and we recommend that you seek specific legal advice from Norwegian counsel should you consider making an offer for a company listed in Norway. This memo is limited to selected matters and should not be perceived as exhaustive. In particular, we do not address tax and accounting regulations. There are relevant issues in relation to a takeover-situation that are not covered herein.