The International Comparative Legal Guide to:

A practical cross-border insight into mergers and acquisitions

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Aabø-Evensen & Co Advokatfirma Advokatfirman Vinge KBA.G. EROTOCRITOU LLC Albuquerque & AssociadosAli Budiardjo, Nugroho, ReksodiputroAstrea Bär & Karrer Bardek, Lisac, Mušec, Skoko in cooperation with CMS Reich-Rohrwig HainzBBABech-BruunBennett Jones LLPBentsi-Enchill, Letsa & AnkomahCMS Reich-Rohrwig HainzCollin Maréchal (CM Law)Debarliev, Dameski and Kelesoska Attorneys at LawDemarest AdvogadosDillon EustaceDittmar & Indrenius

Dominas & PartnersEl-Borai & PartnersFerraiuoli LLCGide Loyrette Nouel A.A.R.P.I.Gjika & Associates Attorneys at Law Grandall Law FirmGuevara & Gutierrez – Servicios LegalesHajji & AssociésHerbert Smith Freehills LLPHouthoff BurumaKing & Wood MallesonsLendvai PartnersMaples and CalderMJM LimitedMoravčević Vojnović i Partneri in cooperation with SchoenherrNader, Hayaux & GoebelNishimura & AsahiPachiu & Associates

9th Edition

Mergers and Acquisitions 2015

ICLGPen & Paper Peña Mancero Abogados Roca Junyent Scemla Loizon Veverka & de Fontmichel (SLVF)SchoenherrSevergnini, Robiola, Grinberg & TombeurSIGNUM Law FirmSkadden, Arps, Slate, Meagher & Flom LLPSlaughter and MaySysouev, Bondar, KhrapoutskiSZA Schilling, Zutt & AnschützTürkoğlu & Çelepçi in cooperation with SchoenherrUdo Udoma & Belo-OsagieWachtell, Lipton, Rosen & KatzWBW Weremczuk Bobel & Partners Attorneys at Law

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General Chapters:

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DisclaimerThis publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice.Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication.This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations.

Continued Overleaf

The International Comparative Legal Guide to: Mergers & Acquisitions 2015

Contributing EditorMichael Hatchard, Skadden, Arps, Slate, Meagher & Flom (UK) LLP

Head of Business DevelopmentDror Levy

Sales DirectorFlorjan Osmani

Commercial DirectorAntony Dine

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Senior EditorSuzie Levy

Sub EditorAmy Hirst

Group Consulting EditorAlan Falach

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Published byGlobal Legal Group Ltd.59 Tanner StreetLondon SE1 3PL, UKTel: +44 20 7367 0720Fax: +44 20 7407 5255Email: info@glgroup.co.ukURL: www.glgroup.co.uk

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ISBN 978-1-910083-35-2ISSN 1752-3362

Strategic Partners

Country Question and Answer Chapters: 5 Albania Gjika & Associates Attorneys at Law: Gjergji Gjika & Evis Jani 206 Argentina Severgnini, Robiola, Grinberg & Tombeur: Carlos María Tombeur

& Matías Grinberg 277 Austria Schoenherr: Christian Herbst & Sascha Hödl 338 Belarus Sysouev, Bondar, Khrapoutski: Alexander Bondar & Elena Selivanova 439 Belgium Astrea: Steven De Schrijver & Jeroen Mues 5010 Bermuda MJM Limited: Peter Martin & Brian Holdipp 5911 Bolivia Guevara & Gutierrez – Servicios Legales: Jorge Luis Inchauste 6612 Brazil Demarest Advogados: Gabriel Ricardo Kuznietz & Thiago Giantomassi 7113 BVI Maples and Calder: Richard May and Matthew Gilbert 8014 Bulgaria Schoenherr: Ilko Stoyanov & Tsvetan Krumov 8615 Canada Bennett Jones LLP: Jeffrey Kerbel & David Spencer 9416 Cayman Islands Maples and Calder: Nick Evans and Suzanne Correy 10017 China Grandall Law Firm: Will Fung & Yu Xie 10618 Colombia Peña Mancero Abogados: Gabriela Mancero 11119 Croatia Bardek, Lisac, Mušec, Skoko in cooperation with CMS Reich-Rohrwig Hainz:

Hrvoje Bardek 11820 Cyprus A.G. EROTOCRITOU LLC: Alexis Erotocritou 12521 Czech Republic Schoenherr: Martin Kubánek & Vladimír Čížek 13222 Denmark Bech-Bruun: Steen Jensen & Regina M. Andersen 14223 Egypt El-Borai & Partners: Dr. Ahmed El Borai & Dr. Ramy El Borai 14824 Finland Dittmar & Indrenius: Anders Carlberg & Jan Ollila 15325 France Scemla Loizon Veverka & de Fontmichel (SLVF): Fabrice Veverka

& Alexandre Piette 16026 Germany SZA Schilling, Zutt & Anschütz: Dr. Marc Löbbe & Dr. Stephan Harbarth 16627 Ghana Bentsi-Enchill, Letsa & Ankomah: Seth Asante & Frank Nimako Akowuah 17328 Hong Kong King & Wood Mallesons: Joshua Cole 18129 Hungary Lendvai Partners: András Lendvai & Dr. Gergely Horváth 18730 Iceland BBA: Baldvin Björn Haraldsson & Höskuldur Eiríksson 19331 Indonesia Ali Budiardjo, Nugroho, Reksodiputro: Theodoor Bakker

& Herry N. Kurniawan 19932 Ireland Dillon Eustace: Lorcan Tiernan & Adrian Benson 20633 Japan Nishimura & Asahi: Masakazu Iwakura & Tomohiro Takagi 21334 Kazakhstan SIGNUM Law Firm: Liza Zhumakhmetova & Gaukhar Kudaibergenova 22235 Lithuania Dominas & Partners: Šarūnas Basijokas & Karolis Racevičius 22736 Luxembourg Collin Maréchal (CM Law): Raphael Collin & Flavien Carbone 23337 Macedonia Debarliev, Dameski and Kelesoska Attorneys at Law:

Emilija Kelesoska Sholjakovska & Elena Nikodinovska 24138 Mexico Nader, Hayaux & Goebel: Yves Hayaux-du-Tilly Laborde

& Eduardo Villanueva Ortíz 24839 Montenegro Moravčević Vojnović i Partneri in cooperation with Schoenherr:

Slaven Moravčević & Miloš Laković 25440 Morocco Hajji & Associés: Amin Hajji & Houda Boudlali 26141 Netherlands Houthoff Buruma: Alexander J. Kaarls & Peter B.J. Werdmuller 266

1 2014 – The Market Strikes Back – Michael Hatchard & Scott Hopkins, Skadden, Arps, Slate, Meagher & Flom (UK) LLP 1

2 M&A Trends and Outlook for 2015 – Scott V. Simpson & Lorenzo Corte, Skadden, Arps, Slate, Meagher & Flom (UK) LLP 5

3 M&A in Africa – Gavin Davies & Hubert Segain, Herbert Smith Freehills LLP 84 Activist-Strategic Buyer Tag-Teams: A New Hostile Takeover Template? – Adam O. Emmerich

& Trevor S. Norwitz, Wachtell, Lipton, Rosen & Katz 14

Country Question and Answer Chapters:

The International Comparative Legal Guide to: Mergers & Acquisitions 2015

EDITORIAL

Welcome to the ninth edition of The International Comparative Legal Guide to: Mergers & Acquisitions.This guide provides corporate counsel and international practitioners with a comprehensive worldwide legal analysis of the laws and regulations of mergers and acquisitions.It is divided into two main sections: Four general chapters. These are designed to provide readers with an overview of key issues affecting mergers and acquisitions, particularly from the perspective of a multi-jurisdictional transaction.Country question and answer chapters. These provide a broad overview of common issues in mergers and acquisitions in 55 jurisdictions.All chapters are written by leading mergers and acquisitions lawyers and industry specialists and we are extremely grateful for their excellent contributions.Special thanks are reserved for the contributing editor Michael Hatchard of Skadden, Arps, Slate, Meagher & Flom (UK) LLP for his invaluable assistance.Global Legal Group hopes that you find this guide practical and interesting.The International Comparative Legal Guide series is also available online at www.iclg.co.uk.

Alan Falach LL.M. Group Consulting Editor Global Legal Group Alan.Falach@glgroup.co.uk

42 Nigeria Udo Udoma & Belo-Osagie: Yinka Edu & Ekundayo Onajobi 27443 Norway Aabø-Evensen & Co Advokatfirma: Ole Kristian Aabø-Evensen

& Harald Blaauw 28144 Poland WBW Weremczuk Bobel & Partners Attorneys at Law:

Lukasz Bobel & Nastazja Lisek 29645 Portugal Albuquerque & Associados: António Mendonça Raimundo 30346 Puerto Rico Ferraiuoli LLC: Fernando J. Rovira-Rullán & Yarot T. Lafontaine-Torres 30947 Romania Pachiu & Associates: Ioana Iovanesc & Alexandru Lefter 31548 Russia Pen & Paper: Stanislav Danilov 32349 Serbia Moravčević Vojnović i Partneri in cooperation with Schoenherr:

Matija Vojnović & Luka Lopičić 32950 Slovakia Schoenherr: Stanislav Kovár & Monika Kormošová 33651 Slovenia Schoenherr: Vid Kobe & Marko Prušnik 34352 Spain Roca Junyent: Natàlia Martí Picó & Xavier Costa Arnau 35253 Sweden Advokatfirman Vinge KB: Erik Sjöman & Christian Lindhé 36254 Switzerland Bär & Karrer: Dr. Mariel Hoch & Dr. Christoph Neeracher 36855 Turkey Türkoğlu & Çelepçi in cooperation with Schoenherr:

Levent Çelepçi & Burcu Özdamar 37656 Ukraine CMS Reich-Rohrwig Hainz: Maria Orlyk & Kateryna Soroka 38257 United Kingdom Slaughter and May: William Underhill 38758 USA Skadden, Arps, Slate, Meagher & Flom LLP: Ann Beth Stebbins

& Thomas H. Kennedy 39459 Vietnam Gide Loyrette Nouel A.A.R.P.I.: Nasir PKM Abdul & Long Huynh 411

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Chapter 32

Adrian Benson

Lorcan Tiernan

Dillon Eustace

Ireland

The Rules do not apply to private companies. Mergers and acquisitions of private companies are primarily regulated by the Companies Acts and the Competition Acts.

1.3 Are there special rules for foreign buyers?

With the exception of particular industries, there are generally no restrictions on foreign buyers. See question 1.4.

1.4 Are there any special sector-related rules?

Several industries are subject to additional regulations such as media companies, financial institutions, insurance undertakings, pharmaceutical companies, airlines and telecommunications operators.

1.5 What are the principal sources of liability?

A breach of any of the provisions of the legislation and regulatory rules listed in question 1.1 above could expose a company, or an individual, to liability.

2 Mechanics of Acquisition

2.1 What alternative means of acquisition are there?

The following are examples of means of acquisition: (i) A public offer to acquire the securities of a company.(ii) A scheme of arrangement under the Companies Acts to

sanction a variation of the rights of the shareholders of a company.

(iii) A merger with at least one EEA company under the European Communities (Cross-Border Mergers) Regulations 2008.

(iv) A merger with another Irish incorporated public limited company under the European Communities (Mergers and Divisions of Companies) Regulations 1987. (Please note these Regulations will be repealed by the Companies Act 2014.)

The Companies Act 2014 which is expected to commence mid-2015 provides a method by which two Irish public limited companies may merge without the requirement of a cross-border element.

1 Relevant Authorities and Legislation

1.1 What regulates M&A?

The primary laws and regulations which govern M&A transactions involving public companies in Ireland include:(i) The Irish Takeover Panel Act 1997 (the “Act”) provides for

the monitoring and supervision of takeovers of Irish public companies, and established the Irish Takeover Panel (the “Panel”) and the Irish Takeover Rules (the “Rules”) for this purpose. The Panel also acts as the designated competent authority under the European Communities (Takeover Bids (Directive 2004/25/EC)) Regulations 2006 (the “Takeover Regulations”).

(ii) The Companies Acts 1963-2013 (the “Companies Acts”) govern various aspects of mergers and acquisitions concerning both public and private companies (please note that the Companies Acts will be repealed by the Companies Act 2014 which is due to commence mid-2015).

(iii) Substantial Acquisition Rules (“SARs”) apply to public companies and the means by which substantial acquisitions can be made.

(iv) The Competition Acts 2002 to 2014 (the “Competition Acts”) require certain M&A transactions to be reported to the Competition and Consumer Protection Commission for approval.

(v) The Market Abuse (Directive 2003/6/EC) Regulations 2005 (the “Market Abuse Regulations”) impose obligations on companies whose securities are listed on the Irish Stock Exchange (the “ISE”).

(vi) The Irish Listing Rules (the “Listing Rules”) apply if the company is listed on the ISE.

1.2 Are there different rules for different types of company?

(i) The Rules apply to Irish incorporated public limited companies or other Irish incorporated bodies, whose securities are either currently authorised, or have been authorised within five years prior to the takeover proposal, on a market regulated by a recognised stock exchange.

(ii) Irish incorporated public limited companies, whose securities are either currently authorised to be traded, or have been so authorised within five years prior to the takeover proposal on the London Stock Exchange, the New York Stock Exchange or NASDAQ.

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2.2 What advisers do the parties need?

Parties to a merger or acquisition will generally require independent financial advisers, legal advisers, accountants and public relations advisers.

2.3 How long does it take?

The “put up or shut up” criteria in the Rules provide that, where an announcement regarding a possible offer has been made but no firm intention to make a bid has been announced, the Panel may impose a time limit during which the bidder must either announce a firm offer (“put up”) or state its intention not to make an offer (“shut up”). There is no prescribed time limit, and the Panel will have regard to the circumstances of the case. If a firm intention to make an offer has been announced, the bidder must post the offer document within 28 days of such announcement. The parties then have 60 days in order to fulfil any acceptance conditions, such as obtaining shareholder approval, and will have another 21 days to fulfil any other conditions. The earliest possible closing date is 21 days after the offer document is posted. A scheme of arrangement generally takes longer to complete than a general offer as the process involves three court hearings, each of which will take time to schedule. Please note that the Companies Act 2014, due to commence mid-2015, provides a streamlined scheme of arrangement process which should assist in expediting this method of acquisition.

2.4 What are the main hurdles?

The main hurdles include: (i) acquiring the requisite level of shareholder approval (see question 2.15 below); (ii) obtaining any applicable regulatory approval; and (iii) obtaining the required approval from the Competition and Consumer Protection Commission. It is important to engage with the Competition and Consumer Protection Commission and any other regulatory bodies at an early stage in the process to avoid any delays.

2.5 How much flexibility is there over deal terms and price?

The Rules provide that, as a general principle, all shareholders must be treated equally. Any special terms which would benefit certain shareholders would only need to be approved by the Panel and/or the shareholders. When the bidder makes a voluntary bid they are permitted to offer any price they wish, provided that the price offered is not less than the price paid by the bidder for shares in the target in the three-month period before the commencement of the offer period. The Panel can extend this to a 12-month period if it believes it is more appropriate, depending on the circumstances. Should a bidder acquire shares at a higher price during the offer period, it is required to increase its offer to reflect this. If, within 12 months before the commencement of the offer period, the bidder has made a cash offer for shares of at least 10% of the nominal value of the issued shares in that class, it is also required to make a cash offer when making its bid. The Panel can impose this requirement when a cash offer for shares of less than 10% of the nominal value was made, if it feels such action is just and proper.

Where a bidder is required to make a mandatory offer under the SARs, the price of the shares must be set at the highest price that the bidder paid for shares in the target in the last 12 months.

2.6 What differences are there between offering cash and other consideration?

The announcement relating to a cash offer must include a statement from the financial adviser of the bidder confirming that the bidder has sufficient resources to satisfy full acceptance of the offer. Where consideration for an offer includes securities, the offer document must contain financial and other information in respect of the company to which such securities relate.

2.7 Do the same terms have to be offered to all shareholders?

The Rules provide that a bidder cannot single out specific shareholders so that they might receive financial or other advantages which the remainder of the shareholders did not receive under the bid. Panel consent is required in regard to management incentivisation schemes. Such schemes must be disclosed in the offer document, with the independent financial advisor of the target publicly stating that such scheme is fair and reasonable. The Panel may also require that shareholder approval of such schemes is obtained.

2.8 Are there obligations to purchase other classes of target securities?

If a bidder is making an offer in relation to a class of equity securities which confer voting rights, then they are obliged to make a comparable offer for every other class of shares.

2.9 Are there any limits on agreeing terms with employees?

The Panel must give consent to any proposed management incentivisation scheme, which may also be subject to other conditions. See question 2.7.

2.10 What role do employees, pension trustees and other stakeholders play?

Employees will not get an opportunity to vote on the offer, unless they are also shareholders of the target. However, a representative for employees is entitled to provide an opinion on the proposed offer which the directors, subject to time constraints, are obliged to include in their circular to the shareholders.

2.11 What documentation is needed?

Once a firm intention to make an offer is announced, the following documents are required:(i) Offer document, the contents of which are prescribed in the

Rules.(ii) Circular to shareholders: in the case of a recommended

bid, the circular will be included in the offer document and explain the reasons behind the board recommending the bid. In the case of a hostile bid, the circular will be issued to shareholders within 14 days of the announcement of the offer.

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(iii) Revised offer documents – should the bidder revise his offer, revised offer documents will be issued.

In a scheme of arrangement, the notice of the meetings to shareholders and the accompanying circular will take the place of the offer document.

2.12 Are there any special disclosure requirements?

All documents issued to shareholders in connection with the offer must contain a statement made by the directors confirming that they accept responsibility for the information contained in the document.If any profit forecasts are made in relation to the target during the offer period, the auditors, accountants, and/or financial advisers may be required to provide reports to support such projections.

2.13 What are the key costs?

The key costs involved in an acquisition relate to professional advisers – see question 2.2. Depending on the type of acquisition, there may be additional court costs.The bidder will have a stamp duty liability of 1% in relation to the transfer of shares in cases where the target is acquired by an offer.

2.14 What consents are needed?

Apart from the relevant level of shareholder consent (see question 2.15), mergers may be subject to merger control by either the Competition and Consumer Protection Commission, or the European Commission. The relevant body will examine the competitive effect that the merger may have on competition, and determine whether it is likely to substantially lessen competition. Depending on the industry sector, further consents from regulatory bodies may be required.

2.15 What levels of approval or acceptance are needed?

In relation to a general offer, in order to obtain 100% control, the bidder must obtain approval from at least 90% of the shareholders in an instance where the target is listed on a regulated market in an EU or EEA country, and at least 80% when it is an Irish public company listed on a secondary market, the NASDAQ or the New York Stock Exchange. For a general offer to be accepted, the bidder will require approval from at least 50% plus one vote of the shareholders. For a scheme of arrangement, the bidder must receive approval from at least 75% of the shareholders of the target that vote, and would also need the approval of the board of directors as, unlike an offer which is controlled by the bidder, it is the target that usually initiates and controls this process. See also question 2.14.

2.16 When does cash consideration need to be committed and available?

Consideration must be available from the date of the announcement of a firm intention to make an offer until the date that such offer is complete or lapses. When consideration is in cash, a confirmation that the bidder has sufficient resources to satisfy the offer will be included in the offer document. Consideration must be settled within 14 days of the offer being declared unconditional.

3 Friendly or Hostile

3.1 Is there a choice?

Yes, however, hostile bids, by their nature, are more difficult to successfully complete. The bidder would not have the benefit of voluntary due diligence on the part of the target, and also would be subject to the likely recommendation of the target board to the shareholders that they reject the offer (see question 3.3 below). The option of engaging in a scheme of arrangement is not usually open to bidders in the case of a hostile bid, as such schemes require the cooperation of the target board of directors.

3.2 Are there rules about an approach to the target?

A bidder intending to make an offer for the target is obliged under the Rules to inform the board of this intention prior to announcing the offer. In the case of a welcome bid, the board has usually been informed well in advance as, in this instance, the bidder would seek voluntary due diligence during the process, and for the recommendation of the board to be contained within the offer announcement. In the case of a hostile bid, the bidder generally only gives the target board minimal notice prior to the announcement of the bid.

3.3 How relevant is the target board?

While the target board may not deny the holders of securities the opportunity to decide on the merits of an offer, it is still in a position to influence the decisions of the shareholders by issuing a circular recommending either the acceptance or rejection of the offer, and the arguments causing them to make such a recommendation.

3.4 Does the choice affect process?

A hostile bid would usually take the form of an offer. A scheme of arrangement is usually initiated by the target. In the case of a recommended offer, the target and the bidder make a joint announcement in relation to the offer that has been made, but in the case of a hostile bid this would be made by the bidder alone. The bidder is required to give notice to the target prior to making this announcement, but there is no prescribed time limit or form for this notice which, in many cases, is given immediately prior to the hostile bid being announced. The provision of a circular to the shareholders will also be affected; the circular will be included with the offer document in the case of a recommended bid, and must follow within 14 days of the announcement of an offer in the case of a hostile bid.

4 Information

4.1 What information is available to the buyer?

Any information which is in the public domain will be available to the buyer. Public companies are required by law to disclose certain information, the majority of which is available from the Companies Registration Office website. Listed companies will also be subject to the Listing Rules, which will require them to disclose further information. Companies which are listed on other stock exchanges

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may be subject to more onerous disclosure requirements, causing further information on them to be publicly available. Targets are permitted to engage with the bidder in voluntary due diligence. However, a target is not obliged to assist bidders, which can lead to difficulties for a bidder attempting a hostile bid. However, if there is more than one bidder, the target is obliged to provide equal disclosure to both.

4.2 Is negotiation confidential and is access restricted?

Absolute secrecy must be maintained in relation to both hostile and recommended bids, until such time as the offer is announced. The Rules provide that the target may impose conditions regarding confidentiality, and the use to which the information may be used, when disclosing information. The target is not permitted to impose more onerous conditions on different bidders.

4.3 When is an announcement required and what will become public?

An announcement is required at any instance at the request of the Panel, or otherwise on the occurrence of any of the following events:(i) once the target board receives a firm intention to make an

offer;(ii) immediately following a transaction which would oblige a

shareholder to make a mandatory offer;(iii) in instances where the target is the subject of rumour and

speculation or there is an anomalous movement in its share price. Should this occur prior to the target being approached, there must be reasonable grounds to believe the bidder’s actions are behind such movement;

(iv) at the end of the time period dictated by the Panel in a “put up or shut up” scenario; or

(v) when negotiations are extended to more than a very restricted number of people.

An announcement may be brief and, if made by the target, can simply state that it is in discussions which may or may not lead to an offer or, if made by the bidder, can state that it is considering making an offer. A bidder may not announce a firm intention to make an offer unless the bidder and its financial adviser are satisfied that the bidder is able to follow through with the offer. The announcement regarding a firm intention to make an offer must include, inter alia: the terms of the offer; any conditions of the offer; the identity of the bidder and any ultimate controlling interest of the bidder; a statement that a person interested in more than 1% of the securities of the target or bidder is subject to disclosure obligations; and details of any arrangements between the bidder and shareholders.

4.4 What if the information is wrong or changes?

Once an announcement of a firm intention to make an offer is made, a bidder cannot withdraw an offer without the permission of the Panel, unless a pre-condition has not been satisfied or another bidder makes a higher offer. The Rules now provide that the target may request a bidder to enter an agreement to indemnify advisers against liability for any loss arising from the reliance on information which they may have produced.

5 Stakebuilding

5.1 Can shares be bought outside the offer process?

Bidders can buy shares outside of the offer process. This may increase the likelihood of their bid being successful however, bidders should bear in mind the possibility of triggering disclosure obligations as set out under the Transparency Regulations and the SARs, depending on the volume of shares purchased. See question 5.3. A bidder should also consider the rules regarding a mandatory offer when stakebuilding. See question 5.4.

5.2 Can derivatives be bought outside the offer process?

Derivatives may be bought outside the offer process but, if the derivatives result in an entitlement to acquire voting shares in the company, bidders must bear in mind the possibility of triggering disclosure obligations. See question 5.3.

5.3 What are the disclosure triggers for shares and derivatives stakebuilding before the offer and during the offer period?

Prior to the announcement of a bid, disclosure obligations may be triggered under the Transparency Regulations and/or the SARs. The Transparency Regulations provide that a stakeholder must notify a company once the percentage of voting rights it has acquired in the company reaches, exceeds or falls below 3%, and then each 1% thereafter. In the case of a non-Irish issuer, the relevant thresholds will be 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75%. Stakeholders should also be aware of the SARs, which restrict the time in which persons can increase their stakeholding from 15% to less than 30%.Following the announcement of a bid, dealings in the securities of the target are governed by the Rules. Firstly, any person with more than a 1% interest, or who acquires more than a 1% interest, in the securities of the bidder or the target, must, during the offer period, publicly disclose all dealings they may have in the securities of the target or bidder. Secondly, during the offer period, the bidder may not sell the securities of the target unless they obtain the consent of the Panel and, 24 hours prior to the sale of the securities,make an announcement to this effect. Following this announcement, the bidder will not be permitted to acquire further securities in the target, or revise the terms of their offer, for the remainder of the offer period.

5.4 What are the limitations and consequences?

The biggest consequence to stakeholding relates to the mandatory offer rule under the Rules and the SARs which provide that a bidder must make a mandatory offer for the remainder of the share capital of the target if (i) it acquires 30% of the voting rights of the target, (ii) its holding increases to above 30%, or (iii) its holding of above 30%, but less than 50%, of the voting rights of the target increases by more than 0.05% in a 12-month period. The SARs also prevent a shareholder from acquiring 10% or more of the voting rights of the company within a seven-day period, if such acquisition would lead the shareholder to hold more than 15%, but less than 30%, of the voting rights of the company.

Dillon Eustace Ireland

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6 Deal Protection

6.1 Are break fees available?

The obligation on a party to bear the costs of the other party in the event that the first party withdraws from the transaction (“break fees”) is a standard inclusion in most recommended bids. The inclusion of break fees must be approved in advance by the Panel. The Panel will usually only approve the inclusion of break fees which relate to specific, quantifiable third party costs, subject to an upper limit of 1% of the value of the offer, and provided that the target provides written confirmation that the board of directors and financial advisers believe the arrangement to be in the best interests of the shareholders. In the case of a listed company, break fees of above 1% will cause the transaction to be classified as a Class 1 transaction, thereby obliging the company to announce such transaction and issue a circular to their shareholders seeking their approval of such transaction.

6.2 Can the target agree not to shop the company or its assets?

The target is not prohibited from agreeing that it will not cooperate with any potential rival bidders, provided that this is in the best interests of the shareholders and that the principle of not denying the shareholders an opportunity to decide on the merits of an offer is adhered to. In this case, a standard acquisition agreement will contain a provision providing that, once it has consulted with its legal and financial advisers, should a determination be made that the target has a fiduciary duty to engage in negotiations, it can so engage. In the case of a recommended bid, it is common for the parties to enter into an agreement which governs several aspects of the acquisition process. This agreement could contain non-solicitation provision by which the target agrees it will not seek out or encourage competing offers to be made by third parties. The agreement can also provide that the target must inform the bidder if it expects to receive a competing offer.

6.3 Can the target agree to issue shares or sell assets?

During the offer period, or during any time which the target board has reasonable cause to believe an offer is forthcoming, the target is restricted from performing certain actions without the permission of the Panel or its shareholders, including, but not limited to, the following:(i) Allot or issue any authorised but unissued shares.(ii) Issue or grant an option in respect of any unissued shares.(iii) Create or issue, or permit the creation or issue of, any security

conferring rights of conversion into or subscription for shares.(iv) Sell, dispose of or acquire, or agree to see, dispose of or

acquire any assets of a material amount or any operations yielding profits of a material amount.

(v) Enter into any contract otherwise than in the ordinary course of business.

(vi) Take any action, other than seeking alternative offers, which may result in frustration of an offer or possible offer or in target shareholders being denied the opportunity to decide on the merits of such offer or possible offer.

6.4 What commitments are available to tie up a deal?

In the case of a recommended bid, it is common practice to for the bidder to require any directors holding shares and other large shareholders to sign an irrevocable undertaking to accept the offer, once made. The bidder may also require the directors to agree to non-solicitation requirements, preventing them from seeking other bids. The Panel must be consulted before any such commitment is sought from shareholders. When a target is being acquired by means of a scheme of arrangement, the parties will usually enter a merger/acquisition agreement, the terms of which will dictate how key aspects of the acquisition will be carried out. Common inclusions in such agreement are confidentiality provisions, as well as setting out the responsibilities of both parties up to the date of completion.

7 Bidder Protection

7.1 What deal conditions are permitted and is their invocation restricted?

An offer may be subject to several conditions which, if not fulfilled, may cause the offer to lapse. Such conditions would usually include the following:(i) Obtaining the required amount of shareholder approval.(ii) Receiving sanction from the court in the case of a scheme of

arrangement.(iii) Obtaining approvals from the appropriate regulatory

bodies, including the Competition and Consumer Protection Commission.

(iv) Obtaining any industry-specific approvals.Should a bidder wish to invoke a condition or pre-condition in order to lapse a bid, the Panel must be satisfied that it has fulfilled the test contained in the Rules.

7.2 What control does the bidder have over the target during the process?

The bidder has little control over the target during the process. As stated in question 4.4 above, the bidder cannot withdraw an offer without the consent of the Panel, unless a pre-condition of the offer is not satisfied. However, such pre-condition cannot depend solely on the actions of the bidder.

7.3 When does control pass to the bidder?

Where the bidder is acquiring the target by means of a general offer, control will pass to the bidder once the offer becomes unconditional. Under a scheme of arrangement, control will pass to the bidder once the majority of shareholders that vote (minimum 75%) have given their approval, the High Court has sanctioned the scheme and a copy of the Court order has been registered in the Companies Registration Office.

7.4 How can the bidder get 100% control?

There is a statutory procedure available to bidders in order to compulsorily acquire the shares of dissenting minority shareholders so that they may gain 100% control of the target, more commonly known as a “squeeze out”.

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In order to qualify to use the squeeze out procedure, the bidder must have obtained approval from shareholders representing 90% of the issued share capital of the target, provided that the target is a company which is listed on a regulated market in any EU or EEA Member State. Should the target be an Irish public company which is listed on secondary markets (e.g. the ISE’s Enterprise Securities Market), the NASDAQ or the New York Stock Exchange, the threshold is lowered to 80%. See question 7.3 above for details on how a bidder may obtain 100% control under a scheme of arrangement.

8 Target Defences

8.1 Does the board of the target have to publicise discussions?

The Rules clearly emphasise the requirement for maintaining absolute secrecy up until the bid is announced. All persons privy to confidential information concerning the bid may only divulge such information if it is necessary in connection with the offer to do so, and provided they are not breaching any laws by doing so. It is important to note that the provisions of the Market Abuse Regulations would also apply to such persons. In an exception to the requirement for confidentiality prior to making an official offer, the Panel may require a bidder to make an announcement in certain circumstances, including an instance where the target is the subject of rumour or speculation or there is an anomalous movement in its share price. Such announcement will disclose the fact that an offer is in discussion.

8.2 What can the target do to resist change of control?

The directors of a target company must always bear in mind the provision contained in the Act which states that a target board must not deny the holders of securities the opportunity to decide on the merits of an offer. However, following independent advice, should the target board believe that such an offer would not be in the best interests of the company, they should explain this to shareholders in their circular, while setting out any arguments for the acceptance and rejection of the offer. If the target believes it will soon become the subject of a hostile bid, it should immediately start to formulate its defence to such bid, focusing on areas which it will later highlight to shareholders in the defence circular as to why such a bid is not in the best interests of the company. The due diligence available to a hostile bidder is generally limited to that which is publicly available or which a target is required under the Rules to provide, which can assist a target company in resisting a hostile bid. It is also important to note that the principle of equality of information will apply if there is a second, non-hostile, bidder at play.

8.3 Is it a fair fight?

While there are rules in place to protect each target, its shareholders, and, to a limited extent, the bidder, it is clear that such rules are

heavily weighted in favour of protecting the interests of the shareholders of the target. Evidence of this is exhibited in the lack of successful hostile takeover bids in the Irish market. An objective of the SARs is to provide target companies with periods in which to build their defence against any potential hostile bid by warning them of shareholders participating in stakeholding, thereby ensuring an element of fairness is involved in hostile proceedings.

9 Other Useful Facts

9.1 What are the major influences on the success of an acquisition?

Though each acquisition is unique, the common factors influencing the success of most acquisitions are as follows:(i) Board Recommendation. (ii) Active cooperation with Regulatory Bodies. (iii) Strict adherence to the Rules.(iv) Preparation.(v) Right price. (vi) Right advisors.

9.2 What happens if it fails?

Where a bidder has announced an intention to make an offer, and the offer is then withdrawn or lapses, except with the consent of the Panel, the bidder will not be permitted to make another bid for the target within 12 months of the date on which the offer was withdrawn or lapsed. Should the bid fail by virtue of the target withdrawing, break fees may be applicable in relation to third party costs incurred by the bidder. Please see question 6.1 above.

10 Updates

10.1 Please provide a summary of any relevant new law or practices in M&A in Ireland.

The Companies Act 2014, which is expected to commence mid-2015, has introduced several changes to the way that mergers and acquisitions are effected in Ireland. It will be possible to effect a merger of two Irish private companies without the need of a cross-border element, as required under the European Communities (Cross-Border Mergers) Regulations 2008. A merger can be effected by way of a High Court Order or through a process called the Summary Approval Procedure. Amendments in relation to the acquisition process have also been introduced by the Companies Act 2014. The process by which a scheme of arrangement is approved has been streamlined, with the required number of applications to the court now reduced. Changes have also been introduced regarding the manner in which pre-acquisition profits of the target may be distributed following an acquisition.

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212 ICLG TO: MERGERS & ACQUISITIONS 2015

Dillon Eustace is one of Ireland’s leading law firms focusing on financial services, banking and capital markets, corporate and M&A, litigation and dispute resolution, commercial property and taxation.

Headquartered in Dublin, Ireland, the firm’s international practice has seen it establish offices in Tokyo, New York, Hong Kong and the Cayman Islands.

In tandem with Ireland’s development as a leading country for inward investment, Dillon Eustace has developed a dynamic team of lawyers representing international and domestic companies, big and small.

We strive to develop our teams, to provide a sophisticated proactive service to clients and to deepen our understanding of each client’s business and needs.

Our Corporate Department advises both domestic and international clients on all aspects of corporate and commercial law including mergers and acquisitions, reorganisations and restructurings, corporate and other business structures, intellectual property rights, EU and competition law providing clients with innovative but practical solutions throughout the lifecycle of the client’s business.

Adrian joined Dillon Eustace in January 2005 and was appointed as a partner in 2006. Adrian has extensive experience advising on a wide range of corporate transactions and commercial arrangements across a wide range of industries including mergers and acquisitions, corporate re-organisations, shareholders’ agreements and disputes, joint ventures, private equity and corporate governance.

Lorcan became a partner of Dillon Eustace in 2000 and Head of its Corporate and Commercial Department in 2004. His main areas of practice are mergers and acquisitions, corporate finance, corporate insolvency and financial services. Lorcan has been recommended by a number of leading directories including Chambers, IFLR, Legal 500 and PLC Which Lawyer? He is a member of the International Bar Association and is currently Co-Chair of the ABA’s International Financial Products and Services Committee and a member of the Irish Law Society’s Business Law Committee. He also acts as the ABA’s liaison to the Law Society of Ireland. He is a past-Chairman of the IFIA’s Alternative Investment Committee as well as a past member of FEFSI’s Hedge Funds Working Group.

Lorcan established Dillon Eustace’s Hedge Funds Group as the market leader and is still involved in the hedge fund sector advising funds, their managers, and directors.

Adrian BensonDillon Eustace 33 Sir John Rogerson’s Quay Dublin 2 Ireland

Tel: +353 1 673 1705Fax: +353 1 667 0042Email: Adrian.benson@dilloneustace.ieURL: www.dilloneustace.ie

Lorcan TiernanDillon Eustace 33 Sir John Rogerson’s Quay Dublin 2 Ireland

Tel: +353 1 673 1736Fax: +353 1 667 0042Email: Lorcan.tiernan@dilloneustace.ieURL: www.dilloneustace.ie

Dillon Eustace Ireland

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