In this series of blog, we will continue to discuss certain considerations for an acquirer of a publicly-listed target when deciding whether to proceed with a take-over bid or a plan of arrangement.
See Chinese version below [中文版参阅下文].
- Threshold for Success. A plan of arrangement typically requires approval by at least two-thirds of the votes cast by shareholders at a shareholders' meeting. A take-over bid must be conditional on a simple majority of the securities being tendered into the bid. So, the threshold of success for a bid is slightly higher, since it requires support from more than 50% of all of the securities held by persons other than the bidder, whereas approval of an arrangement requires only two-thirds of the votes cast by shareholders at a meeting. Accordingly, it may be slightly easier to obtain shareholder approval of a plan of arrangement. Advantage > Plan of Arrangement
- Fiduciary Outs. In a transaction structured as
a plan of arrangement, the target board's fiduciary
out typically expires following receipt of shareholder
approval of the transaction. For a take-over bid, the target
board's fiduciary out typically continues until the bidder takes up and pays for securities under its bid. If there are regulatory approvals that are expected to take a significant amount of time to obtain, the plan of
arrangement structure provides the bidder with increased deal certainty by eliminating the target board's fiduciary out in the period following the shareholder meeting prior to closing. Advantage > Plan of Arrangement (bidder) / Take-over bid (target)
- Squeeze-out Mechanics. If a plan of
arrangement is approved by the court, the bidder will be able to
acquire 100% of the target's securities (and squeeze-out
any shareholders that did not support the acquisition) in
a single step at closing. This may be an important factor in
the acquirer's debt financing. With a take-over bid, the
bidder will generally be able to squeeze-out the minority
shareholders of the target if at least two-thirds
of its securities are tendered, but the squeeze-out will need to occur in a second-step transaction after the take-over bid is completed and is dependent on no material change occurring between the date of the original transaction and the date of the squeeze-out. Advantage > Plan of Arrangement
- Ability to Extend. In a take-over bid the bidder can easily extend the bid in order to continue soliciting tenders if the minimum tender condition is not yet met. In contrast, the adjournment of a shareholders' meeting can be cumbersome, and approval of a plan of arrangement is all-or-nothing – if the two-thirds shareholder approval is not obtained, the deal with fail. Advantage > Take-over Bid
要约收购还是安排计划: 主要考量因素 - 第二篇
- 成功的门槛。安排计划通常需要获得股东会议上所行使的表决权总数的三分之二的票数。要约收购以多数证券接受收购为条件。因此，要约收购的成功门槛略高，因为它需要超过50%的收购方以外的证券持有人的支持，而批准一项安排只需要股东在会议上所行使的表决权总数的三分之二。因此，获得股东对安排计划的批准可能稍微容易一些。 优势>安排计划
- 受信义务例外条款。在一个安排计划形式的交易中，目标公司董事会的受信义务例外条款通常在获得股东对交易的批准后截止。在一个要约收购形式的交易中，目标公司董事会的受信义务例外条款通常会继续进行，直到要约人接受并支付其收购的证券。如果预计将需要大量时间获得监管部门的批准，安排计划由于可以在股东大会结束后的过渡期解除受信义务例外条款，从而提高收购方的交易确定性。 优势>安排计划（收购方）/ 要约收购（目标公司）
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