Guidance on compulsory acquisition without a prior mandatory offer

Compulsory acquisition of shares in a Norwegian public limited liability company following a voluntary offer and without a prior mandatory offer is regulated by Section 6-22 of the Securities Trading Act.

Introduction

Compulsory acquisition of remaining shares without a prior mandatory offer may be carried out subject to certain conditions following the completion of a voluntary offer. Finanstilsynet controls whether the conditions in Section 6-22 (3) of the Securities Trading Act are met.

Conditions for compulsory acquisition without a prior mandatory offer 

Where the offeror, after having made a voluntary offer, has acquired more than nine tenths of the voting shares of the target company and a corresponding proportion of the votes that can be cast at the general meeting, a compulsory acquisition of shares may be carried out without a prior mandatory offer having been made, provided the following conditions are met:

  1. compulsory acquisition is implemented within four weeks after the acquisition of shares through a voluntary offer having been completed,
  2. the redemption price corresponds at least to the lowest amount the offer price would have been in a mandatory offer, and
  3. a guarantee equivalent to that required for settlement of a mandatory offer is provided.

Guarantee Period

The guarantee period for the guarantee amount plus default interest is four weeks from the deadline for settlement of the compulsory acquisition. If, for example, the last deadline for settlement is a Monday, the four‑week period runs from the following Tuesday up to and including the Tuesday four weeks later at 16:30.

The control process

No later than five full business days before the planned date for implementation of the compulsory acquisition, the following must be submitted to Finanstilsynet:

  • Information form.
  • Draft guarantee text.
  • Completed form for questions related to price and transactions.
  • Draft board minutes of the offeror resolving to implement the compulsory acquisition in the target company, cf. Section 4‑25 (1) of the Public Limited Liability Companies Act. The compulsory acquisition must take effect after close of the market.
  • Draft confirmation from the settlement agent for the voluntary offer stating that payment has been made to those who accepted the voluntary offer. The confirmation must at a minimum include the name of the target company, the number of shares for which payment has been made, the total amount paid, and the date of payment.
  • Draft letter to minority shareholders, cf. Section 4‑25 (3) of the Public Limited Liability Companies Act.
  • Documentation showing the total number of shares issued by the target company (e.g. articles of association).

The processing time may be longer during holidays. Companies that are considering control processes that will run during holiday periods are recommended to contact Finanstilsynet well in advance of submission to plan the process. 

Provided that Finanstilsynet has confirmed that there are no further comments to the submitted documentation, the following must be submitted to Finanstilsynet before 12:00 (noon) on the same day the compulsory acquisition shall be implemented:

  • Issued and signed guarantee document sent directly from the bank issuing the guarantee.
  • Printout of the offeror’s VPS account showing that the offeror owns the required number of shares in the target company.
  • Signed confirmation from the settlement agent for the voluntary offer that payment has been made to those who have accepted the voluntary offer, together with a VPS statement documenting the payment execution/result. The VPS statement must at a minimum show the name of the target company, the number of shares for which payment has been made, the transaction amount, and the date of payment.
  • Confirmation that no changes have occurred to the information provided to Finanstilsynet during the control process.
  • Confirmation that the compulsory acquisition is implemented no later than four weeks after completion of the acquisition of shares under the voluntary offer.
  • Copy of the signed board minutes of the offeror resolving the compulsory acquisition in the target company, cf. Section 4‑25 (1) of the Public Limited Liability Companies Act.
  • Copy of the letter to minority shareholders, cf. Section 4‑25 (3).

Please note that the offeror should initiate dialogue regarding the timeline and approval process at an early stage. Applications for control and other written inquiries shall be sent to  takeovers@finanstilsynet.no.

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