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Reverse break fees – Särskilt i ljuset av fullföljandevillkor och styrelseneutralitetsregeln

Rasoul, Sirre LU (2020) JURM02 20201
Department of Law
Faculty of Law
Abstract (Swedish)
Formen för avtalsslut vid publika förvärv som ges av takeover-reglerna kännetecknas av att budgivaren är bunden av ett offentliggjort uppköpserbjudande. Budgivarens bundenhet vid budet är dock inte absolut. En budgivare får enligt punkt II.4 och II.5 takeover-reglerna uppställa fullföljandevillkor för budets genomförande. Takeover-reglerna ger att ett fullföljandevillkor som möjliggör för budgivaren att återkalla ett offentligt uppköpserbjudande måste vara objektivt verifierbart, inte vara utformat så att budgivaren själv har ett avgörande inflytande över dess uppfyllande, utformat på ett enkelt och tydligt sätt och vara av väsentlig betydelse för budgivarens förvärv av målbolaget.

Möjligheterna för budgivaren att uppställa... (More)
Formen för avtalsslut vid publika förvärv som ges av takeover-reglerna kännetecknas av att budgivaren är bunden av ett offentliggjort uppköpserbjudande. Budgivarens bundenhet vid budet är dock inte absolut. En budgivare får enligt punkt II.4 och II.5 takeover-reglerna uppställa fullföljandevillkor för budets genomförande. Takeover-reglerna ger att ett fullföljandevillkor som möjliggör för budgivaren att återkalla ett offentligt uppköpserbjudande måste vara objektivt verifierbart, inte vara utformat så att budgivaren själv har ett avgörande inflytande över dess uppfyllande, utformat på ett enkelt och tydligt sätt och vara av väsentlig betydelse för budgivarens förvärv av målbolaget.

Möjligheterna för budgivaren att uppställa fullföljandevillkor innebär en risk att budet inte fullfölj vilket kan medföra att målbolaget och dess aktieägare åsamkas skada. Målbolagets verksamhet exponeras för störningar samt ökad volatilitet för aktien med en slutlig sänkning av den jämfört med innan erbjudandets offentliggörande. Ett sätt att kompensera målbolaget för skadorna är med reverse break fees. Reverse break fees ålägger budgivaren att ersätta målbolaget med en viss summa om budet inte genomförs på grund av på förhand bestämda omständigheter, exempelvis att nödvändiga myndighetstillstånd inte erhålls.

Uppsatsens slutsats ger stöd för att reverse break fees bör användas i situationer där omständigheten som innebär att erbjudandet inte fullföljs inte är hänförlig till målbolagets eller dess aktieägares kontrollsfär, exempelvis när budet är förenat med ett fullföljandevillkor om erhållande av finansiering eller att nödvändiga myndighetstillstånd ska erhållas. Dessutom bör inte ett tak uppställas för hur stor reverse break feen får vara utan den ska kunna sättas fritt av budgivaren och målbolaget.

Inget hinder mot användandet av reverse break fees finns enligt styrelseneutralitetsregeln i 5 kap. 1 § LUA och takeover-reglernas skyddsintressen som ges av takeover-reglernas principer och syftet med förbudet mot budrelaterade arrangemang i punkt II.17a. Reverse break fees är förenliga med 5 kap. 1 § LUA då de inte kan anses vara ägnade att försvåra för genomförandet eller lämnandet av ett erbjudande. Skyddsintressena som ges i takeover-reglernas principer tar sikte på att skydda målbolaget, aktieägarna samt aktiemarknaden. Även målbolagets anställda skyddas indirekt av principerna. En reverse break fee är förenlig med dessa skyddsintressen. Som huvudregel är reverse break fees också förenliga med syftet bakom förbudet mot budrelaterade arrangemang. Ett undantag är dock om målbolaget accepterar att utbetalningen av reverse break feen ska vara villkorad av att målbolaget företar konkurrenshämmande åtgärder, exempelvis att målbolaget inte ska förhandla med andra budgivare eller att det inte ska lämna ut information till andra budgivare. I de fallen är åtagandet allt för likt ett budrelaterat arrangemang och kan dessutom skada konkurrensen vid offentliga uppköpserbjudanden vilket strider mot syftet bakom punkt II.17a. (Less)
Abstract
The conclusion of a contract in public takeovers as set forth in the Swedish Takeover Rules is characterized by that the offeror has to honor its offer. However, the offeror's commitment to the offer is not absolute. An offeror may, in accordance with rule II.4 and II.5 of the Swedish Takeover Rules, stipulate conditions for the completion of the offer that must fulfilled in order for the offeror to honor the offer. The Takeover Rules stipulates that completion conditions must be objectively determinable, not be formulated in such a way that the offeror has a decisive influence over its satisfaction, formulated with simplicity and clarity, and be of material importance to the offeror’s acquisition of the offeree.

The possibilities for... (More)
The conclusion of a contract in public takeovers as set forth in the Swedish Takeover Rules is characterized by that the offeror has to honor its offer. However, the offeror's commitment to the offer is not absolute. An offeror may, in accordance with rule II.4 and II.5 of the Swedish Takeover Rules, stipulate conditions for the completion of the offer that must fulfilled in order for the offeror to honor the offer. The Takeover Rules stipulates that completion conditions must be objectively determinable, not be formulated in such a way that the offeror has a decisive influence over its satisfaction, formulated with simplicity and clarity, and be of material importance to the offeror’s acquisition of the offeree.

The possibilities for the offeror to stipulate completion conditions actualizes a risk that the offer will not be honored, which may result in damage for the offeree and its shareholders. The offeree's operations are exposed to disruptions and increased volatility of the stock price with a final reduction of it compared to before the announcement of the offer. One way for the offeror to compensate the offeree if the offer is not honored is with a reverse break fee. Reverse break fees oblige the offeror to compensate the offeree with a certain amount if the offer is not honored due to pre-determined circumstances, for example, that the required regulatory permits are not obtained.

The paper concludes that reverse break fees should be used in situations where the circumstance that the offer is not fulfilled is not attributable to the offeree's or its shareholder’s sphere of control, for example, when the offer is stipulated with a completion condition regarding obtaining financing or that necessary regulatory permits must be obtained. In addition, no limitations should be set regarding how high the reverse break fee is allowed to be. Instead, the offeror and offeree should be able to set the amount in accordance with their preferences.

The paper also concludes that there is no obstacle for the use of reverse break fees in accordance with the board neutrality rule in Chapter 5, section 1 LUA and the interests protected by the limitation on offer-related arrangements and the Swedish Takeover Rules. Reverse break fees are in accordance with with Chapter 5, section 1 LUA because they cannot be considered an action that may result in making it more difficult to submit or complete an offer. The interests protected by the Swedish Takeover Rules’ principles are aimed at protecting the offeree, the shareholders, and the stock market. The offeree's employees are also indirectly protected by the principles. A reverse break fee is compatible with these protected interests. As a general rule, reverse break fees are also consistent with the purpose behind the limitations on offer-related arrangements because it does not harm bid competition. An exception is if a condition of the payment of the reverse break fee is that the offeree has to undertake anti-competitive measures, for example, that the offeree shall not negotiate with other potential offerors or that it shall not disclose information to other offerors. In those cases, the commitment is too similar to offer-related arrangements and also harms bid competition which is against the purpose of rule II.17a. (Less)
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author
Rasoul, Sirre LU
supervisor
organization
alternative title
Reverse break fees – Especially in light of completion conditions and the board neutrality rule
course
JURM02 20201
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
förmögenhetsrätt, aktiemarknadsrätt, reverse break fees, offentliga uppköpserbjudanden
language
Swedish
id
9025772
date added to LUP
2020-08-25 18:48:40
date last changed
2020-08-25 18:48:40
@misc{9025772,
  abstract     = {The conclusion of a contract in public takeovers as set forth in the Swedish Takeover Rules is characterized by that the offeror has to honor its offer. However, the offeror's commitment to the offer is not absolute. An offeror may, in accordance with rule II.4 and II.5 of the Swedish Takeover Rules, stipulate conditions for the completion of the offer that must fulfilled in order for the offeror to honor the offer. The Takeover Rules stipulates that completion conditions must be objectively determinable, not be formulated in such a way that the offeror has a decisive influence over its satisfaction, formulated with simplicity and clarity, and be of material importance to the offeror’s acquisition of the offeree.

The possibilities for the offeror to stipulate completion conditions actualizes a risk that the offer will not be honored, which may result in damage for the offeree and its shareholders. The offeree's operations are exposed to disruptions and increased volatility of the stock price with a final reduction of it compared to before the announcement of the offer. One way for the offeror to compensate the offeree if the offer is not honored is with a reverse break fee. Reverse break fees oblige the offeror to compensate the offeree with a certain amount if the offer is not honored due to pre-determined circumstances, for example, that the required regulatory permits are not obtained.

The paper concludes that reverse break fees should be used in situations where the circumstance that the offer is not fulfilled is not attributable to the offeree's or its shareholder’s sphere of control, for example, when the offer is stipulated with a completion condition regarding obtaining financing or that necessary regulatory permits must be obtained. In addition, no limitations should be set regarding how high the reverse break fee is allowed to be. Instead, the offeror and offeree should be able to set the amount in accordance with their preferences.

The paper also concludes that there is no obstacle for the use of reverse break fees in accordance with the board neutrality rule in Chapter 5, section 1 LUA and the interests protected by the limitation on offer-related arrangements and the Swedish Takeover Rules. Reverse break fees are in accordance with with Chapter 5, section 1 LUA because they cannot be considered an action that may result in making it more difficult to submit or complete an offer. The interests protected by the Swedish Takeover Rules’ principles are aimed at protecting the offeree, the shareholders, and the stock market. The offeree's employees are also indirectly protected by the principles. A reverse break fee is compatible with these protected interests. As a general rule, reverse break fees are also consistent with the purpose behind the limitations on offer-related arrangements because it does not harm bid competition. An exception is if a condition of the payment of the reverse break fee is that the offeree has to undertake anti-competitive measures, for example, that the offeree shall not negotiate with other potential offerors or that it shall not disclose information to other offerors. In those cases, the commitment is too similar to offer-related arrangements and also harms bid competition which is against the purpose of rule II.17a.},
  author       = {Rasoul, Sirre},
  keyword      = {förmögenhetsrätt,aktiemarknadsrätt,reverse break fees,offentliga uppköpserbjudanden},
  language     = {swe},
  note         = {Student Paper},
  title        = {Reverse break fees – Särskilt i ljuset av fullföljandevillkor och styrelseneutralitetsregeln},
  year         = {2020},
}