Public M&A transactions in Ireland are governed by the M&A Act, which provides for the establishment of the Irish Acquisition Commission & Acquisition Rules. The rules have the force of law, while the Commission has the right to issue decrees & orders, which also have the force of law.
Ireland: Concluding Public M&A Transactions
Concluding an M&A deal in Ireland requires keeping in mind the following:
- acquiring a PLC in Ireland requires disclosing an offer to the target company's BOD before making any announcement regarding an upcoming deal.
- ensuring equal treatment of target companies’ shareholders.
- ensuring compliance with specific restrictions & obligations.
- preventing target companies’ BODs from taking specific actions without shareholders’ approval or purchasers’ consent.
- providing all bidders with equal access to information.
BODs of target companies must receive competent advice on the acquisition of Irish PLCs with respect to each offer. BODs must send its shareholders a circular setting out the nature & source of such recommendations, along with thoughtful views and opinions on the offer. An independent committee may be required to review the proposal in the event of a conflict of interest.
Prior to the announcement of an offer, bidders & relevant consultants must maintain strict confidentiality. Once the identity of a bidder is made public, the target company may request the Commission to set a deadline within which the bidder must confirm or opt out of a public M&A transaction in Ireland. If a bidder announces their unwillingness to make an offer, they may not be able to make an offer within one year.
Ireland: Regulation of Public M&A Transactions
In addition to the general regulatory framework, there’s also additional regulations applicable to different financial institutions, such as insurance companies, pharmaceutical companies, airlines and telecom operators.
Making an initial public offer in Ireland requires bidders to include in a contract a wide range of terms. Bidders cannot refer to the cancellation condition of the offer, except in cases where the circumstances giving rise to such a right are significant in the context of the offer.
2017 saw the M&A Commission issue a statement on the conditions under which an offer can be withdrawn. They include:
- termination of an agreement;
- failure of either of the parties to comply with specific terms of an agreement.
Ireland: Financing Public M&As
Initiating a public M&A transaction in Ireland requires bidders to declare their firm intention to make an offer pursuant to the M&A Rules. If the offer is monetary or there’s a monetary alternative, bidders’ financial advisors are required to confirm that the bidders have sufficient resources to make an offer. The document containing an offer must state the source of funding (including the names of the main lenders).
Concluding a securities transaction in Ireland requires including in the document containing an offer additional information regarding the target company and its securities transactions.
Expulsion of Minority Shareholders of Irish PLCs
Acquiring 100% control of an Irish PLC implies that the buyer can use the statutory procedure to force the acquisition of minority shareholders' shares.
Launching the crowding-out procedure requires the acquisition of 90% of target companies’ share capital. Set out in the Company Act, the crowding-out procedure requires bidders to receive 80% of target companies’ share capital within four months of the publication of the offer.
If you’re looking for information on regulation of M&A transactions in Ireland, are considering entering the securities market in Ireland or seeking to register a PLC in Ireland, you should definitely retain services of IQ Decision UK. Please, keep in mind that our legal advisors can also lend you a helping hand with any other legal issues you’re facing in this regard.