Before a Public Takeover Bid | Belgium | Global Public M&A Guide

3. Before a Public Takeover Bid

[Last updated: 1 January 2025, unless otherwise noted]

3.1 Shareholding rights and powers

The table below provides an overview of the respective rights and powers that typically apply to different levels of shareholding within a Belgian listed limited liability company (naamloze vennootschap/société anonyme) whose shares are listed on the regulated market of Euronext Brussels:

Shareholding	Rights
One share	The right to attend and vote at general shareholders' meetings. The right to challenge resolutions of general shareholders' meetings. The right to obtain a copy of the documentation submitted to general shareholders' meetings. The right to submit questions to the directors and statutory auditors at general shareholders' meetings (either orally at the meeting, or in writing prior to the meeting). The right to request the nullity of decisions of general shareholders' meetings for irregularities as to form, process, or other reasons. In case of a merger or de-merger, the right to file a liability claim against directors or to request the nullity of the merger or de- merger. The right to petition the enterprise court for the dissolution of the company (a) for legal reasons, or (b) if, due to losses incurred, the ratio of net assets to share capital (on an unconsolidated basis in accordance with Belgian accounting law) is lower than EUR 61,500. The right to petition the court in case of (b) is also available to any interested party, including also creditors of the company.
2. 1% or shares representing EUR 1,250,000 of its share capital	The right to file a minority claim against the directors on behalf of the company. The right to ask, subject to certain conditions, the Enterprise Court to appoint an expert to review accounting records and acts of the company's corporate bodies.
3. 3%	The right to put additional items on the agenda of a general shareholders' meeting and to table draft resolutions for items on the agenda.
4. 10%	The right to request the board of directors to convene a general shareholders' meeting.
5. More than 20% of the votes at a general shareholder's meeting(1)	The right to block changes to the corporate purpose clause of the company.
6. 25% of the votes at a general shareholders' meeting	The ability to require the dissolution of the company if the ratio of the company’s statutory (unconsolidated) net equity to the company’s share capital has dropped below 25%.
7. More than 25% of the votes at a general shareholders' meeting⁽¹⁾	The ability at a general shareholders’ meeting to block: any other changes to the articles of association, mergers, de-mergers, capital increases, capital reductions, and dissolution of the company (subject to item 6 above); the authorization of the board of directors to increase the company’s share capital without further shareholder approval (the so-called "authorized capital"); and the disapplication (limitation or cancellation) of the preferential subscription right of existing shareholders in case of share issues in cash, or issues of convertible bonds or subscription rights (warrants).
8. 30%	The ability to petition the Commercial Court to squeeze out a shareholder and force the shareholder to sell its stake to the plaintiff for good cause.
9. More than 33.33% of the votes at a general shareholders' meeting	The ability at a general shareholders' meeting to block amendments to the articles of association in order to introduce the double "loyalty" vote for shareholders.
10. More than 50% of the votes at a general shareholders' meeting	Legal control and the ability at a general shareholders' meeting to: appoint and dismiss directors and to approve the remuneration and, as relevant, severance package of directors; approve certain aspects of the remuneration and severance package of executive management; appoint and dismiss statutory auditors and to approve their remuneration; approve the annual financial statements (including the remuneration report of the remuneration committee of the board of directors); grant discharge from liability to the directors and statutory auditor for the performance of their mandate; take decisions for which no special majority is required. take decisions which grant to third parties rights that have a significant influence on the company’s assets or create a significant debt or liability at its expense where the exercise thereof is conditional on a change of control over the company; and take decisions concerning a transfer of assets that relate to three quarters or more of the assets of the company.
11. 66.66% of the votes at a general shareholders' meeting⁽¹⁾	The ability at a general shareholders' meeting to approve amendments to the articles of association in order to introduce the double "loyalty" vote for shareholders.
12. 75% of the votes at a general shareholders' meeting⁽¹⁾	The ability at a general shareholders' meeting to approve: any changes to the articles of association (other than changes to the corporate purpose clause), mergers, de-mergers, capital increases, capital reductions, and dissolution of the company (subject to item 6 above); the authorization of the board of directors to increase the company's share capital without further shareholder approval (the so-called authorized capital); the dis-application (limitation or cancellation) of the preferential subscription right of existing shareholders in case of share issues in cash, or issues of convertible bonds or subscription rights (warrants); and the cross-border conversion of the company.
13. 80% of the votes at a general shareholders' meeting(1)	The ability at a general shareholders' meeting to approve: changes to the corporate purpose clause of the company; and the authorization of the board to repurchase or dispose of the company's shares.
14. 95%	The possibility to force all other shareholders to sell their shares through a public bid (a "squeeze-out").

Note: (1) In order to exercise these voting rights, the general shareholders' meeting must have an attendance of at least 50% of the outstanding shares representing the share capital. If this attendance requirement is not met and if a new general shareholders' meeting is convened with the same agenda, the attendance requirement does not apply at the new meeting.

3.2 Restrictions and careful planning
Belgian law contains a number of rules that already apply before a public takeover bid is announced. These rules impose restrictions and hurdles in relation to prior stake building by a bidder, announcements of a potential takeover bid by a bidder or a target company, and prior due diligence by a potential bidder. The main restrictions and hurdles have been summarized below. Some careful planning is therefore necessary if a potential bidder or target company intends to start up a process that is to lead towards a public takeover bid. See also 4.3 (below).

3.3 Acting in concert

The Belgian takeover rules contain specific provisions that apply to persons that "act in concert". A notable example is the obligation that applies if one or more persons in a group of persons acting in concert acquire voting securities as a result of which the group in the aggregate would pass the 30% threshold. In such case, the members of the group will have a joint obligation to carry out a mandatory takeover bid, even though the individual group members do not pass the 30% threshold. It should be noted that the 30% threshold refers to the number of securities with voting rights, and not the number of voting rights. Accordingly, the double voting right for listed companies, which is permitted under the Belgian Companies and Associations Code, will not be taken into account for the purpose of the takeover rules set out in the Belgian Act of 1 April 2007 on public takeover bids.
For the purpose of the Belgian takeover bid rules, persons "act in concert" if they:

collaborate with the bidder, the target company or with any other person on the basis of an express or silent, oral or written, agreement, aimed at acquiring control over the target company, frustrating the success of a takeover bid, or maintaining control over the target company; or
have entered into an agreement relating to the exercise in concert of their voting rights with a view to having a lasting common policy vis-à-vis the target company.
Persons that are affiliates of each other are deemed to act in concert or to have entered into an agreement to act in concert. An entity is an affiliate of another entity if it is controlled by the latter entity, or if it is controlled by the same entity as the latter entity. The concept of control is defined as the de jure or de facto ability to exercise a decisive influence over the appointment or dismissal of directors of the target company, or over the orientation of the target company's policies.
Based on these definitions and criteria, the target company could be one of the persons with whom a shareholder acts in concert or is deemed to act in concert. This is, for example, the case where a target company is already controlled by a shareholder.
The concept of persons acting in concert is very broad, and in practice many issues can arise to determine whether persons act or do not act in concert. The FSMA and the Markets Court, which has jurisdiction over claims related to the Belgian takeover bid rules, also appear to adhere to a very broad interpretation of "acting in concert".

3.4 Insider dealing and market abuse

Before, during and after a takeover bid, the normal rules regarding insider dealing and market abuse remain applicable. The rules include, among other things, that manipulation of the target's stock price, e.g., by creating misleading rumors, is prohibited. In addition, the rules prohibit insider dealing, improper disclosure of inside information and misuse of information (see 6.2).

3.5 Disclosure of shareholdings and trading

The general rules regarding the disclosure of significant shareholdings apply before and during a public takeover bid. Pursuant to these rules, if a potential bidder starts building up a stake in the target company, it will be obliged to announce its stake if the voting rights attached to its stake have passed an applicable disclosure threshold. The relevant disclosure thresholds in Belgium are 5% and multiples of 5% (10%, 15%, etc.). Several listed companies also apply a lower threshold than the initial threshold of 5% (in most cases 3%). Additional thresholds can also apply. When determining whether a threshold has been passed, a potential bidder must also take into account the voting securities held by the parties with whom it acts in concert or may be deemed to act in concert (see 3.3). These parties include affiliates. The parties could also include existing shareholders of the target company with whom the potential bidder has entered into specific arrangements such as call option agreements.

As of the announcement of the public takeover bid, the bidder must disclose the number of voting securities it already has in the target company. Furthermore, as from the announcement, additional disclosures will need to be made by the target company as well as the bidder, persons acting in concert with the bidder or the target company, and certain other persons. Notably, each business day during the takeover bid period, the target company (or the other aforementioned persons, as relevant) must inform the FSMA of the acquisition or disposal of voting securities (or securities conferring the right to voting rights) issued by the target company, the bidder or the company whose securities are offered as consideration in the takeover bid (as the case may be).

3.6 Disclosures by the target company

The target company must continue to comply with the general rules regarding disclosure and transparency. These rules include that a company must as soon as possible announce all inside information (see 6.2). The facts surrounding the preparation of a public takeover bid may constitute inside information. If so, the target company must announce this. However, the board of the target company can delay the announcement if it believes that a disclosure would not be in the legitimate interest of the company. This could, for instance, be the case if the target's board believes that an early disclosure would prejudice the negotiations regarding a bid. A delay of the announcement, however, is only permitted if the non-disclosure does not entail the risk that the public is misled, and that the company can keep the relevant information confidential. The target company will have to provide a written explanation to the FSMA of how these conditions are being met.

3.7 Announcements of a public takeover bid

Pursuant to Belgian public takeover bid rules, only the FSMA can announce a public takeover bid. Prior to the public announcement of the takeover bid by the FSMA, no-one is permitted to announce the launching of a public takeover bid. This prohibition does not only apply to a bidder, but also to the target company even if the target company has to announce the launch of a bid pursuant to the general disclosure obligations described in 3.6.

A bidder that intends to announce a public takeover bid must first inform the FSMA of its intention and obtain the FSMA's permission to make the announcement. In addition, the bidder will at that time have to make the necessary filings for the actual launching of a public takeover bid (including providing proof of certainty of funds in the event the offer includes cash, and a draft prospectus), since as soon as the public takeover bid is announced, it can normally no longer be withdrawn (except in certain circumstances).

If there are rumors or leaks that a potential bidder intends to launch a public takeover bid, the FSMA could force a party to make an announcement as to its intentions regarding a public takeover bid (see 3.8).
Specific rules apply to self-tenders by the issuer of securities.

3.8 Early disclosures – Put-up or shut-up

Early disclosures required by the FSMA – Whenever required for the good functioning of the markets, the FSMA has the right to request that a person that could be involved in a possible public takeover bid make an announcement without delay. If the latter person does not make such disclosure, the FSMA can make the announcement instead. This type of disclosure is often made when the takeover bid cannot yet be formally launched, e.g., for practical purposes or due to certain third party approvals, but an announcement is nevertheless appropriate to inform the market.
Put-up or shut-up – The FSMA can also force a person to make an announcement as to whether or not they intend to carry out a public takeover bid if this person (themself or via intermediaries) made statements that have raised questions with the public as to such person’s intentions. The FSMA can impose a maximum window of 10 business days within which the announcement must be made. A person that confirms their intention to launch a public takeover bid must launch such takeover bid within a term to be agreed upon with the FSMA. If a person does not confirm, within the term imposed by the FSMA, their intention to launch a public takeover bid within a reasonable period, they cannot (and the persons acting in concert with them cannot) launch a takeover bid for the securities of the target company for a term of six months following the publication of such announcement (or the expiry of the term imposed by the FSMA to make such announcement).

3.9 Due diligence

The Belgian public takeover bid rules do not contain specific rules regarding the question of whether a prior due diligence can be organized, nor how such due diligence should be organized. Be that as it may, the concept of a prior due diligence or pre-acquisition review by a bidder is generally accepted by the market and the FSMA. Appropriate mechanisms have been developed in practice to organize a due diligence or pre-acquisition review and to cope with potential market abuse and early disclosure concerns. These include the use of strict confidentiality procedures and data rooms.

Due diligence is usually only made possible in a friendly takeover scenario. A target company will normally allow due diligence on non-public information only after having received a serious indication of interest by the potential bidder. Customarily, the due diligence of non-public information will be less comprehensive than in a private acquisition context.

In the event of a counter bid, the counter bidder may request access to the same information that was made available by the target company to the first bidder.

The mere fact of having access to inside information relating to another company and using it in the context of a public takeover bid for the purpose of gaining control of that company or proposing a merger with that company should not be deemed to constitute insider dealing, provided that the inside information has been made public or has otherwise ceased to constitute inside information, e.g., via disclosure in the prospectus of the bidder, or a disclosure by the target company (see 6.2).

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