[Last updated: 1 January 2024, unless otherwise noted]

4.1 Types of public takeover bid

The public takeover bid is the most common type of transaction that is used in Belgium to effect a takeover of a listed company in Belgium.

The public takeover bid is, in essence, a contractual offer by a bidder to acquire the shares (and other securities conferring voting rights) issued by the target company. There are three main forms of takeover bids in Belgium, namely the voluntary takeover bid, the mandatory takeover bid, and the squeeze-out bid:

• Voluntary public takeover bid – This is a public takeover bid in which a bidder makes an offer on a voluntary basis for all of the voting securities issued by the target. Subject to certain restrictions, the takeover bid can contain limited conditions precedent, allowing the bidder to withdraw the takeover bid if the conditions precedent have not been met such as a minimum acceptance level, and the absence of material adverse changes (see 4.2).
• Mandatory public takeover bid – This is a public takeover that a bidder is obliged to make if, as a result of an acquisition of voting securities, the bidder (alone or in concert with others) crosses a threshold of more than 30% of the outstanding voting securities of the target company. As the bidder is legally obliged to carry out the public takeover bid, the takeover bid cannot contain any conditions precedent, and the price offered cannot be lower than a statutory minimum price (see 4.3).
• Squeeze-out bid – A person holding 95% of the voting securities of a company can force all of the other holders of voting securities (and securities conferring the right to voting securities) to tender their securities by means of a squeeze-out bid. A squeeze-out bid can either be made on a stand-alone basis by any person that already holds 95% of the voting securities, or as part of a (voluntary or mandatory) public takeover bid by a bidder who is able to acquire 95% of the outstanding voting securities via the public takeover bid (see 7.1).

In certain cases, the takeover is structured via a corporate merger between companies, whereby the merger is effected when it is approved by the general shareholders' meeting of both companies involved, and whereby either both companies are merged into a new company or one company is absorbed by the other company. The structure of a corporate merger offers some advantages as compared to a takeover bid, as it allows the companies to squeeze out all shareholders of the companies involved in the merger and to make them shareholders in the surviving entity. The corporate merger also has some disadvantages, as it requires the co-operation of the board of the target company and as the scope for a cash portion of the merger consideration is limited to 10%. As a result, the corporate merger is sometimes used if the merger consideration consists exclusively of new shares in the surviving entity, or after a takeover when the bidder has already obtained a significant shareholding in the target company and has the desire to squeeze-out all minority shareholders of the target company by making them shareholders of the bidder.

A scheme of arrangement structure does not exist under Belgian law.

4.2 Voluntary public takeover bid

The voluntary public takeover bid consists of a contractual offer on a voluntary basis for all the voting securities issued by the target company.

• The public takeover bid offer must apply to all voting securities of the target company, as well as all other securities issued by the target company conferring the right to acquire voting securities of the target company. A partial tender offer (seeking less than 100%) is not permitted, except in the case of a self-tender by a company to acquire its own shares.
• The bidder is, in principle, free to determine the price and (absent any pre-existing controlling interest in the target company) the form of consideration offered to the target shareholders. The offered price may be paid in cash, securities or a combination of cash and securities. There is no minimum price for a voluntary takeover bid, but the terms of the takeover bid, including the price, must be such that they could reasonably be expected to allow the takeover bid to succeed. If there are different categories of securities, (such as, for example, subscription rights for shares or convertible bonds issued by the target company) different prices per category can only be due to the characteristics of such categories.
• The bidder can make the takeover bid subject to merger control clearance and, subject to prior approval by the FSMA, certain other conditions precedent. Conditions precedent that are usually accepted by the FSMA are a minimum acceptance level, and the condition that there should not have been a material adverse change in the target company and/or the broader market.
• During the takeover bid period, the bidder cannot withdraw or amend the public takeover bid (unless to the benefit of the security holders of the target company). Subject to prior permission by the FSMA, a bidder can amend or withdraw the takeover bid in certain limited cases, such as the issuance of new voting securities by the target company in excess of 1% of the outstanding voting securities, or decisions or transactions by the target company that have or could have a significant change in the composition of the assets or liabilities of the target company, or obligations that were assumed without effective consideration. The takeover bid can also be withdrawn in the event of a higher bid or counter bid by a third party, when the conditions precedent of the takeover bid were not met, or subject to the permission of the FSMA in exceptional circumstances that prevent the takeover bid taking place for objective reasons outside the control of the bidder.
• Pending a takeover bid, any person can launch a counter bid or higher bid. The intention to launch a counter bid or higher bid must be announced at the latest two calendar days before the expiry of the acceptance period of the most recent bid, counter bid or higher bid. The price that is offered in a counter bid or higher bid must be at least 5% higher than the price offered in the most recent bid, counter bid or higher bid (as the case may be). In addition, the conditions of the counter or higher bid may not be more restrictive than the conditions of the most recent bid, counter bid or higher bid. The counter bid or higher bid may, however, be made subject to the condition precedent of merger control approvals.

4.3 Mandatory public takeover bid

In certain cases, a public takeover bid is legally required:

• if a person, as a result of an acquisition of voting securities (alone or in concert with others), owns more than 30% of the outstanding voting securities of a company, this person is obliged to make an offer for all of the remaining outstanding voting securities issued by the company (and securities issued by the company conferring the right to acquire voting securities of the target company); and
• a mandatory takeover bid can also be triggered if a person acquires a controlling participation in a holding company that holds more than 30% of the voting securities of the target company, provided that the holding company's shareholding in the target company represents (based on its last publicly filed unconsolidated financial statements) more than half of the holding company's net assets or more than half of its average net results during the last three financial years.

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.

The Belgian takeover rules provide for a number of circumstances in which there is no obligation to carry out a mandatory takeover bid even though a person has acquired more than 30% of the outstanding voting securities. These include situations where: (i) the stake of more than 30% is acquired as a result of a voluntary takeover bid; (ii) the stake is acquired from an affiliate; (iii) a third party exercises control over the target company or holds a larger shareholding in the company than the party that acquired more than 30%; (iv) the stake is acquired within the framework of a subscription to a capital increase with preferential subscription rights for the shareholders that has been decided upon by the general shareholders' meeting of the company, i.e., a rights offering; and (v) the stake is acquired within the framework of a corporate merger, provided that the person who, alone or acting in concert with others, acquired more than 30% of the voting rights in the acquiring or surviving company did not exercise the majority of the votes approving the merger at the general shareholders' meeting of the company to be merged.

As a mandatory takeover bid is required by law it cannot be made conditional, nor can it be withdrawn.

The price offered in a mandatory public takeover bid must be equal to at least the higher of: (i) the highest price paid by the bidder (or any person acting in concert with the bidder) during the period of 12 months preceding the announcement of the takeover bid; and (ii) the weighted average trading price for the securities of the target company on the most liquid market during the last 30 calendar days prior to the moment giving rise to the public takeover bid obligation. The FSMA has the power to allow or require an amendment to the price, including if it appears that, apart from the consideration offered, special, direct or indirect advantages are being granted to certain transferors of the securities.

The consideration offered can consist of cash, securities or a combination of both. A cash alternative must be offered (in an amount corresponding to the cash value of the consideration securities at the time of the filing of the takeover bid with the FSMA) if: (i) the consideration does not consist of liquid securities that are admitted to trading on a regulated market in Belgium or elsewhere in the EEA; or (ii) during the term of 12 months prior to the announcement of the mandatory public takeover bid or during the takeover bid period, the bidder (or a person acting in concert) acquired securities in consideration of a payment in cash (or agreed to make such cash payment).

A mandatory public takeover bid must follow the same rules as a voluntary public takeover bid, except in terms of conditionality and price (as referred to above).

4.4 Certain funds requirement

If the consideration that is offered in the takeover bid consists of cash, the funds that are necessary to complete the takeover bid must be available, either on an account with an EEA-based credit institution, or in the form of an irrevocable and unconditional credit that has been granted to the bidder by an EEA-based credit institution. The funds must be blocked in order to guarantee the payment of the consideration for the securities that are acquired in the bid and can only be used for such purposes. The bidder must provide the proof of certain funds when it notifies the FSMA of its intention to launch a public takeover bid. The FSMA will not announce the public takeover bid unless it has been provided with proof of certain funds.

If the offered consideration includes securities, the bidder must have the power to issue (or have the ability to ensure that the issuer of the securities issues) the securities in sufficient number, amount and time.

4.5 Offer documents

A number of different documents are common and/or required in the context of a public takeover bid. Some notable documents and some of the applicable requirements imposed by Belgian takeover rules are set out in more detail below.

1. Pre-transaction documents and contractual documentation

   In the preparatory phase certain documents are often concluded with a view to organizing and structuring the transaction. Notable examples of such documents are confidentiality agreements, irrevocable undertakings, share purchase agreements and support undertakings by the target company. Confidentiality agreements are particularly important in situations where a target company intends to offer potential bidders the possibility of carrying out a due diligence review. Irrevocable undertakings are sometimes used within the context of a voluntary takeover bid to try to secure prior support from important shareholders of the target company. The effect and legal consequences and enforceability of such undertakings depend on their terms. Share purchase agreements can be used for stake-building purposes before or during a takeover bid. If the bidder crosses the 30% shareholding threshold via a share purchase agreement, this will trigger a mandatory takeover bid. In friendly takeover bids, the bidder and the target company often conclude a prior agreement regarding the terms and conditions of the takeover bid, the support that will be granted by the target board for the takeover bid, and certain other elements (see also 6.3).

2. Prospectus

   The bidder must prepare a prospectus in connection with the takeover bid. The prospectus must mention the terms and conditions of the takeover bid and must contain certain necessary information, taking into account the characteristics of the bidder, the target company, the securities to which the takeover bid applies and (as the case may be) the securities offered as consideration, in order to allow security holders of the target company to come to an informed opinion as to the transaction. The information must be presented in a form that is easy to analyze and understand. In addition, the Belgian public takeover bid rules contain a list of specific minimum information that is to be included in the prospectus. The prospectus must be approved by the FSMA before it can be published.

   Any new significant fact, substantial error or incorrectness regarding the information included in the prospectus that could have an influence on the assessment of the bid and that arises or is discovered during the period as of the approval of the prospectus by the FSMA and the expiry of the acceptance period for the bid, must be mentioned in a supplement to the prospectus. The supplement must be approved by the FSMA and disseminated in the same manner as the prospectus.

   The prospectus must be prepared in Dutch and in French. If the bidder can show that the target company usually publishes its financial information in only one of the Belgian official languages (Dutch, French or German) or in a language that is customary in the international financial sphere (such as English), the FSMA can accept a prospectus that is only prepared in the applicable official language or such other language. The summary of the prospectus must be prepared in Dutch and in French. If the advertising, announcements and other documentation regarding the takeover bid are disseminated in only one of the Belgian official languages, the summary may be disseminated in this language only.

3. Response memorandum

   The board of directors of the target company must prepare an opinion with respect to the takeover bid, called a "response memorandum" (memorie van antwoord/mémoire en réponse). In the response memorandum, the board of directors should address among other things, any comments it may have on the prospectus of the bidder and any transfer restrictions on the shares of the target company of which it is aware (as the case may be). The response memorandum should also contain the opinion of the board of directors with respect to the takeover bid, including the board's opinion on: (i) the consequences of the takeover bid, taking into account the whole of the interests of the target company, its security holders, its creditors and its employees (including the employment in general); (ii) the strategic plans of the bidder for the target company and the probable consequences of these plans with regard to the results, employment and operational sites of the target company; and (iii) whether the board of directors recommends securities holders to accept the takeover bid. The directors must individually indicate in the response memorandum whether they will tender any securities in the target company held by them. They should provide the same information for the shareholders that they represent in fact (as the case may be). If the directors or the shareholders that they represent in fact do not have the same opinion or intention, the different opinions and intentions should be mentioned.

   The board must send its opinion on the takeover bid to representatives of the target company or, in the absence of such representatives, the employees of the target company. In practice, if there is a works council, the target's board will already involve the works council prior to the finalization of the response memorandum. If the board has received the position of the works council, this must be attached to the response memorandum.

   The response memorandum must be approved by the FSMA before it can be published. The response memorandum is often included in the prospectus of the bidder, in particular in the event of a friendly tender offer, but it can also be disseminated separately.

   Any new significant fact or substantial error or incorrectness regarding the information included in the response memorandum that could have an influence on the assessment of the bid and that arises or is discovered during the period between the approval of the response memorandum and the completion of the bid, must be mentioned in a supplement to the response memorandum. The supplement must be approved by the FSMA and disseminated in the same manner as the response memorandum.

   In general, all information regarding the bid that is provided by a target company (or its intermediaries) and in whichever form, must always be compatible with the information in the response memorandum.

   The response memorandum must be prepared in Dutch and in French. If the target company can show that it usually publishes its financial information in only one of the Belgian official languages (Dutch, French or German) or in a language that is customary in the international financial sphere (such as English), the FSMA can accept a prospectus that is only prepared in the applicable official language or such other language. The foregoing is subject to possible stricter language requirements imposed by the individual regions in Belgium.

4. Fairness opinion

   There is no general legal obligation for a bidder or a target company to obtain a fairness opinion for the purpose of the prospectus or the response memorandum, albeit that a fairness opinion is sometimes obtained on a voluntary basis to support the valuation of the target company. As an exception, in the event of a voluntary public takeover bid by a controlling shareholder of the target company (as the case may be), the bidder must obtain a fairness opinion from an independent financial expert, and the fairness opinion must be included in the prospectus. Likewise, a fairness opinion must be obtained in the context of a stand-alone squeeze-out bid by a shareholder holding 95% of the outstanding voting securities if such bid does not take place within the framework of a voluntary or a mandatory public takeover bid.