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

3.1 Shareholding rights and powers

Danish law allows multiple classes of shares with different voting rights. One class of shares may be without any influence, meaning that it is possible to issue shares without any voting rights or, alternatively, a certain class of shares may be entitled to 10 or 100 times the voting rights of another class. Consequently, the number of shares does not always correspond to the voting power. It is not possible to issues shares without the right to attend and speak at the annual general meeting.

The table below provides an overview of the different rights and powers that are attached to different levels of shareholding within a Danish listed entity:

3.2 Restrictions and careful planning

Danish 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 offeror. The main restrictions and hurdles have been summarized below. Some careful planning is therefore necessary if a potential offeror or target company intends to initiate a process that is to lead towards a public takeover bid.

3.3 Insider dealing and market abuse

Before, during and after a takeover bid, the normal rules regarding insider dealing and market abuse according to the MAR and the Capital Markets Act are applicable. For further information on the rules on insider dealing and market abuse, see 6.3 below. The rules include, amongst other things, that manipulation of the target's stock price, e.g., by creating misleading rumors is prohibited. In addition, the rules prohibiting insider trading prevent an offeror that has inside information regarding a target company (other than in relation to the actual takeover bid) from launching a takeover bid.

3.4 Disclosure of shareholdings

The rules relating to the disclosure of significant shareholdings in listed companies (the so-called 'transparency rules') are contained in the Capital Markets Act and the Danish Companies Act. These rules are based on Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004, on the harmonization of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC, with Directive 2013/50/EU amending the Transparency Directive.

The rules regarding the disclosure of shareholdings and transparency apply before, during and after a public takeover bid.

Pursuant to these rules, if a potential offeror starts building up a stake in the target company, it will be obliged to announce its stake if the voting rights attached thereto have passed an applicable disclosure threshold. As stated above, the relevant disclosure thresholds are 5%, multiples of 5% up to 25%, 33⅓% and 50%, 66⅔% and 90% thereafter.

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 3.9 below). These 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 or voting agreements.

3.5 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 immediately announce all inside information, subject to exceptions contained in Article 17 of the MAR as referred to in the Capital Markets Act. For further information on inside information, see 6.1 below. The facts surrounding the preparation of a public takeover bid would in most cases constitute inside information. If so, the target company may be obliged to announce this. However, the board of the target company can delay the announcement for a limited period of time if it believes that a disclosure would not be in the legitimate interest of the company. For instance, this could be the case if the target's board believes that an early disclosure would prejudice the negotiation of a bid. A delay of the announcement, however, is only permitted provided that the non-disclosure does not entail the risk of the public being misled, and that the company can keep the relevant information confidential.

3.6 Announcements of a public takeover bid

An offeror that intends to make a public takeover bid must first undertake to comply with the Capital Markets Act and the Takeover Order by a notification to the regulated market on which the target company's shares are admitted to trading. After the notification, the offeror may announce the bid. As a takeover bid announcement will normally influence the price of the target's shares, it must, as far as possible, contain all the facts that are relevant to making a proper assessment of the share price.

Within four weeks from the announcement, the bidder must file an offer document with the DFSA. The DFSA usually approves the offer document within 10 business days. As soon as the approved offer document is published, the acceptance period can start.

If there are rumors or leaks that a potential offeror intends to launch a public takeover bid, the DFSA could force an announcement. This could lead to an early disclosure and possibly an acceleration of the preparations by an offeror, as the bidder could be forced to make an announcement as to the offeror's intentions.

3.7 Early disclosure

If an offeror has been compelled by the DFSA to make an early disclosure, the DFSA may decide that a bid must be announced within a certain period of time or that the offeror must otherwise refrain from making a bid.

3.8 Due diligence

The Danish public takeover bid rules do not contain specific rules as to whether a prior due diligence can be organized, nor how such due diligence should be organized. Nevertheless, the concept of a prior due diligence or pre-acquisition review by an offeror is generally accepted and 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 mechanisms include the use of strict confidentiality procedures and data rooms.

There is no obligation for the target board to allow a due diligence process and it is up to the board of directors to decide whether or not a due diligence is appropriate in the individual case. It is unlikely that a reasonable refusal from the board of directors to allow a due diligence could lead to the target board being held liable for damages on any ground. The target board must determine to what extent a request for due diligence should be met, taking into consideration the commercial interest of the target and its shareholders, and keeping in mind the principle that all shareholders must receive equal treatment. Thus, the target board must assess whether or not the offeror is serious and if the terms of the takeover bid are sufficiently favorable to justify a due diligence.

3.9 Acting in concert

For the purposes of the Danish takeover bid rules, persons are "acting in concert":

• if they collaborate with the offeror, 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;
• if they 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.

In view of the above rules 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 the case, for example, when 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. This is especially relevant in relation to mandatory takeover bids. 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 33⅓% threshold, 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 33⅓% threshold.