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

6.1 Material information

A Chilean listed company is required to immediately disclose to the public all material information that relates to it and the securities it offers, including all material changes in information that has already been disclosed to the public. Under the Securities Act, "material information" is all the information that a wise man (hombre juicioso) would consider important for their investment decisions.

It is up to the company to determine if certain information qualifies as "material information". This may be a difficult exercise, and a large gray area will exist as to whether certain events will need to be disclosed or not.

The intention of the controlling shareholder to sell its stake in a listed company and/or the existence of negotiations oriented to the acquisition of a listed company qualifies as material information for the target company and therefore has to be disclosed as a Material Fact (Hecho Esencial). Thus, in the event that the target company becomes aware of that information either through its board of directors or through its CEO as legal representative of the target company, the target company would be required to report the material information to the Commission and the stock exchanges. The target company may provide the material information to the Commission on a confidential basis as a Reserved Fact (Hecho Reservado) if at least three-quarters of the board of directors of the target company vote to approve this. This may be because negotiations are ongoing and because public disclosure may adversely affect the best interests of the target company.

As stated before, to the extent they are not listed companies themselves, neither the controlling shareholder nor the potential bidder are obligated to disclose their intentions or negotiations until the Tender Offer Commencement Publications are made.

6.2 Insider dealing and market abuse

The basic legal framework regarding insider dealing and market abuse under Chilean law is set forth in the Securities Act.

In principle, the rules on insider dealing and market abuse remain applicable before, during and after a public takeover bid, albeit that during a takeover bid additional disclosures and restrictions apply in relation to trading in listed securities.

6.3 Common anti-takeover defense mechanisms

After the tender offer publications are made, certain restrictions apply to the administration of the target company. The company is precluded from selling relevant assets, redeeming shares, incorporating subsidiaries, and increasing its indebtedness by more than 10%.

Other common takeover defense mechanisms, such as increasing the capital without providing preferential subscription rights to the existing shareholders or issuing warrants prior to the takeover bid in favor of "friendly person(s)" (without providing preferential subscription rights to the shareholders), are not allowed, given that there must be pre-emptive right for subscription of newly issued shares in favor of all shareholders.

The table below contains a summarized overview of the mechanisms that we understand are commonly used by target companies in other jurisdictions as a defense against a takeover bid, explaining whether they could be adopted in Chile or not. These take into account the restrictions that apply to the board and shareholders' meeting of the target company pending a takeover bid.