[Last updated: 1 June 2022, unless otherwise noted]

The most common takeover tactics include the following:

6.1 Calculation of substantial interest in the Target Company

Although, under a hostile takeover bid, it will be difficult for the offeror to obtain information concerning the holdings of each shareholder of the Target Company and their identities from the Target Company or the Peruvian depository entity (CAVALI ICLV S.A.), it is crucial for the offeror to carry out an investigation using publicly available information from the SMV and the Lima Stock Exchange, to determine the number of shares with voting rights outstanding as well as the number of other securities outstanding, i.e., (i) convertible bonds or any other securities that entitle their owners to acquire or subscribe common shares, to the extent that such securities grant their owners to exercise such rights within 18 months following their acquisition, and (ii) ADRs, GDRs or similar securities.

6.2 Obligation to acquire additional shares in a subsequent Mandatory Tender Offer

As mentioned in 4.2 above, except for Voluntary Tender Offers and cases where the Mandatory Tender Offer is launched prior to acquiring a substantial interest in the Target Company, if an offeror acquires a substantial interest without having launched a tender offer, such acquisition will trigger the obligation to launch a tender offer for the number of additional common shares as a result of the formula described in 4.2 above. Therefore, the offeror must be aware of this obligation and make sure it has secured the funds or securities needed to pay the required consideration before acquiring a substantial interest in the Target Company.

6.3 Deciding whether to launch a prior Mandatory Tender Offer or a subsequent Mandatory Tender Offer

Before deciding to launch a tender offer, an offeror should consider and evaluate the advantages and disadvantages of launching a prior Mandatory Tender Offer or a subsequent Mandatory Tender Offer after having acquired a substantial interest in the Target Company. The following table summarizes the main advantages and disadvantages of implementing each strategy:

6.4 Stake building

Potential bidder must take the following into consideration:

• If the potential bidder intends to acquire a substantial interest in the Target Company before launching a Mandatory Tender Offer, such acquisition must be made in no more than a series of four consecutive transactions in a period of 3 years. Otherwise, the SMV may consider that such acquisition has been made in violation of Peruvian tender offer rules, since the bidder should have launched a prior Mandatory Tender Offer.
• The offeror is not allowed to acquire or commit to acquire common shares in the open market (either through the Lima Stock Exchange or over the counter) during the tender offer period. This limitation does not extend to the offeror's affiliates.

6.5 Irrevocability of the bid

Once the tender offer has been launched, the offeror will not be able to revoke the offer.

6.6 Insider trading and market manipulation

Pursuant to the Securities Market Law and the Market Abuse Regulations, any person who has access to inside information in connection with (i) a potential takeover bid or (ii) any undisclosed information of the Target Company or its securities or businesses shall keep such information confidential and cannot (a) reveal that information to third parties, (b) recommend operations to others based on such information, (c) use that information to directly or indirectly benefit himself/herself or third parties, and (d) implement any price manipulation practices in order to create artificial, false or misleading appearances with respect to the price of the Target Company's common shares.

6.7 Anti-takeover defense mechanisms

According to the Corporations Law, the fundamental obligations of the members of the board are (i) to act in good faith, in the best interest of the company, and for the benefit of all its shareholders, (ii) not to adopt any decision that benefits themselves or any related party, and (iii) to avoid conflicts or potential conflicts of interest between themselves as members of the board and those of the company as a whole.

In addition, pursuant to the Tender Offer Regulations, once directors and the management have knowledge of a potential takeover offer (or that the company is under the threat of a takeover) and until the announcement of the results of the takeover, they must be impartial towards potential competitive offers, giving priority at all times to the interests of the shareholders and refrain from performing, conducting or concerting any act that is not in the ordinary course of the company's business. They must not disrupt or frustrate the normal course of a offer or favor a offeror. Therefore, directors and the company's management cannot agree to issue new shares or other securities, execute option agreements or sell any of the company's assets, among other things.

There is no express prohibition, however, regarding the execution of agreements prior to having knowledge of a takeover offer with the purpose of preventing or deterring unwanted takeovers, which are subject to a condition precedent consisting of having been notified with a takeover offer. Nonetheless, depending on which anti-takeover mechanism is agreed or implemented, such act may be challenged for violating fundamental principles, i.e., if they damage the company as a whole, or such measure is considered in benefit of a particular shareholder or group of shareholders such as those who have control over the Target Company, except where such decisions have been agreed, consented to or accepted by all of the company's shareholders with voting rights. This requirement may imply, in practice, that no defensive strategies may be adopted, given the fact that if the potential offeror (or any of its affiliates or subsidiaries) previously acquired one common share of the future Target Company and votes against the decision in the actual shareholders' meeting, it will not be possible to adopt the decision with 100% votes of the voting shares.

Anti-takeover mechanisms are unusual in Peru and there is no case law that addresses the legality or validity of them. However, in the following chart we address the viability of some anti-takeover mechanisms commonly used in other jurisdictions and their consequences if implemented in a Peruvian listed company: