Our Company provided advisory services in connection with a EUR 36 million acquisition of shares in a public limited company. In the context of a takeover of shares of a public limited company 4 are the main stages which take place:
1. Before a takeover of a business (which can take many formats) can take place, the buyer will need to carry out a detailed and thorough legal, technical and financial due diligence where the business secrets of the sold business will be revealed. In this case, before the takeover takes place and before this audit has even taken place, it is necessary for the parties to sign a confidentiality agreement (for more information see here).
2. The MOU is the document where the parties, before starting the financial and legal due diligence of the target company and before drawing up the final contract, record on the one hand the points where there is already a consensus and on the other hand those on which the parties declare that they are continuing negotiations. It is described as a 'chameleon' document which can sometimes be a simple 'gentleman's agreement' without any legal binding force, but at other times it may well bind the parties with serious consequences and sanctions in the event of non-compliance with what is agreed therein (for more see here).
3. Due diligence ('DD') of the target company is one of the most important stages of the procedure. It is where the potential acquirer gets a better understanding of what it intends to buy, learns about potential problems, defects, weaknesses, etc. The DD usually follows the signing of the MOU (memorandum of understanding) and lasts, in most cases, from 1-6 months, depending of course on the volume of data and the capacity of the team that will take over (for more see here).
4. The final stage is that of drafting and signing the sale and purchase agreement (SPA), followed by the share transfer agreement (closing).
Read all the court rulings