Contributed By Ferrere Abogados
Publicly listed companies are scarce in Uruguay; basically, all M&A transactions involve privately held companies, where the terms of the transaction are negotiated between the parties. Therefore, it is not customary for a bidder to build a stake in the target prior to launching an offer.
Any person who directly or indirectly owns more than 10% of the capital of a publicly listed company, with a right to vote, must disclose such fact to the Central Bank of Uruguay and the stock exchange where the company is listed, within ten working days of obtaining such right. The same disclosure obligation applies to directors and administrators of issuers of publicly traded securities with respect to any participation they maintain in the issuer. Such disclosure must be made within ten working days of their appointment.
Also, companies that issue publicly listed securities must disclose the interests in the company held by directors or administrators, or by any person representing more than 10% of the capital with right to vote and any change of control in ownership. Such disclosure must be made to the Central Bank of Uruguay and to the stock exchange where the securities are traded.
Any change to the aforementioned information must be communicated to the Central Bank of Uruguay and the stock exchange within ten working days of its occurrence.
It is not possible for a company to introduce different rules (eg, higher or lower reporting thresholds to the Central Bank of Uruguay or to the stock exchange) in the articles of incorporation or bylaws.
However, a company could introduce different rules (eg, lower reporting thresholds) in the articles of incorporation or bylaws in order to report the stakebuilding to the company or to the other shareholders.
However, it should be noted that, due to the lack of development of the stock market, stakebuilding is not common in Uruguay.
Dealings in derivatives are allowed in Uruguay. They can be developed either in the stock exchange (publicly traded) or privately.
Under Uruguayan regulations, derivatives are considered securities and, as such, the general rules for disclosure in publicly traded securities apply. In general, securities can only be publicly traded when such securities and their issuer are registered in the Central Bank of Uruguay. Also, issuers of publicly traded securities have periodic reporting requirements with the Central Bank of Uruguay. There are no specific rules regarding filing or reporting obligations with respect to derivatives under securities disclosure or competition laws.
It is not necessary for shareholders to make known the purpose of their acquisition and their intention regarding control of the company. The only obligation a shareholder has in this regard is to disclose its ownership of more than 10% of the capital with right to vote in the case of publicly listed companies to the Central Bank of Uruguay and the stock exchange where the company is listed, within ten working days of obtaining such right.