Last Updated April 16, 2019

Law and Practice

Contributed By Ferrere Abogados

Authors



Ferrere Abogados is the only multi-jurisdictional, purely South American law firm, and has 250 attorneys across Bolivia, Ecuador, Paraguay and Uruguay, offering international-class service and participating in the majority of important deals. The M&A practice group works in collaboration with the firm’s other areas to form a multidisciplinary team offering full-service legal advice. It represents a stellar list of international and local clients from a wide range of sectors, such as retail, energy, infrastructure, insurance, construction, media and information technology, agribusiness, food, pharmaceutical, banking and real estate. Activity includes acting as buyer’s or seller’s counsel in acquisitions, leading applications for concessions, advising on greenfield projects, and developing ex ante a BIT protection strategy for a major investment.

Hostile tender offers are not forbidden in Uruguay, but are not common.

In Uruguay there are very few publicly listed companies, tender offers in general are not common, and there have been no tender offers where the directors have used defensive measures.

Taking the above into consideration, the Uruguayan Central Bank regulation on tender offers sets forth that, from the public announcement of the tender offer and until the publication of the results, the Board of Directors of the target must obtain prior authorisation from the shareholders' meeting before initiating any action that may prevent the success of the offer, except searching for other competing offers. In particular, the Board of Directors of the target cannot:

  • agree or initiate any issuance of securities that may prevent the success of the offer;
  • directly or indirectly promote operations over shares or other securities which are the subject of the tender offer, including acts directed towards promoting the acquisition of the same;
  • sell, pledge, mortgage or lease real estate or other assets when such operations could prevent the success of the offer; or
  • distribute extraordinary dividends or remunerate the shareholders in any way that does not follow the normal policy for the distribution of dividends.

In Uruguay there are very few publicly listed companies, tender offers in general are not common and, as far as is known, there have been no tender offers where the directors have used defensive measures.

When enacting defensive measures, directors owe basically the same duties they have in general: the duty of loyalty and the duty of acting with the diligence of a good businessman. These duties are with respect to the company.

In the context of a tender offer, directors cannot 'just say no'. The board of directors of the target must obtain prior authorisation from the shareholders' meeting before initiating any action that may prevent the success of the offer, except searching for other competing offers.

Ferrere Abogados

Juncal 1392

+598 2900 1000

ferrere@ferrere.com www.ferrere.com
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Authors



Ferrere Abogados is the only multi-jurisdictional, purely South American law firm, and has 250 attorneys across Bolivia, Ecuador, Paraguay and Uruguay, offering international-class service and participating in the majority of important deals. The M&A practice group works in collaboration with the firm’s other areas to form a multidisciplinary team offering full-service legal advice. It represents a stellar list of international and local clients from a wide range of sectors, such as retail, energy, infrastructure, insurance, construction, media and information technology, agribusiness, food, pharmaceutical, banking and real estate. Activity includes acting as buyer’s or seller’s counsel in acquisitions, leading applications for concessions, advising on greenfield projects, and developing ex ante a BIT protection strategy for a major investment.

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