Spain has introduced a new company takeover code. Of particular relevance to private equity, the new legislation includes a squeeze-out clause, whereby a buyer can force reluctant sellers to divest once its controls 90% of the equity, and break fees are now also allowed, which will mean bidders will be compensated by the target companies if they break exclusivity pacts.
Under the new rules, investors are now forced to make an offer to all shareholders once its own equity carrying 30% of the votes or more than 50% of the board. Also, the opening bidder on a deal will be able to make a revised offer to shareholders if it comes in less than 2% below that of a competitor in a sealed bid. Buyers will now be able to acquire up to a 30% stake in a company in the open market after announcing its offer, and potential rival bidders on a deal are now prohibited from announcing its intention to make a bid once the period to make new offers has expired.