M&A: Limitation of liability
In M&A transactions, whenever the issue of limitation of liability is raised, I know I would be in for a lengthy negotiation. A seller would typically want to limit the seller’s liability under the sale and purchase agreement. However, the parties may decide not to include limitation of liability clause …
M&A: How to verify share title
In an M&A transaction relating to a private company, how does a buyer (or the buyer’s advisers) verify that the seller has the legal and beneficial title to the shares which the seller is selling (“Sale Shares”) and get assurance that the Sale Shares are free from encumbrances? Some of …
Liability in M&A transactions
Joint and several liability; or several and not joint liability? Where there is more than one seller in an M&A transaction, the sale and purchase agreement should set out whether the obligations of the sellers under the SPA are (1) joint and several; or (2) several and not joint. From …
M&A: Factors to consider in representations and warranties
Not all M&A transactions are the same. Therefore, the representations and warranties (“R&W”) to be given by sellers in M&A transactions should not be the same for all SPAs. Some of the factors to consider in drafting or negotiating R&W given by sellers in M&A transactions should include the following: …
Structuring M&A transaction
Points to consider when structuring an M&A transaction (sale and purchase of shares) 1. Whether the shares, which are the subject matter of the sale and purchase (“Sale Shares”), a majority or minority stake? 2. Are the Sale Shares ordinary shares or preference shares or a combination of both? 3. …
M&A: What to do if there’s problem?
What choices does a buyer have if the buyer’s due diligence reveals issues with the company or assets which the buyer intends to acquire? If the buyer intends to proceed with the acquisition and requires the issues to be addressed, the parties may consider the following: 1. Seller to indemnify …
M&A: Fair disclosure?
Today’s post is about disclosures to the representations and warranties given by a seller in an agreement for sale and purchase of shares or assets (“Seller’s Warranties”). It is common practice to provide in the sale and purchase agreement that the Seller’s Warranties are qualified by disclosures made by the …
M&A transactions involving public listed companies
For those who like adrenaline packed corporate exercises, M&A transactions would be exciting for them. M&A transactions involving public listed companies would probably be even more exciting. If the seller or buyer is a company listed on Bursa Malaysia or a subsidiary of a company listed on Bursa Malaysia, the …
Shareholders’ agreement for minority shareholders
Today’s post is about provisions in shareholders’ agreement for the benefit of minority shareholders. It is common to have a shareholders’ agreement when an M&A transaction results in more than one shareholder in the target company. Some provisions to include in a shareholders’ agreement for the benefit of a minority …
Representations and warranties in M&A transactions
Today’s post is about representations and warranties given by sellers in M&A transactions (“Seller’s Warranties”). Not all Seller’s Warranties are of equal importance. Breach of different Seller’s Warranties, may affect the sale and purchase transaction in varying degree, depending on which Seller’s Warranty is breached. It may be worthwhile to …