Dispute regarding a cancelled takeover

Our client had been negotiating to take over the shares of a company for a sum of approximately 10 million euro. Following a value assessment, our client made an opening bid based on the Discounted Cash Flow (DCF) method and proposed an acquisition date of 1 January.

The seller was in no hurry and responded only in April with a counter proposal. Our client finally accepted this proposal. This was in June. The parties decided to postpone the acquisition date to 1 January of the following year.

A difference of opinion then arose between (the advisers of) the parties. This had to do with the scale of the write-downs, withdrawals, repayments, and investments in the target company.

The seller suddenly broke off the negotiations and came to an outline agreement with another party.

Our assignment

Our firm was engaged at this stage. Our brief was to ensure that the takeover would be agreed with our client and not with the other buyer.

Our approach

We chose the ‘carry a big stick but speak softly’ option. A meeting was held with all of the relevant parties in an effort to turn the tide in favour of our client. We also prepared to bring preliminary relief proceedings to compel the seller to resume negotiations with our client. The shares of the target company were attached in an effort to bring pressure to bear and to ensure that the shares were not sold to the other party behind the back of our client.

The result

These actions had the desired effect. An arrangement was reached whereupon the shares of the target company came into our client’s possession. In the end, we did not need to litigate – the mere threat sufficed – and the entire process took no more than a few weeks.

Would you like to know more about resolving conflicts between shareholders? Contact Pierre van Voorst.