Like merger agreements, share purchase agreements or SPAs are the main transaction documents that govern a transaction. However, PPS replace merger agreements in share purchase transactions, where ownership of shares changes hands. There is no merger. Among other things, SPAs typically: Sometimes a seller`s lawyers may be asked to provide written legal advice for the buyer to be delivered at closing. These opinions are intended to provide the buyer with additional assurance that certain legal issues are as described by the seller in its representations and warranties. In addition, it is common for exclusivity agreements and exclusivity clauses contained in pre-contracts to stipulate that if the seller or target company receives unsolicited offers or proposals for the acquisition (or similar transaction) of the target company from a third party, the seller and the target company are obliged to inform that third party that they are engaged in exclusive discussions with the potential buyer. is located. and that it is impossible to proceed with such a third party. If the purpose of a transaction is listed on a stock exchange, particularly in a common law jurisdiction, additional provisions may need to be inserted as exceptions to the obligation relating to the transaction concerned, in particular because of the obligation for directors to discharge their fiduciary duties, including seeking to maximise shareholder value where a company is involved.
and other legal requirements relating to takeover bids. (a) Negotiation of Final Documents – Buyers, target companies and their respective legal advisors will negotiate the terms of the final document. Sometimes the transaction structures and terms agreed to in the letter of intent can be renegotiated. This process usually takes a few weeks, sometimes longer. Letters of intent or letters of intent are short, largely non-binding documents signed by parties to potential M&A transactions that set out the general framework of the transaction, including the objective, purchase price (or purchase price range), transaction structure, contingencies (e.g., if there is a possibility of financing by the buyer), the commitments and the conditions of remuneration. An LDD is a crucial step in any M&A transaction and is essentially a legal review of documents and information about the target company or assets. LDD`s findings, risks and recommendations end up in an LDD report. As a result, an LDD usually takes a long time. This is where the legal bill gets quite heavy. The documents you need to buy or sell a business depend on the structure (discussed here) and complexity of the business, as well as its specific conditions. In almost all cases, however, there will be a master agreement governing the transaction. It will be a merger agreement for a merger, a share purchase agreement for a share purchase and, you guessed it, an asset purchase agreement for an asset purchase.
These documents may sometimes have slightly different names. For example, an amalgamation agreement may be called an agreement and plan of amalgamation, or a share purchase agreement may be called a securities purchase agreement or a purchase and sale agreement.