What to consider when negotiating sale and purchase of business
Today’s post is on matters to consider when negotiating M&A deals, in particular during times of uncertainty. Parties may want to consider the following: 1. Whether to include price adjustment based on agreed parameters. Price adjustment is relevant if the value of the target company at the execution of the …
How to verify allotment and issuance of shares
Investors who want to invest in a company in Malaysia would want to know that the issuance and allotment of the shares in a company since incorporation have been duly authorised and lodged with the Registrar. What do you need to check to verify that? The documents you need to …
Consider these when drafting representations and warranties for M&A transactions
As a junior lawyer, the schedule on representations and warranties given by sellers (“R&W”) was the part I disliked the most when drafting sale and purchase agreements for M&A transactions. I think it is safe to say that M&A lawyers don’t draft R&W from scratch. Usually there are precedents to …
Exclusivity in M&A negotiation
Today’s post is on exclusivity when negotiating an M&A deal. If you are a buyer entering into a negotiation to acquire business or shares of a company, you would want to ensure that you do not incur costs during the negotiation only for the seller to end the negotiation and …
Searches to verify existence of companies
When a buyer acquires a company, a basic but important aspect of due diligence is to ensure the company is properly incorporated under the relevant laws and validly existing. Other than the usual company search with the Companies Commission of Malaysia (“CCM”) and winding up search with the Malaysian Department …
Disclosure letter in M&S transaction
Today’s post is on disclosure letter in M&A transaction. A disclosure letter sets out the exceptions to seller’s representations and warranties in a sale and purchase agreement for an M&A transaction (“SPA”). Instead of negotiating heavily on sellers’ representations and warranties in SPAs, it is common to provide in SPAs …
What approvals and notifications required for M&A transactions?
At the start of a M&A transaction, ascertaining the approvals and notifications required for the transaction would help you plan the workflow and timeline. The approvals and notifications required typically relate to change of control, shareholders, shareholding or directors of the target company. The approvals and notifications required for the …
Three stages in drafting M&A SPA
I learn drafting sale and purchase agreement (SPA) for M&A in the “traditional” manner. This is probably how instructions are given to associates when they are asked to draft SPA. *** We are acting for ABC who wants to buy/sell shares in XYZ Company. [Some briefing on the transaction.] Please …
“Fundamental” representations and warranties in M&A
Today’s post is on creating a category of ‘fundamental representations and warranties’ given by sellers in sale and purchase agreements (SPAs) for M&A transactions. It is common for sellers to give representations and warranties for the benefit of buyers in M&A transactions. Instead of negotiating heavily on the representations and …
Be clear with timeline in M&A SPA
Today’s post is on interpretation of time in a sale and purchase agreement for M&A transaction. Consider the following clause: “The Seller shall fulfil the Conditions Precedent no later than 90 days from the date of this Agreement.” Questions for you to consider: 1. Do the 90 days stated in …