Mandatory Tender Offer Rules Modified

By means of General Resolution No. 689/2017 of the Argentine Securities Commission (Comisión Nacional de Valores) ("CNV"), published in the Official Gazette on April 28, 2017, amendments to the regulations of the tender offer regime (Oferta Pública de Adquisición) (“OPA”) were introduced in the event of a change of control as provided by the Securities Law No. 26,831 (the "LMC").

Article 87 of the LMC requires a mandatory OPA to be made in the event of an acquisition of a "significant participation" in the capital stock and/or votes of a company whose shares are admitted to the public offer regime, provided that such acquisition would imply a change of control of the affected company. The OPA must be addressed to all holders of securities of the affected company and will be for 100% or 50% depending on the percentage of the capital stock and votes that are to be acquired that would trigger the mandatory OPA.

General Resolution No. 689/2017 introduces, among others, the following amendments in Section II of Chapter II of Title III of the CNV rules (according to N.T. R.G. 622/2013, as amended and supplemented): (i) it amends the percentages of capital stock with voting rights and/or votes of the affected company which constitutes a "significant participation", raising to 35% (previously 15%) the percentage that triggers a mandatory partial OPA and reducing to 50% (previously 51%) the percentage that triggers a mandatory OPA; (ii) ratifies that there is no requirement to launch a mandatory OPA if the acquisition of the shareholding does not imply a change of control of the affected company; and (iii) eliminates the obligation to launch an OPA for a minimum of 10% of the capital stock of the affected company when intermediate shareholding changes occur that do not reach 35% and 50% percentages.

In conclusion, a mandatory OPA will be required in two cases:

• When a person acquires an equity stake equal to or greater than 35% of the voting capital stock and/ or votes of the listed company, provided that such acquisition implies a change of control in the affected company. In such case, the OPA must be made for an amount that is at least equal to the amount of securities that would result in the relevant person holding at least 50% of the voting capital of the relevant target company.
• When a person acquires an equity stake equal to or greater than 50% of the capital of a listed company. In such case, the OPA must be made for up to 100% of the capital stock of the relevant target company.

General Resolution No. 689/2017 is in force as from April 29, 2017.