Guidelines for Determining Equitable Prices in Tender Offers

On July 3, 2024, the Argentine Securities Commission (CNV) issued General Resolution 1007, submitting to public consultation a new regulation applicable to the determination of the equitable price in tender offers.

According to the CNV, the equitable price is intended to ensure that minority shareholders receive a fair compensation that reflects the real value of their shares in the context of a tender offer of a controlling interest or withdrawal from the public offer regime. Therefore, equal treatment in the context of a tender offer does not necessarily imply the same nominal price, but rather that the minority shareholders receive an equitable price that reflects the equivalent value at the time of its effective payment, as well as that which refers to the expectations of growth and improvement in the value of the shares due to future changes in the company. Therefore, the CNV stated that the equitable price must be expressed, settled, and paid in the same currency agreed upon or used in the takeover unless there is a duly accredited impossibility.

In this sense, the Resolution establishes that if it is impossible to make the payment or settlement of the equitable price in the same currency agreed upon in the takeover, only in this case—duly evidenced—the payment and settlement will be admitted in its equivalent in ARS, using the BYMA Dollar Index published by Bolsas y Mercados Argentinos Sociedad Anónima on its website, or using the selling exchange rate of the agreed currency of Banco de la Nación Argentina, the highest at the close of business on the business day immediately before the settlement date.

If the price paid for the takeover was in ARS, the equitable price must be made in ARS, and for purposes of settlement and payment, such price must be increased using the coefficient resulting from dividing the Badlar Rate established by the Argentine Central Bank, at the time of payment or settlement, by the Badlar Rate in effect as of the date of the takeover.

To calculate the value of comparable companies or businesses, as provided for in article 88 of the Capital Markets Law, when there are prices in a currency other than ARS, they must be converted into ARS using the BYMA Dollar Index or the selling exchange rate, bills rate, of Banco de la Nación Argentina, or choosing the highest value. These update and conversion guidelines also apply to any tender offer and/or unilateral declaration of acquisition in takeover bids or residual shareholdings regime, as established in the Capital Markets Law.