June Edition 2023

58 additional shares in the company, so long as its holdings do not exceed the 90% threshold. In the event that the controlling shareholder wishes to reach 100% holdings (i.e., effect a going private transaction as a result of which such entity would become wholly owned by the purchaser and its shares would be delisted from the exchange), the shareholder would have to launch a full tender offer for all of the Target’s share capital. Such an offer would be addressed directly to the shareholders and published on the applicable exchange. Because this is an offer to the shareholders, the approval of the board of the Target would not be required. Under this alternative, a full tender offer will be deemed accepted if either (i) the shareholders who did not positively accept the tender offer hold less than 5% of the issued and outstanding share capital of the Target, and more than 50% of the shareholders that do not have a personal interest in the tender offer, have accepted the tender offer; or (ii) the shareholders who did not accept the tender offer hold less than 2% of the issued and outstanding share capital of the Target. If the tender offer is accepted as set forth above, then all the shares of the Target (even those held by shareholders who voted against the tender offer) will be transferred to the purchaser by operation of law. If the tender offer is not accepted, the purchaser may not acquire additional shares from shareholders who accepted the tender offer if, following such acquisition, the purchaser would hold over 90% of the Target’s issued and outstanding share capital. Appraisal rights: A shareholder that had its shares transferred to the purchaser as a result of a successful full tender offer, may, within three months following the tender offer acceptance date, petition the court to determine that the tender offer was not made in fair value and that the purchaser must pay the fair value, as shall be determined by the court. The offeror (i.e., the potential purchaser) may, under the terms of the tender offer, limit the right of appraisal only to shareholders who refused to accept the full tender offer, thereby hedging its potential exposure to only the 5% (or less) dissenting shareholders. This hedge would not be applicable if the consenting shareholders prove that the disclosure provided by the offeror in the tender offer was insufficient, which in such case, the appraisal rights may be granted also to shareholders who accepted the tender offer. According to case law, the appraisal will generally be done by using the DCF (Discounted Cash Flow) valuation model, which values the company based on the discounted cash flow of its current assets, as well as the