We were instructed by a company on the purchase of shares in a connected company, from its holding company. The business of the target company was the design and sale of complex medical equipment which is partly developed by our client and partly developed by the holding company.
The holding company indicated that it was prepared to sell its shares to our client on favourable terms in order to facilitate the public offering of the holding company in Sweden, provided that appropriate commercial agreements, including assignment and licensing of intellectual property rights, were put in place between the target company and the holding company, and that the holding company had the first option to buy the shares of the target company in certain circumstances.
The holding company instructed English solicitors to prepare a suite of documents to give effect to its and our client’s intentions, and we were instructed to support our client through the process. As a first step, we recommended that there be in place some comprehensive Heads of Agreement to encourage proper exploration and discussion followed by agreement on all of the issues which had been thought of already, and also other points which would become apparent from the process. Together with the cooperation of the Swedish lawyers for the holding company, we put in place comprehensive non-binding Heads of Agreement.
Quite separately, the holding company had expressed dissatisfaction with the work done on its behalf by its English solicitors and invited us, of course only acting on behalf of our client, to prepare the comprehensive suite of documents giving effect to the Heads of Agreement. We did so, and over a period of time involving video conference calls as well as correspondence, the form of these quite complex documents was eventually agreed.
Unfortunately for our client, the holding company decided at the eleventh hour that it did not wish to go ahead with the purchase following advice from its corporate finance advisers in Sweden concerning the proposed public offering.
All preparatory steps in advance of the transaction were carried out to our client’s satisfaction.
