Swedish Public-to-Private (P2P) financings: A general overview and considerations

With our experience from a number of recent P2P financings, we have in the following set out a general overview of the legal and financing considerations typically relevant in Swedish P2Ps:

1. Announcement and offer document

The offer is made through a press release which shall set out all material terms of the offer. A formal offer document must then be reviewed and approved by the Swedish Financial Supervisory Authority (Sw. Finansinspektionen) before the acceptance period can start.

2. Certainty of funds

Swedish takeover rules require bidders to have “certainty of funds” before launching. In a debt-financed deal, this usually means signed commitment papers or long-form documentation on a certain-funds basis. The offer announcement and offer document shall set out how the offer will be funded, however—unlike in some other jurisdictions—no “cash confirmation” is required and none of the financing documents need to be filed and/or disclosed with any supervisory authority.

3. Offer conditions – 90% acceptance threshold

The offer is typically conditional upon a number of conditions, and in particular on receiving acceptances such that the bidder will become owner of more than 90% of the target’s total number of shares, which enables the bidder to carry out a compulsory squeeze-out of minority shareholders and proceed with a delisting.

That said, bidders often seek to retain flexibility and have the right to waive the 90% acceptance condition and declare the offer unconditional at a lower ownership level. While this provides strategic flexibility, lenders are typically reluctant to accept this.

The reason is that 90% ownership is pivotal: it is the statutory threshold for initiating a squeeze-out of the minority shareholders of a Swedish company, and ultimately reaching 100% ownership of the target, which under Swedish law is required for:

• Target group credit support – upstream guarantees and security from the target group can only be granted once 100% ownership has been obtained.
• Efficient debt service – full ownership allows greater flexibility for upstreaming funds within the group without leakage to minority shareholders.
• Certainty of control – preventing the long-term complications of having a minority float remain in a listed entity.

For the above reasons, while sponsors may value the option to waive the 90% condition, lenders usually push for the threshold to be a firm requirement in order to secure the integrity of the financing structure.

4. Compulsory squeeze-out

Crossing the 90% ownership threshold enables the bidder to initiate a compulsory squeeze-out of remaining minority shareholders under the Swedish Companies Act through arbitration proceedings. This involves:

• Advance access within 4–6 months, if collateral of ~130–140% of the offer price for the remaining shares is provided (typically by way of a standard form bank guarantee or cash collateral). This grants legal ownership and voting rights over the minority shares so that, upon advance access having been obtained, the bidder will own and control 100% of the target.
• Final redemption, determined in arbitration proceedings lasting 1–2 years, with compensation usually being the offer price plus interest.

5. Delisting

Once the bidder has declared the offer unconditional above 90% ownership, the target’s board usually applies for delisting upon instruction of the bidder (as opposed to having to wait for an AGM and replacement of the board). This process normally takes 2–4 weeks from application.

6. Target group credit support

In leveraged buyout (LBO) structures, security is initially limited to security over the bidco and the target shares it acquires. Only once 100% ownership is achieved (including advance access) may the target group provide guarantees and security, subject to Sweden’s financial assistance and corporate benefit restrictions.

Conclusion

Swedish P2Ps follow a well-established two-phase model: the initial public tender offer, followed by a compulsory squeeze-out process once the bidder crosses the 90% threshold. Achieving 90% acceptance through the offer remains the preferred route, as it with certainty unlocks squeeze-out, delisting, efficient debt service and target group credit support.

While bidders sometimes seek the right to waive this condition, lenders typically resist, since 100% ownership is central to the financing structure and the long-term stability of the deal. Declaring the offer unconditional below the 90% threshold significantly increases the complexity of the deal with no clear route to get to 100% ownership with certainty.

With extensive experience advising lenders on Swedish P2P financings, RE:FI STHLM is uniquely positioned to guide clients through these complexities. As recent deals like Fortnox show, early legal engagement is key to a successful transaction.