Increased threshold for mandatory takeover offer
The percentage of voting shares held in the target company that triggers mandatory takeover offer is increased from 25% to 30% of total number of issued shares, excluding treasury shares.
Exceptions from the obligation to launch takeover offer
Additional exceptions from the obligations to launch a takeover offer are introduced. There is no obligation to launch a takeover offer in the following cases:
- Acquisition of shares in the procedure of capital increase, if the shareholders’ assembly of the issuer has, at the meeting approving the capital increase, approved the acquisition of shares by the specific acquirer and released such acquirer from the obligation to launch a takeover offer. Previously, this exception was formulated so to apply to the acquisition of shares in capital increase in “private offering”;
- Acquisition of shares in the primary offering based on pre-emption right;
- If, after the acquisition of new shares, the percentage of the target’s voting shares held by the acquirer and the parties acting jointly with the acquirer remains unchanged;
- If another shareholder, together with the parties acting jointly with it, has acquired via takeover offer a higher percentage of shares of the target than the percentage held by the acquirer.
In addition, the following exceptions continue to apply:
- Acquisition of shares of the issuer as bankruptcy debtor in bankruptcy procedure;
- Acquisition of shares of the issuer in the proceedings for enforcement of share pledge, provided that the acquirer disposes of the acquired shares within one year from the acquisition date;
- Acquisition of shares in a merger;
- Acquisition of shares in the process of privatization, provided that the acquirer has not previously acquired any shares of the target on the stock exchange or in a bloc transaction.
Suspension of the obligation to launch takeover offer
The period of time within which a broker is not obliged to launch a takeover offer following the acquisition of shares of the issuer in a dealership operation, market making or underwriting process, is decreased from one year to six months following the date when the obligation to launch a takeover bid is created.
Joint and several liability
The Takeover Act prescribes joint and several liability of all persons involved in the preparation of a takeover offer for damages resulting from false, inaccurate or incomplete data contained in the offer.
Determination of the purchase price in the takeover offer
Pursuant to the Takeover Act, the purchase price in the takeover offer cannot be lower than the higher of the highest price at which the acquirer or a party acting jointly with the acquirer had acquired voting shares of the same target in the period of one year prior to the date when the obligation to launch a takeover offer is created or the average stock exchange price within the period of six months preceding that date or, as the case may be, the date of the issuance of new shares, if the obligation to launch the offer is triggered by a share issue. As a result of the amendments to the Takeover Act, the average stock exchange price is taken into account only if the target’s shares have been liquid within the relevant reference period. Shares are considered liquid if at least 3% of the total number of target’s issued voting shares of the same class has been traded within the reference six-month period and if, within the period of three months within such six-month reference period, on average at least 1% of the total number of the target’s issued shares of the same class has been traded on a monthly basis, in both cases excluding the trading in takeover process, bloc transactions and also excluding any price determined by the Securities Commission to be a result of market manipulation. If the above-mentioned liquidity criteria are not met, the acquirer is obliged to offer to the shareholders the higher of: (i) the highest price at which it or a party acting jointly with it had acquired voting shares of the target within the period of one year prior to the date when the obligation to launch the takeover offer is created or (ii) the book value of the target’s voting shares, according to the financial statements of the target for the year preceding the takeover.
Topping-up the price from the offer
The shareholders who have deposited their shares in response to the takeover offer are entitled to a top-up of the purchase price received if the acquirer, or a party acting jointly with the acquirer, acquires, within the period of one year following the takeover offer, additional shares of the target company at a price higher than the price paid in the takeover offer.
Squeeze-out and compulsory purchase
Articles 18 and 19 of the Takeover Act, which regulated the conditions for and the procedures of squeeze-out and compulsory purchase have been now deleted given that this matter will be regulated by the Companies’ Act, the amendments to which are currently in the process of being deliberated upon in the parliament.
Conditional offer
Conditional offer is permitted only if it is a voluntary offer and if the condition consists of the acquisition of at least 50% + 1 share of the target.
Opinion on takeover offer
The deadline for publishing the opinion of the management of the target company on the takeover offer is extended from seven to ten days following the date of the offer’s publication. The management of the target company is obliged to make available its opinion on the takeover offer to the employees of the target company, whereupon the employees are entitled to issue their own opinion on the takeover offer within 3 days following the receipt of the opinion of the management. Both opinions on the takeover offer have to be submitted to the Securities Commission.
Acting in concert
The amendments to the Takeover Act define “acting in concert”, i.e. “acting jointly” in the following manner:
“Parties are deemed to be acting in concert if they have agreed, either expressly or tacitly, in writing or orally, to act in concert in relation to the acquisition of shares of the issuer, the exercise of their voting rights, preventing the acquirer from acquiring shares of the target, or if one of the party is holding the shares for the account of the other party or they are related by relevant circumstances concerning the acquisition of the issuer’s shares.”
The relevant circumstances are: the time or the period within which the parties acquired the issuer’s shares; the place and the time of issuing order(s) for the acquisition of the issuer’s shares; the acquisition method (i.e. the type of legal transaction that was the basis for the acquisition of shares); the value of acquired shares; the possibility that the acquirer was familiar or could have been familiar with the decisions of other persons regarding the acquisition if such other persons were employees or members of managing or supervisory bodies in the companies acting in concert between themselves or members of managing or supervisory bodies of the companies acting in concert with such members; the fact that they were acting jointly when proposing to the shareholders’ assembly the appointment and the removal of the members of the company’s management or voting identically for the decisions requiring a qualified majority; exercising their voting rights based on the same power of attorney and other circumstances showing concerted actions.
For the purpose of defining concerted action, the percentage of shareholding requisite for the existence of control is increased from 25% to 30%. This is in compliance with Article 30 of the Takeover Act, which stipulates that “legal entities or, as the case may be, natural persons and legal entities, act in concert if one of them directly or indirectly controls the other i.e. the other legal entity”, whereby a natural person or a legal entity is deemed to have control of a legal entity if it:
- directly or indirectly owns more than 30% of voting shares or, as the case may be, share capital in that legal entity;
- has the right to manage the business and financial policies of that legal entity based on an agreement.
By virtue of the latest amendments to the Takeover Act, in case a party subject to the obligation to launch a takeover offer is not able to implement the takeover offer individually, it may agree, following the occurrence of the obligation to launch the offer, to act jointly with another party with respect to the launching of the offer.
