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The Wolf Theiss Guide to: Takeovers of Public Companies in CEE/SEE 

THE 

WOLF THEISS 

GUIDE TO: 

Takeovers of Public 

Companies in Central 

& South-eastern Europe

Contents 

Wolf Theiss Takeover Guide 

Introduction 4 

Takeovers in Albania 7 

by Sokol Nako and Rezarte Vukatana 

Takeovers in Austria 21 

by Claus Schneider 

Takeovers in Bosnia and Herzegovina 39 

by Amar Bajramovic 

Takeovers in Bulgaria 53 

by Neli Nedkova 

Takeovers in Croatia 67 

by Tarja Krehić-Ðuranović and David Ayres 

Takeovers in the Czech Republic 85 

by Michal Pravda 

Takeovers in Hungary 97 

by János Tóth, Gábor Erdös and Barnabás Buzási 

Takeovers in Romania 113 

by Bryan Jardine and Adelina Iftime 

Takeovers in Serbia 127 

by Branislav Marić and David Ayres 

Takeovers in Slovakia 139 

by Ľuboš Frolkovič, Petra Hollá and Filip Krajčovič 

Takeovers in Slovenia 151 

by Markus Bruckmueller 

Takeover Directive 165 

Wolf Theiss contact information 187

Introduction 

Introduction 

The European Union’s Directive on Takeover Bids (the Takeover Directive) was intended to 

promote integration of the European capital markets by creating favorable conditions for the 

emergence of a European market for corporate control: efficient takeover mechanisms, a common 

regulatory framework and strong rights for shareholders, including minority shareholders. 

The Takeover Directive has been implemented in the EU Member States and similar legislation 

has been adopted by most of the neighboring countries in Southeastern Europe. 

Implementation of the Takeover Directive has led to considerable advances in certain areas. The 

mandatory share reporting requirements have increased the transparency of reporting of share 

ownership in public companies. The squeeze-out rule, permitting the holders of a supermajority 

of the shares (90% or more) to force the remaining minority shareholders to sell their shares, 

and the related sell-out rules, which allow the minority shareholders to require a supermajority 

shareholder to acquire their shares, have provided a generally uniform level of protection for 

minority shareholders, while permitting supermajority shareholders to acquire full control over 

the entities. 

The most important protection granted to minority shareholders has undoubtedly been the imposition 

of mandatory takeover procedures on shareholders who acquire a controlling interest 

in a public company. The mandatory bid rule provides that if a person acquires control over a 

company, he/she is obliged to make a full takeover bid for all the remaining voting securities of 

the company at an equitable price. This rule protects minority shareholders by granting them a 

right to sell their shares in the event of a change of control as well as the benefit of the premium 

paid for the controlling stake. 

There was strong resistance by EU Member States to the removal of their existing national 

defenses against hostile takeovers. This resistance led to long delays in adopting the Takeover 

Directive and resulted in dilution of the final text. For example, Member States were permitted 

significant leeway in whether or not to impose the board neutrality and the so-called “breakthrough” 

rule -- which were intended to make it more difficult to block takeovers of public companies 

and would remove or reduce existing barriers to takeovers under national corporate laws. 

Countries that had an existing requirement of board neutrality generally retained, and in some 

cases strengthened, that requirement in their implementation of the Takeover Directive. In the 

end, however, almost none of the EU Member States (the Baltic States being the sole exceptions) 

implemented the breakthrough rule in a mandatory form. 

Each Member State has implemented the mandatory bid thresholds and related procedures in 

slightly different ways, but there is uniformity in the general requirement that mandatory bids be 

carried out. Despite the Member States’ reluctance to implement some of the more advanced 

aspects of takeover legislation, the Takeover Directive’s implementation has strengthened the 

overall protection given to minority shareholders. 

The Takeover Directive has been important not only for the existing EU Member States. National 

laws based on the Takeover Directive have been implemented in most of the countries that border 

the European Union. These countries, which generally are either candidates for EU admis-

Introduction 

sion or wish to become candidates, have sought to bring their national laws into conformity with 

EU mandatory law as part of the pre-accession process. 

Many of these countries have large numbers of public companies as a result of their privatization 

programs in the 1990s and the early part of this century. Although the local stock exchanges 

remain somewhat undeveloped, with inactive trading of most companies’ shares, there has been 

marked interest among the international investment community in some of the star companies in 

these markets. The takeover rules that have been implemented should ensure that the minority 

shareholders, many of whom are employees or former employees of privatized state companies, 

eventually reap the economic benefits of share ownership. 

I would like to thank each of the contributors to this Wolf Theiss Takeover Guide for their valuable 

insights into their countries’ laws and markets and for their efforts in making sure that the country 

guides are as up-to-date and accurate as possible. 

David M. Ayres 

Partner 

Wolf Theiss 

www.wolftheiss.com 

June 2008 

***** 

This Wolf Theiss Guide to Takeovers of Public Companies in Central and Southeastern Europe 

is intended as a practical guide to the principal features of national takeover legislation in the 11 

jurisdictions where Wolf Theiss has offices. 

While every effort has been made to ensure that the country guides were accurate when finalized, 

they should be used only as a general reference guide and should not be relied upon as 

definitive for planning concrete transactions. In these rapidly changing legal markets, the laws 

and regulations are frequently revised, either by amended legislation or by administrative interpretation.

Introduction

Takeovers in Albania 

Sokol Nako and Rezarte Vukatana 

Wolf Theiss SH.P.K., Tirana 


The information contained in this article on takeovers in Albania was correct as of 1 June 2008. 

If you have any questions about the content of the article or would like further information about 

takeovers in Albania, please contact: 

Sokol Nako 

Wolf Theiss SH.P.K. 

“Eurocol” Business Center, 4th floor, 

“Murat Toptani” Street 

Tirana, Albania 

Tel.: +355 4 227 4521 – 4521 

Fax.: +355 4 2274 521 

Email: sokol.nako@wolftheiss.com 

David Ayres 

Wolf Theiss advokáti s.r.o. 

Pobřežní 12 

186 00 Prague 8 

Czech Republic 

Tel.: +420 234 765 – 111 

Fax.: +420 234 765 – 110 

Email: david.ayres@wolftheiss.com



The Takeover Regulation 9 

Availability of public information 11 

Negotiated bids 11 

Characteristics of a takeover bid 12 

Terms of a takeover bid 14 

Restrictions on the bidder and the target management following 

announcement of a takeover bid 16 

Competing bids 16 

Timetable for mandatory takeover bid 17 

Role of the regulator 18 

Competition law aspects 18 

Minority squeeze-out 19

Introduction 


Public takeover bids for Albanian companies remain a thing of the future. The privatization of 

Albanian state-owned companies over the last decade has resulted in widespread public share 

ownership. Since the privatization program was initiated, many companies have been acquired 

through various methods, but none have been acquired through a public takeover bid. 

The general legal and practical framework governing the securities markets in Albania has been 

in place since 1996, when the Albanian Securities Commission (the Securities Commission), 

the Tirana Stock Exchange (the Stock Exchange) and the Shares Registration Centre (the Registry 

of Shares) were established and the Law on Securities was adopted. 

However, the legal framework seems to be somewhat in advance of the reality on the ground in 

Albania, where the Stock Exchange is functionally inoperative, companies do not regularly register 

their shares with the Registry of Shares and the takeover regulations do not come into play. 

To date, the Securities Commission, recently integrated into the Financial Supervisory Authority 

(the FSA), has never received any notification of an intended takeover. 

A new Law on Titles (the Law on Titles) was adopted in February 2008 and entered into effect 

in April 2008. This law replaces the Law on Securities and repeals all implementing subordinated 

acts. The FSA is in charge of implementing the Law on Titles and adopting the new subordinated 

acts within one year from the enactment of the Law on Titles. 

The enactment of the Law on Titles has led to considerable uncertainty as to the current state of 

takeover regulation in Albania since there is no clear transition from the old Law on Securities to 

the new Law on Titles. A strict reading of the Law on Titles leads to the conclusion that it repeals 

all acts issued pursuant to the Law on Securities, creating a regulatory vacuum until new implementing 

acts are enacted. However, the FSA is of the opinion that existing acts issued pursuant 

to the old Law on Securities will remain in effect until they are replaced by new acts under the 

Law on Titles. It is unclear how the FSA will address and interpret existing acts or provisions that 

conflict with the Law on Titles. 

The Takeover Regulation 

Public takeovers were regulated principally by the Securities Law, adopted in March 1996, 

and by the Securities Commission’s Regulation on the Acquisition of a Controlling Block 

of Shares (the Takeover Regulation), adopted in January 1999. The new Law on Titles is silent 

with respect to Public Takeovers and repeals the existing Takeover Regulation. The FSA, which 

is the competent authority for interpreting both laws, is of the opinion that the existing Takeover 

Regulation will continue to apply until it is replaced by a new act. This discussion assumes that 

the Takeover Regulation will continue to apply, at least for the time being.

10 


• To whom does the Takeover Regulation apply? 

The Takeover Regulation applies to any joint stock company that is registered as a public company 

under Albanian law. The Law on Titles narrows the concept of public companies to include 

only companies listed on a stock exchange. 

This definition is narrower than the definition of public company that is set out in the Albanian 

Company Law, which extends to all companies whose shares are publicly traded, even if traded 

in the OTC market or other markets outside a stock exchange. The Company Law is expected 

to be replaced in the near future with a new Law on Companies which is expected to be aligned 

with the Law on Titles. 

• When does the Takeover Regulation apply? 

The Takeover Regulation regulates public takeovers, defined as an offer to acquire a controlling 

interest in a public company, including by way of merger. A controlling interest is set at a threshold 

of 50% of the voting rights in the target company. 

In addition to governing a mandatory bid once a shareholder has acquired more than 50% of a 

target’s shares, the Takeover Regulation applies to voluntary bids to acquire shares in a public 

company, including “partial bids” to acquire less than a controlling percentage. Technically, therefore, 

the Takeover Regulation applies to most acquisitions of shares in larger Albanian companies. 

Acquisitions of shares through hostile bids are prohibited without the prior approval of the FSA. 

A number of problems can be found in the Takeover Regulation, including ambiguity over its 

treatment of mergers, which seems to conflict with the provisions of the Albanian Company Law. 

The Company Law interpretation should, in any event, prevail, as laws take precedence over 

regulations. It remains to be seen how such issues will be addressed under the Law on Titles 

and the new Company Law. 

• To what kinds of acquisitions does the Takeover Regulation 

apply? 

The Takeover Regulation regulates both mandatory and voluntary bids for the shares of a 

public joint stock company. 

• Mandatory bids 

Under the Takeover Regulation, a person who, alone or in concert with others, has obtained control 

of more than 50% of the voting shares of a public company, is required to launch a mandatory bid for 

the acquisition of all of the target’s remaining shares, regardless of their class or rights. 

• Voluntary bids 

The Takeover Regulation covers the following voluntary bids: 

- bids for a controlling interest in a target, including by way of merger;


- bids for the shares of a partially owned subsidiary; and 

- partial bids, that is, a bid for shares that is intended to result in the acquisition of a number 

of shares that, when added to the shares already held by the bidder, does not exceed the 

threshold of 50% of the voting shares of the target. The FSA will most likely grant the 

approval for a partial bid only where the intended acquisition does not exceed 35% of the 

voting shares of the target. Approval for the acquisition of more than 35% but no more 

than 50% of the voting shares of a target can be granted by the FSA only when the explicit 

approval of the acquisition has been obtained from all of the shareholders of the 

target company. 

Availability of public information 

With the establishment of the Albanian National Centre for Registration (NCR) in September 

2007, which is the public body in charge of the companies registry in Albania, an effort has been 

made to increase the information available about public companies and to ensure their compliance 

with formal publication requirements. However, to date the companies that have been 

registered with the NCR have been rather lax in their public reporting compliance. 

Joint stock companies are required to publish in an authorized newspaper certain basic information 

pertaining to the company, its headquarters, shareholders and directors, as well as its 

articles of association, initial capital and details in respect of the shares. It must be noted that 

this obligation is rarely complied with. 

Public joint stock companies are required to publicly disclose their financial reports every six 

months. In addition, under the Takeover Regulation, the FSA is required to ensure that there is full 

disclosure of all relevant information affecting the value of publicly offered or traded securities 

from the time of issuance on a continuing and timely basis. 

Despite all of these requirements, the publicly available information about Albanian public and 

private joint stock companies is extremely limited. 

Negotiated bids 

It is possible for a bidder to acquire a majority stake in the target from a controlling shareholder 

(where one exists) in a negotiated transaction prior to launching a mandatory bid for the rest of 

the shares. A negotiated purchase would be expected to eliminate the risk of a competing bid, 

since any competing bidder would be precluded from acquiring majority ownership. A negotiated 

purchase would also allow the acquirer to structure the transaction as a normal private share 

acquisition, involving due diligence on the target. The acquisition agreement could include standard 

closing conditions, representations and warranties, indemnities, etc. 

The Albanian Civil Code does not deal extensively with the concept of contractual representations 

and warranties. Although they may be included in an agreement, there is significant 

uncertainty as to their enforceability under Albanian law. However, any liabilities arising out of 

misrepresentations made by the directors of the target will subject such directors to liability for 

damages. 

11

1 


The commencement of negotiations to acquire shares in a public company will trigger the 

requirement to make a bid or to announce an intention to make a bid. This requirement has been 

ignored in practice, and negotiated bids are the standard way of acquiring shares in a publicly 

held Albanian company. 

Characteristics of a takeover bid 

• Notification 

Before issuing a takeover bid, the bidder must inform the FSA, the Stock Exchange, the 

management board of the target company and the Albanian Competition Authority of its 

intention to make a public takeover bid. 

The notification must include only general information on the bid, such as the conditions attached 

to the offer, the bidder’s identity, and any details of potential conflict of interests with the target. 

• Bid documentation 

In the offer document, the bidder has a duty to provide detailed information, including: 

Ñ details on the bidder and its financial advisor, and details of any agreement to transfer 

to third parties any of the shares for which the bid is being made; 

Ñ the bidder’s future policy regarding the target (including any changes in relation to employment 

matters and the management of the target); 

Ñ details of the shares in the target owned by the bidder; 

Ñ details on the market price for the shares of the bidder and target company, to the extent 

that they are to be exchanged pursuant to the bid; 

Ñ the consideration offered for each share; 

Ñ comments from an independent financial advisor on the ability of the bidder to pay 

any cash consideration provided for in the bid; 

Ñ conditions and withdrawal rights of the bidder in relation to the offer; 

Ñ the period for the acceptance of a conditional bid; 

Ñ financial data, including published data fortthe past five years relating to the capital, 

profit, taxes, dividends, etc.; 

Ñ details of any bonus or redundancy fee to be paid to the directors or any other payment 

related thereto; and 

Ñ details of any agreements or arrangements between the bidder and any director of the 

target company. 

• Approval by FSA 

The bidder is obligated to submit the offer document to the FSA for approval within 21 days after 

the obligation to make the bid arises, together with all required accompanying documentation. 

The FSA must, within 21 business days after submission, either approve the bid or request additional 

documentation, which shall be supplemented within 15 days from the notification of the 

request.

• Information to be provided by the target 


The target’s board must comment on the bid and circulate its views to the shareholders together 

with the comments of the independent financial advisor. 

The Takeover Regulation lays down generic requirements to the effect that the target board must 

submit to the bidder sufficient information and advice to enable the target shareholders to reach 

a properly informed decision on the offer. In particular, the target must furnish the bidder with the 

following information: 

Ñ the views of the directors, report of the independent financial advisor on the bid, intention 

of the directors to accept or reject the bid; 

Ñ the number of shares intended to be acquired by the directors of the target, either in the 

target or the bidder, as well as details of any shares purchased by the directors in the 

target or the bidder during the prior six months; 

Ñ the share capital of the target; 

Ñ detailed financial information; 

Ñ contracts not entered into in the ordinary course of business; and 

Ñ any arrangements between the directors and the company (the Takeover Regulation 

presumably means the target company). 

The Takeover Regulation imposes a duty on the target’s management to make a bid public. The 

regulation makes the target’s management primarily liable for breaches of this rule. 

Under the Takeover Regulation, the directors of the target and the bidder are jointly and severally 

liable for any damages resulting from inaccurate or misleading statements issued by them in 

relation to the takeover. They may be charged with actual as well as constructive knowledge and 

have to sign a declaration to the effect that they have fully considered their statements. 

It should be noted that the wording of the regulations is not always clear; in particular, the use of 

the terms “target” and “bidder” often seem to be confused with each other. 

• Timing of the bid 

In the course of a takeover in which the bidder manages to keep its intentions secret, the schedule 

for launching a bid begins to run from the official announcement of the bid. 

The bid must be submitted to the target by the bidder within 21 days from the day of the announcement 

of an intention to make an offer. This period is extended to 35 days for share-forshare 

offers. Any extension to these time limits must be authorized by the FSA. The foregoing 

time limits do not apply strictly where the bidder has, in its announcement of the offer, conditioned 

the making of the offer on the fulfillment of certain conditions. 

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1 


Terms of a takeover bid 

• Purchase price 

The price offered for the shares may not be lower than the highest price paid by the bidder for 

shares of the target during the six months prior to announcement of the bid. In addition, if the 

bidder acquires additional target shares during the course of the takeover bid at a price higher 

than the offer price stated in the bid, the bid price must be increased to such higher price. Any 

other change in the offer price requires the approval of the FSA. The same price must be offered 

and paid to all shareholders. 

• Cash or shares 

The purchase price may be paid in cash, by an exchange of shares or by a mix of cash and share 

exchange (in certain cases, the bidder must offer only cash or at least offer cash as an alternative 

to shares). The bidder may also offer to pay in cash or by an exchange of shares, leaving it 

for the individual target shareholders to decide which to accept. If shares are offered, the offered 

shares must meet certain criteria. 

• Bid term 

The offer must generally remain open for at least 21 days and cannot remain open for longer 

than 60 days, unless otherwise agreed by the FSA. If the offer is made as an unconditional offer, 

maximum terms do not apply. If a conditional offer becomes unconditional, it must remain open 

for at least 14 days after it becomes unconditional. If the bidder extends the offer, the offer must 

remain open until the extended date for closing or, if the offer is unconditional, until the next notification 

of closing. If the bidder amends the offer, the amended offer shall remain open for not 

less than 14 days. 

• Competing bids 

Unlike the takeover legislation in many other European countries, the Takeover Regulation does 

not provide for a change in the offer term as a result of a competing bid, and in fact makes no 

mention of competing bids at all. 

• Broker 

Under the Takeover Regulation, the bid must be made and other acts in connection with the 

bid must be undertaken by the bidder itself. It is unclear whether the involvement of a licensed 

intermediary in preparing the offer will be mandatory under the Law on Titles. 

• Financial advisors 

The Takeover Regulation requires the target company to appoint an independent financial advisor. 

Such an advisor must comment on whether he finds the bid fair and reasonable. 

• Financing the bid 

The bidder is required to submit a statement from an independent financial advisor to the effect


that the bidder has sufficient monetary assets to fulfill its obligations under the offer. 

• Conditions 

The Takeover Regulation prohibits the bidder from placing conditions on its offer if satisfaction 

of such conditions is subjective or dependent on the bidder itself. A mandatory bid may not be 

conditioned on a minimum or maximum level of acceptance. However, a number of conditions 

are expressly permitted for voluntary offers: 

Ñ the bidder can condition its offer on the grant of approvals and consents from 

relevant authorities, including approvals for a capital increase, the listing of shares, etc. 

A bid that is subject to approval by the Competition Authority cannot be consummated 

until that approval has been obtained; 

Ñ the bidder can condition its offer on the acceptance of the offer by a percentage of the 

shareholders of the target (that is, that it will not be successful if accepted by less 

than a certain percentage); 

Ñ a voluntary bid, other than a partial bid (a bid for less than 50% of a target’s shares), is 

automatically conditioned on the acceptance by the holders of sufficient shares to 

give the bidder more than 50% of the voting rights of the target; 

Ñ the FSA has discretion to limit its approval of partial bids to bids in respect of shares 

carrying not more than 35% of the target’s voting rights; 

Ñ in the event of a conditional offer, the bidder must specify the latest day when the offer 

becomes unconditional. 

• Amendments 

The Takeover Regulation provides for the right of the bidder to revise the terms of an offer, apparently 

without restrictions. The revised terms of the offer are applicable to all shareholders of 

the target, whether or not they have already accepted the offer. The revised offer must be kept 

open for at least 14 days. 

• Withdrawal 

A bidder can withdraw its bid only if the specific conditions of the offer are not fulfilled, except 

when the withdrawal is approved by the FSA. Although it appears that the Takeover Regulation 

allows a broad range of withdrawal rights, a withdrawal on such basis runs the risk that a 

court, applying general principles of Albanian law and practice, in the absence of any experience 

with the Takeover Law, may subsequently declare the withdrawal unlawful. In such a case, the 

shareholders of the target may claim damages from the bidder resulting from such unjustified 

withdrawal. 

1

1 


Restrictions on the bidder and the target 

management following announcement 

of a takeover bid 

Once a takeover bid has been announced, and until it has been concluded, the: 

• bidder may acquire additional target shares outside the takeover bid but, if it does so at a 

price that is higher than that provided for in the bid, the bid price must be increased to such 

higher price; 

• bidder may not sell or exchange any target shares, unless and until it has obtained the 

approval of the FSA for such sale and a period of 24 hours has elapsed from publication of 

the bidder’s right to sell such shares; 

• target’s supervisory or management board may not, without the prior authorization of 

the shareholder’s general meeting, carry out any action to frustrate the bid. Specifically, 

the target may not: 

- increase its share capital; 

- issue any shares; 

- issue or grant options in respect of any unissued shares; 

- create or issue or permit the creation or issue of any securities carrying rights of 

conversion into, or subscription for, shares of the target; 

- sell, dispose of or acquire or agree to sell, dispose of or acquire material assets; 

- enter into contracts, including service contracts, otherwise than in the ordinary course 

of business; 

- cause the target, or any subsidiary or associated company, to purchase or redeem any 

shares in the target or provide financial assistance for any such purchase; 

- undertake activities that are not within the target’s usual scope of business 

and that could seriously affect the financial situation of the target; 

- acquire or sell treasury shares; or 

- take any measures with the intention of hindering the acceptance of the takeover bid or 

making it more difficult for shareholders to accept the takeover bid. 

The management board of the target is entitled to require the bidder to provide assurances that 

the bidder will be able to implement the bid in full. 

Competing bids 

The management of the target must disclose information specifically requested by an actual or 

potential bidder, if such information is available.

Timetable for mandatory takeover bid 

Activity Timing 

Obligation to announce 

intention to launch a 

bid to the Agency, the 

target‘s management 

board, and the Competition 

Authority 

An emergency launch 

may be ordered by the 

FSA 

Prior to launch, the bidder 

must 

Offer launch 


• when a firm intention to make an offer is notified to the 

board of the target; 

• immediately after an acquisition of shares which 

gives rise to a mandatory takeover; 

• when negotiations or discussions are about to be extended 

to include more than a very restricted number of 

people, outside those who need to know in the companies 

concerned and their immediate advisers. 

• if, following an approach to the target, the target is 

the subject of rumor and speculation or there is undue 

movement in its share price, or a significant increase 

in the volume of share turnover, whether or not there is a 

firm intention to make an offer; or 

• if, before an approach has been made, the target is the 

subject of rumor and speculation or there is undue 

movement in its share price, and there are reasonable 

grounds for concluding that it is the potential bidder’s 

actions which have led to the situation. 

Obtain the approval of the FSA for the offer documents. 

The time allowed for acceptance of a bid must not be less 

than 21 days and no more than 60 days from the date of the 

publication of the offer. 

The Takeover Regulation provides for the following extensions 

of the offer term: 

+ minimum 14 days: if the bidder, during the offer term, improves 

the bid (i.e., sets a higher offer price as a result of 

cash purchases of the shares of the target during the offer 

period); 

+ minimum 14 days: if a conditional offer becomes unconditional; 

1

1 



Publication of success of 

the bid by the bidder 

Providing notification of 

the relevant data to the 

FSA, Stock Exchange, 

and the Competition 

Authority 

Role of the regulator 

+ minimum 14 days: if the bidder revises the terms of the 

offer. 

Immediately after the expiry of the bid period. 

Two copies of all documents must be filed with the FSA 

for comment prior to release or publication and must not 

be released or published until the FSA has confirmed that 

it has no further comments thereon. The final copy of the 

document must be filed with the FSA and the Stock Exchange 

in duplicate. 

The FSA supervises all public aspects of the takeover process, including such things as determining 

whether there is an obligation to carry out a takeover bid. 

Breaches of the Law on Titles may lead to criminal or civil charges. However, since the Law on 

Titles does not regulate takeovers until the FSA enacts new acts, it remains unclear how the FSA 

will address violations related to Public Takeovers. 

Competition law aspects 

The legal basis for regulating competition in Albania is set forth primarily in the law on protection 

of competition (the Competition Law), which aims to protect free and effective competition. The 

Competition Law is enforced by the Competition Authority. 

Under the Competition Law, a concentration includes a merger of two or more companies, the 

acquisition of a company or portions thereof (directly or indirectly), and the establishment of a 

new joint company. However, the purchase of shares in a company by a financial, credit or insurance 

institution for the purpose of reselling them within one year from the date of the acquisition 

is not considered to be a concentration, provided that the voting rights associated with these 

shares are not exercised during this one-year period.


An acquisition of target shares will require a notice to and approval from the Competition Authority 

if the: 

Ñ total worldwide turnover of the bidder (and persons acting in concert) and the target 

from the sale of goods and/or services is more than 70 billion ALL (approximately 

EUR 570 million) in the financial year preceding the acquisition; and 

Ñ total domestic Albanian turnover of each of the bidder (and persons acting in concert) and 

the target from the sale of goods and/or services is more than 800 million ALL 

(approximately EUR 6.5 million) in the financial year preceding the acquisition; and 

Ñ turnover in the Albanian domestic market of at least one participating company is more 

than 500 million ALL (approximately EUR 4.1 million). 

Notwithstanding the thresholds stated above, the Competition Authority may allow a concentration 

to go through when one of the participating companies faces bankruptcy and does not have 

any other more competitive option, other than such concentration, provided that without the concentration, 

the company is likely to exit the market in the near future; and there is no possibility 

of reorganizing the activity of such company. 

Concentrations are considered by the Competition Authority through preliminary and 

extended procedures. In order to prevent damage to the participating companies or to third 

parties, the Competition Authority may issue a temporary merger authorization, defining relevant 

conditions and obligations for effective competition. 

The preliminary procedure applies when a merger does not create or reinforce a dominant position 

in the relevant market. The Competition Authority has to decide on the merger within two 

months from the date of notification, which can be extended by another two weeks. 

The extended procedure applies if there is a threat of a dominant position being created or reinforced. 

The Competition Authority must investigate the case and issue a decision within three 

months from the start of such procedure, which can be extended by another month. 

If, within that time, the participating companies do not receive a decision from the Competition 

Authority, the authorization is granted ex-officio. 

Minority squeeze-out 

Albanian law makes no provision for squeezing out minority shareholders. 

1

0 

Takeovers in Albania

Takeovers in Austria 

Claus Schneider 

Wolf Theiss, Vienna 


The information contained in this article on takeovers in Austria was correct as of 1 June 2008. 


takeovers in Austria, please contact 


Wolf Theiss Rechtanwälte GmbH 

Schubertring 6 

1010 Wien 

Austria 

Tel.: +43 1 515 10 - 0 

Fax.: +43 1 515 10 – 25 

Email: claus.schneider@wolftheiss.com 

David Ayres 



186 00 Prague 8 


Tel.: +420 234 765 – 111 

Fax.: +420 234 765 – 110 

Email: david.ayres@wolftheiss.com 

1



The Takeover Act 23 

Reporting share ownership 26 


Available information 27 







Role of the Commission 35 



Introduction 


The low level of market capitalization of Austrian companies and the scarcity of large publicly 

traded companies mean that public takeovers are rare in Austria. Therefore, the Austrian publicly 

traded practice in corporate control transactions cannot be compared with that in the UK or USA, 

where more frequent bids are made for control of public companies. 

However, in the mid- to late 1990s the Austrian markets saw a significant increase in the number 

of takeovers, prompted both by Austria’s joining the European Union (the EU) and by the need 

for Austrian companies to restructure their businesses in the face of increased international competition. 

As of 1 March 2007, the Austrian Takeover Commission (Übernahmekommission) (the 

Commission), which is the authority responsible for the enforcement of the Austrian Takeover 

Act (Übernahmegesetz) (the Act) dealt with 36 public takeover bids, 25 of which were linked to a 

“controlling interest”, meaning that the bidder had the intention to acquire a controlling interest in 

the target company (9 voluntary offers to acquire a controlling interest) or that an offer had to be 

made due to the bidder having obtained a controlling interest (16 mandatory offers). The different 

types of offers foreseen by the Act are further described below. 

It is a peculiarity of the Vienna Stock Exchange (Wiener Börse AG; the VSE) that most listed 

companies are controlled by a majority shareholder or by a syndicated group of shareholders. 

There are only few listed companies where the free float exceeds 50%. Therefore, in a typical 

takeover situation in Austria, the bidder approaches the controlling shareholder before the offer 

is announced and often before the management board of the target company is informed. 

In such situations, the bidder usually either tries to obtain irrevocable undertakings from the 

controlling shareholder(s) or even concludes a share purchase agreement with the controlling 

shareholder(s) before the public bid is launched. 

The Takeover Act 

Public takeovers are regulated by the Act, which implements Directive 2004/25/EC on takeover 

bids (the Directive) into Austrian law. The Act came into force on 1 January 1999 and it regulates 

takeovers in a similar way to many EU member states. 

There have been several public takeovers in Austria under the regime of the Act and most have 

been recommended deals. Hostile takeovers are very rare. The hostile bid by Bank Austria for 

Creditanstalt in 1996 was one of the factors that led to the implementation of the Act. 

The Act contains five general principles; these serve as a guideline when interpreting the rules 

contained in the Act. 

Ñ Equal treatment of all shareholders of the target company; 

Ñ Sufficient time and information for the addressees of a bid; 

Ñ Neutrality of the management board of a target company; 

Ñ No creation of false markets in securities; and 

Ñ Prompt completion of takeover procedures.


The Commission takes a proactive role in the takeover process. Uncertainties or conflicting views 

on the provisions of the Act are in practice often resolved in advance through informal discussions 

with the Commission. The Austrian Capital Market Act (Kapitalmarktgesetz) also contains rules 

applicable in connection with public takeovers (for example, prospectus requirements) as does 

the Austrian Stock Exchange Act (Börsegesetz) (for example, disclosure obligations). 

• When does the Act apply? 

Full applicability of the Act needs to be distinguished from only a partial applicability: 

FULL APPLICABILITy 

The Act applies in full to all public bids to acquire shares in a stock corporation (Aktiengesellschaft) 

(i) having its registered seat in Austria and (ii) the shares of which are admitted to a 

regulated market of an Austrian Stock Exchange (i.e., the Official Market (Amtlicher Handel) or 

the Second Regulated Market (Geregelter Freiverkehr) of the VSE, which currently are the only 

regulated markets in Austria). 

PARTIAL APPLICABILITy 

The Act provides for a complex system of applicability to target companies with their registered 

seats in Austria and an exchange listing abroad or vice versa (registered seat abroad and listing 

on a regulated market of the VSE). In such situations, only certain provisions of the Act apply. 

Provisions applicable in the case of a target company with its registered seat in Austria and an 

exchange listing abroad comprise inter alia the following: 

• provisions on the notification of employees of the target company (insofar as these norms refer 

to the notification of such employees), 

• provisions on the obligation to maintain objectivity and neutrality, 

• provisions on the obligation to make a bid, and 

• provisions on exceptions from the obligation to make a bid. 

In order to safeguard a consistent takeover regime in the European context, the Act contains 

provisions on the international collaboration of European supervisory authorities. 

• To which situations does the Act apply? 

The Act regulates both mandatory and voluntary bids for shares in an Austrian stock corporation 

(see above for details on the applicability of the Act). 

MANDATORy BIDS (PFlICHTAnGEBoTE) 

A mandatory takeover offer is required if the bidder acquires a direct or indirect “controlling


interest” in a target company. A direct controlling interest is a direct interest in a target company 

which gives the holder more than 30% of the shares with permanent voting rights. An indirect 

controlling interest exists if a legal entity (irrespective of its legal form and whether it is listed or 

not) holds a controlling interest in the target company (i.e. a company listed on the VSE) and 

shares in this “intermediary”, or any other right, give the opportunity to exercise a controlling 

influence over such intermediary company. 

VOLUNTARy BIDS 

In the area of voluntary bids, two different offer structures need to be distinguished: A (simple) 

voluntary offer and a public tender offer: 

• VOLUNTARy OFFERS (Freiwillige öffentliche Übernahmeangebote) 

A voluntary offer (as opposed to a public tender offer or a mandatory offer) is not connected to a 

“controlling interest”. It is neither a consequence nor a means of acquiring a controlling interest 

in a target company. In practice, two important areas where voluntary offers are regulated by the 

Act are (i) an intended delisting of the target company and (ii) the acquisition of own shares by a 

listed company. Unlike in a mandatory bid or a public tender offer, in a voluntary bid the bidder 

may freely determine the offer price and is not bound by provisions with regard to the minimum 

consideration or type of consideration that must be offered. A pure “share offer” (i.e., without 

offering cash consideration) is therefore possible in a voluntary offer. 

Because it covers voluntary offers, the Act is broader in scope than the Directive, which deals 

only with offers linked to a controlling interest. 

• PUBLIC TENDER OFFERS (Freiwillige Angebote zur Kontrollerlangung) 

The Act provides for so-called (voluntary) starting mandatory offers or public tender offers; 

these are voluntary offers that are from the very outset combined with an offer to all shareholders 

should more than 50% of the addressees accept the bid. Such structure is often chosen in cases 

of block trades where the acquisition is still conditional upon a positive decision by the competition 

authorities (whether at the Austrian or European Commission level). In such a situation, a 

public tender offer has the advantage that the market price can be “frozen” at a minimum level 

for the offer price; when a change of control is effected as a result of a successful bid, generally 

no new mandatory offer needs to be made, which reduces the total time required for the takeover 

transaction. 

• To what kinds of acquisitions does the Act not apply? 

The Act does not require a mandatory bid to be made by a bidder where another shareholder 

(together with parties with whom it is acting in concert) holds at least an equal number of shares 

with voting rights in the target company as the bidder. 

An exemption from the Act also applies where the shares do not confer a controlling interest. 

For example, a historically high level of shareholder attendance at shareholders’ meetings of a 

target company may mean that the acquisition of 30% of that target company‘s shares would not 

actually confer “control”.


A third exemption from the mandatory offer requirement is available where a person obtains a 

controlling interest without taking any action himself (“passive acquisition”), provided, however, 

that such person was not able to anticipate obtaining the controlling interest. In such cases, the 

person merely has to notify the Commission. 

However, in cases of a passive acquisition, and also in cases where a person acquires more 

than 26% but not more than 30% of all voting rights, the voting rights in excess of 26% cannot 

be exercised. The Commission can, upon request, replace this suspension of voting rights with 

conditions and requirements that provide a comparable level of protection for the other shareholders. 

The Commission may not override the suspension of voting rights in excess of 30%. 

Reporting share ownership 

The Austrian Stock Exchange Act contains disclosure requirements triggered by changes in 

voting rights of listed companies. If someone acquires or sells, directly or indirectly, shares in 

a publicly listed Austrian stock corporation and as a result reaches, exceeds or falls below a 5, 

10, 15, 20, 25, 30, 35, 40, 45, 50, 75 or 90% stake in the corporation, that person must notify 

the VSE, the Austrian financial market authority (Finanzmarktaufsicht; the FMA) and the target 

company. These notifications must be made within two days of the acquisition or disposal. 

Furthermore, the Act provides that anyone who (directly or indirectly) obtains a controlling interest 

in a target company shall immediately notify the Commission, and within 20 trading days of 

obtaining a controlling interest announce a bid for all of the equity securities of the target company 

in accordance with the provisions of the Act. 


Under the Act, a bidder is given some leeway to conduct preliminary negotiations. The bidder is 

expressly permitted to negotiate either with the target company and/or with the target company’s 

shareholders before the offer is announced. These approaches are generally not limited with 

regard to timing or the number of shareholders that may be approached. However, all persons 

involved have to comply with the insider trading provisions of the Austrian Stock Exchange Act 

and the bidder has to keep its intention confidential. Furthermore, if there are leaks into the market, 

the Commission may compel the bidder to disclose its intentions. 

Since the majority of the companies listed on the VSE are controlled by one (or a few) major 

shareholder(s), it is not unusual in Austria for a bidder to acquire a majority stake in the target 

company from a controlling shareholder in a privately negotiated transaction (including conducting 

due diligence on the target company) prior to launching a mandatory bid for the rest of the 

outstanding shares. Such a block trade of a majority stake usually eliminates the risk of a competing 

bid, since any competing bidder would be precluded from acquiring majority ownership. 

The acquisition agreement will typically include representations and warranties, indemnities, 

standard closing conditions, etc.


There is no legal requirement for a bidder to negotiate or even approach the target company 

before announcing an offer. The Act only provides that an offer has to be communicated to the 

board of the target company at the latest when the offer is publicly announced. 

Available information 

INFORMATION ON THE TARGET COMPANy 

The main source of information on an Austrian stock corporation is the Austrian Companies 

Register (Firmenbuch), which is open to public inspection. In particular, the following information 

will be available from this source: 

• The stock corporation’s articles of association, showing inter alia its share capital; 

• minutesofshareholders’meetings,includingalistofshareholdersattendingthosemeetings; 

shareholders represented by banks or other nominees do not appear on this list; 

• the company’s accounts and the related reports of the members of the managing board and 

the auditors; and 

• details of members of the managing board and the supervisory board. 

In addition, announcements that stock corporations are required to make (for example, if the 

authorized share capital is increased) are made through journals designated in the articles of 

association (usually the official gazette, Amtsblatt zur Wiener Zeitung). 

The Austrian Stock Exchange Act requires companies listed on the VSE to publish annual financial 

statements and quarterly reports. Additionally, such companies must announce immediately 

any information that might affect the share price, for example significant acquisitions and disposals 

of material assets (“ad-hoc publication obligation”). 

INFORMATION ABOUT THE TARGET‘S SHAREHOLDERS 

A company has to keep a register of holders of registered shares, which must be open to inspection 

by its shareholders. There is no requirement to maintain a register of holders of bearer 

shares even if known to the company. If such a register is maintained, which would be unusual 

in Austria, it must also be open to inspection by shareholders. The share register is not open to 

inspection by third parties, but they can obtain lists of shareholders who attended shareholders’ 

meetings from the Austrian Companies Register. 

Disclosure requirements are triggered by changes in voting rights of listed Austrian stock corporations 

(contrary to non-listed stock corporations where no such obligation exists); for details, 

see above. These are published on the homepage of the FMA.



Principal features of takeover bids under the Act include: 

• Notification / Confidentiality 

A bidder must announce its intention to make a takeover bid if: 

• The management board and the supervisory board (if any) of the bidder decide to make 

a bid; or 

• events occur that oblige the bidder to make a mandatory bid (i.e., the bidder acquires a controlling 

interest in the target company); or 

• undue fluctuations in the target company’s share price or rumors develop as a consequence 

of the bidder‘s preparations to make a bid. 

The bidder must inform the target company’s management board and the Commission of its 

intention to announce a takeover bid. Upon being informed, the target company must in general 

observe its duty of confidentiality with regard to the bidder‘s intention to make a bid. 

The disclosures have to be made in a manner so as to prevent as far as possible the creation 

of false markets and insider trading. Upon application of the bidder, and taking into account the 

interests of the target company’s shareholders, the Commission may suspend the bidder from its 

duty of disclosure for a short period if doing so helps to avoid damaging the legitimate interests of 

the bidder (or parties acting in concert) and the bidder certifies that confidentiality is ensured. 

The management board and the supervisory board of the target company have to ensure confidentiality; 

however, the management board of the target company is obliged to disclose the 

bidder‘s intention if there is a substantial movement in the share price of the target company, or 

if rumors or speculation concerning a bid arise and there are reasonable grounds for concluding 

that these originate in the preparations or plans of the bidder. 

Shareholders of the target company, with whom the bidder negotiates in confidence, and shareholders 

who otherwise acquire knowledge of confidential facts from the bidder or from the target 

company, are also bound by the confidentiality obligation. 

• offer document 

A takeover bid in Austria typically consists of a general offer made by a bidder to all target company 

shareholders to acquire their shares. The offer has to be published on the website of the 

bidder and/or the target company, as well as in one of the Austrian national newspapers or in a 

brochure format. The bidder does not send the offer document or acceptance forms directly to 

the shareholders. Acceptances are normally handled indirectly by an agent. 

As noted above, under the Act all shareholders must be given sufficient time and information 

to make an informed decision on the bid. Furthermore, shareholders must be treated equally – 

there must be no selective disclosure of information.


The Act sets out minimum requirements for the offer document. The offer document has to contain: 

• the terms of the offer; 

• particulars of the bidder, including, if it is a company, its legal form, name and registered 

office and particulars of direct and indirect shareholdings in the bidder; 

• the securities for which the offer is being made; 

• the consideration offered for each class of securities and the method of valuation used in 

determining the consideration and, if applicable, the basis of the calculation; 

• details of how the offer is being made and in particular of the agents authorized to receive 

acceptances and to pay out the consideration; 

• where applicable, the maximum and minimum percentages or quantities of securities the 

bidder is seeking to acquire and a description of the rules of allocation; 

• the existing shareholdings of the bidder and of persons or entities acting in concert 

with the bidder in the target company, plus any shareholdings in the target company 

that such persons are entitled to acquire or must acquire in the future; 

• all conditions to which the offer is subject and whether shareholders have withdrawal 

rights; 

• the bidder’s intentions with regard to the future business of the target company and, 

insofar as it is affected by the bid, the bidder’s own company, the safeguarding of 

employee and management jobs, including any material change in the conditions of 

employment, and, in particular, the bidder’s strategic plans for the two companies and the 

likely repercussions for employment and the locations of the companies’ places of 

business; 

• the period for acceptance of the offer and for payment of the consideration; 

• where consideration is offered in the form of securities, particulars as specified in the 

Austrian Capital Market Act and the Austrian Stock Exchange Act; 

• the conditions of the bid financing; 

• information on persons or entities acting in concert with the bidder or, if known to the 

bidder, with the target company – in the case of companies, this information includes their 

legal forms, names, registered offices and relationships with the bidder and, where 

possible, with the target company; 

• the compensation offered for the rights (e.g., a limitation on the transferability of shares in 

the target company) that might be removed as a result of the breakthrough provisions 

laid down in the Act, with particulars of the way in which that compensation is to be paid 

and the method employed in determining it; and 

• the law that governs contracts concluded between the bidder and the shareholders of 

the target company as a result of the bid, as well as the courts competent to resolve 

contract disputes. 

• Filing with the Commission 

The offer documentation must be filed with the Commission before it is published. The Commission 

checks whether the terms of the offer (especially with regard to the offer price) comply with 

the Act and may prohibit the offer from going ahead. The Commission also checks whether the 

information requirements under the Act are satisfied.

0 


• Appointment of expert 

The bidder must appoint a suitably qualified expert to provide advice throughout the proceedings 

and to examine the offer document. The expert, which needs to be independent from the bidder, 

has to confirm that the offer document is complete and in compliance with the Act, in particular 

with regard to the consideration offered, and that the bidder has the financial means to fulfill the 

offer. The expert then will have to draw up a report and summarize the results of its review in a 

statement. This statement is then published together with the offer documents. 

Certified accountants, investment banks and certain other financial institutions may qualify as 

“independent experts” under the Act. It is questionable whether the bidder’s investment bank 

would qualify as an independent expert, especially if it advises on a success fee basis, which is 

the standard in such kind of transactions. 

• Information provided by target 

The managing board and the supervisory board of the target company must state their views on 

the bid within ten trading days after the offer document is published but at least five trading days 

before the end of the acceptance period. This statement has to cover an assessment of whether 

the consideration offered and the terms of the bid take appropriate account of the interests of 

all shareholders and of holders of other securities in the target company, of the employees, the 

creditors and also of the public interest. If the administrative bodies of the target company are 

unable to give a firm recommendation, they must still outline the arguments for and against accepting 

the offer and highlight the most important features of the offer. 

Most importantly, the boards of the target company are under an obligation of neutrality. They 

must refrain from taking any measures that may deprive shareholders of the target company of 

the opportunity to make a free and informed decision on the bid. 

In addition, the management board of the target company must appoint an independent expert 

to advise the company and evaluate the offer, in particular with regard to the offer terms and 

consideration offered. 



The price for a mandatory offer cannot be less than the higher of (i) the average market 

price paid for target shares during the six-month period prior to announcement of an intention 

to make an offer and (ii) the price paid by the bidder (and any persons with whom it is 

acting in concert) for any shares of the target during the twelve months prior to the filing of the 

offer documentation with the Commission. A mandatory offer has to be in cash, although shares 

may be offered as an additional alternative to the basic cash offer.


Generally no minimum consideration rules exist with regard to voluntary offers. However, if the 

bidder buys shares during a voluntary offer at a price above the offer price, it will have to increase 

the price it offers to all shareholders. 

• Bid term 

The offer must remain open for at least two weeks and cannot remain open longer than ten 

weeks after the offer document has been published. 

• Conditions and withdrawal 

There are different rules for voluntary and mandatory offers, with the bidder having more freedom 

to include conditions in a voluntary offer. Any condition would have to be based on objective 

criteria and not on the subjective decision of the bidder. A mandatory offer may only be subject 

to conditions required by law (for example, receipt of any required competition clearances). 

The acceptance condition on a voluntary offer will usually be that the bidder achieves in total a 

50, 75 or 90% shareholding in the target company. 

Public tender offers, i.e., offers where the bidder might achieve a controlling interest in the target 

company, are, according to a mandatory provision of the Act, always subject to the condition 

that the bidder’s offer be accepted by shareholders whose shares, together with those already 

held by the bidder (whom it is acting in concert), represent at least 50% of the target’s voting 

securities. 


During the offer period, the bidder may improve the consideration offered or otherwise change 

the bid for the benefit of the target company’s shareholders. An improvement is not permitted if 

the bidder has declared that it would under no circumstances make an improvement; this will, 

however, not apply if a competing bid comes up or if the Commission has authorized an improvement 

on the bid. 

The same rules on notification, examination and publication apply to a revised bid; the bidder has 

to publish the improved or otherwise revised bid not earlier than four and not later than seven 

trading days after its notification to the Commission. After publication of the improvement, at 

least eight exchange trading days must be available for acceptance. 

Improvements to the consideration and any other revisions for the benefit of the target company’s 

shareholders apply to acceptances already given, unless the holders object thereto. 

1



management following announcement of 

a takeover bid 

Once a takeover bid has been announced, and until the expiry of the period for its acceptance: 

• From the date of disclosure of the intention to make a bid, the bidder (and any parties acting in 

concert) have to refrain from making any declarations for the purpose of acquiring shares of 

the target company under more favorable conditions than those set out in the offer document 

unless (i) the bidder improves the bid accordingly or (ii) the Commission grants an exemption for 

significant reasons; in all cases, such declarations must be disclosed immediately. 

• The target may not, without a resolution of the shareholders’ meeting, take actions that could 

possibly be detrimental to the offer. This includes inter alia 

- issuing new shares; 

- entering into a transaction that is outside the company’s day-to-day business; 

- taking actions or conducting business that could seriously jeopardize the financial 

situation of the company; 

- acquiring treasury shares or other securities conferring rights on the treasury shares; or 

- taking any actions that might frustrate the bid, unless the target company has obtained the 

prior consent of the general meeting. 

However, the target company’s management board is explicitly entitled by the Act to search for, 

approach and negotiate with other potential bidders (“white knight”). 


The Act does not explicitly obligate the target company‘s management board to provide information 

to any bidder. However, it is a general principle of Austrian corporate law that the management 

board of the target company must consider the interests of all stakeholders, meaning 

the shareholders, employees and creditors. The management board of the target company will 

therefore usually not withhold information from a good faith bidder whose offer could be more 

favorable than the original offer. 

The receipt of information may prevent the bidder from buying shares in the target company if the 

information amounts to “insider information” as defined in the Stock Exchange Act. The restriction 

on buying shares would normally fall away once the bid is announced on the basis that, if the 

bid is made at a premium, the information will no longer be regarded as price sensitive. 

A bidder has little scope for effective deal protection measures during pre-offer negotiations 

under the Act due to the target company’s management board‘s obligation of neutrality. It will 

normally not be in a position to agree to deal protection measures unless such measures are 

approved by the shareholders’ meeting.




intention to launch a bid 

to the target company’s 

management board: 

Negotiations with the 

target company 

Examination of the offer 


The most straightforward method of trying to shut out other bidders is to purchase as many 

shares in the target company as possible (or obtain irrevocable undertakings by the majority 

shareholders to sell their stakes) before the offer is announced. Because of the disclosure 

requirements of shareholdings in listed companies, it is unlikely that a bidder could build up a 

substantial stake in the target company covertly. 

Exclusivity and/or non-solicitation agreements are more often concluded with the controlling 

shareholder(s) than with the target. 

If a valid competing offer is made, and provided that the initial offer is still open for acceptance, 

every shareholder that accepted the initial offer has the right to withdraw its acceptance and 

accept the competing offer. 

The bidder must disclose to the administrative bodies of 

the target company immediately the fact that its management 

and supervisory board have decided to make a bid, 

or circumstances have arisen which trigger its obligation 

to make a bid (e.g., there is a substantial movement in the 

price of the target company‘s securities or rumors concerning 

the bid arise, and there are reasonable grounds 

for concluding that these originate in the preparation of the 

bid, the plans of the offeror to make such a bid or in the 

purchase of shares by the bidder). 

The bidder may inform the administrative bodies of the 

target company of its plans or its intention to make a bid 

before these are disclosed and may enter into negotiations 

with them. 

The administrative bodies of the target company have to 

ensure confidentiality; however, the management board of 

the target company must disclose the matter if there is a 

substantial movement in the share price or if rumors and 

speculation concerning a bid arise and there are reasonable 

grounds for concluding that these originate in the 

preparation of the bid or the plans of the potential bidder 

to make such a bid. 

The bidder has to appoint a suitably qualified expert to provide 

advice throughout the proceedings and to examine 

the offer document. The expert needs to verify that the



Notification of the 

Commission 

Publication & information 

on the target company 

Obligation of neutrality of 

the target company 

Appointment of an expert 

by the target company 

offer document is complete and in compliance with the Act, 

in particular regarding the consideration offered. It draws 

up a written report and summarizes the results of its examination 

in a statement which includes a declaration that the 

potential bidder has the funds necessary to pay the full 

consideration for the shares that are subject to the bid. 

The bidder notifies the Commission of the offer and provides 

to the Commission the offer document and the 

expert’s report and findings referred to above. The bidder 

must notify the Commission (and submit the necessary 

documents) within ten trading days after disclosing 

its intention to make a bid; the Commission may, 

upon application by the bidder, extend this period to a maximum 

of 40 trading days. The Commission confirms receipt 

of the notification and indicates the date of receipt. 

The bidder publishes the offer document and the expert’s 

findings no earlier than the twelfth and not later than the 

fifteenth trading day after receipt by the Commission, unless 

the Commission has prohibited the publication of the 

bid. In certain cases, the Commission may order the postponement 

of the publication, in particular with a view to 

carrying out a more detailed examination of the offer document; 

it may also shorten the period until publication by 

agreement with the bidder. 

Before publication, the bidder has to bring the offer document 

to the attention of the target company‘s management 

board. 

From the time when the target company becomes aware 

of the bidder’s intention to make a bid and until the publication 

of the results, and if the takeover goes ahead until 

the bid has been completed, the management board 

and supervisory board of the target company may take 

concrete measures that might prevent or affect the bid 

(with the exception of the search for a white knight) only 

with the approval of the shareholders’ meeting. 

The target company has to appoint a qualified and independent 

expert to provide advice throughout the proceedings 

and to examine the response made by its administrative


Response of the target 

company: 

Period for accepting 

the bid 

Publication of the 

outcome of the bid 

Prolongation of the 

acceptance period 

Role of the Commission 


bodies (see below). The appointment of the expert requires 

the consent of the supervisory board. 

The target company has to publish the response of its management 

board and supervisory board, stating their views 

on the bid, within ten trading days after the publication of the 

offer document. The response must contain, in particular, 

an assessment of whether the consideration offered and the 

other terms of the offer take adequate account of the interests 

of all stakeholders (shareholders and holders of other 

participation securities), and what the probable effects of the 

bid would be on the target company based on the strategic 

planning of the bidder regarding the target company, especially 

with respect to employees (jobs, working conditions 

and business locations), creditors and the public interest. 

The period for accepting the bid must not be less than two 

weeks and not more than ten weeks after the publication of 

the offer document. 

The bidder must publish the result of the bid immediately 

after the end of the acceptance period. 

The acceptance period is prolonged for those shareholders 

who have not hitherto accepted the bid by three months from 

the day of the announcement in the following cases: 

• A mandatory bid has been made; 

• The offeror owns more than 90% of the share capital 

with voting rights after a voluntary bid; or 

• A voluntary bid is contingent on the acquisition of a 

certain minimum number of shares and this condition 

has been met. 

To fulfill the tasks specified in the Act, the Commission has been set up at the offices of the VSE. 

However, the Commission is a body independent from the VSE as well as from the public administration. 

The Commission is in charge of supervising the offer procedure (especially with regard 

to the offer document) and deciding whether a mandatory bid has to be made.


The Commission is particularly involved in monitoring unusual fluctuations in share prices or 

other market activity. 


An acquisition may be subject to Austrian or EU merger control. The Austrian Cartel Act (Kartellgesetz) 

requires pre-merger notification and clearance of a transaction within the meaning of 

the Austrian Cartel Act if in the business year prior to the transaction (i) the combined aggregate 

world-wide turnover of the undertakings concerned was more than EUR 300 million, (ii) the combined 

turnover in Austria was more than EUR 30 million and (iii) at least two of the companies 

concerned had an annual worldwide turnover of more than EUR 5 million each (§ 9 (1) Austrian 

Cartel Act 2005). 

The Austrian Cartel Act provides for an exemption from a filing obligation under § 9 (1) if (i) the 

turnover in Austria of only one of the undertakings concerned was more than EUR 5 million and 

(ii) the aggregate worldwide turnover of the other undertakings concerned was not more than 

EUR 30 million. 

Merger notifications must be filed with the Austrian Federal Competition Authority (Bundeswettbewerbsbehörde), 

which must publish a short summary of the transaction on its website and 

transmit a copy of the notification to the Federal Antitrust State Attorney (Bundeskartellanwalt). 

After having received the notification, the Austrian Federal Competition Authority and the Federal 

Antitrust State Attorney have to assess the notified concentration (whether it creates or 

strengthens a dominant position on the relevant market) within a period of four weeks (“Phase 

I proceedings”). If the notified concentration raises no competition law concerns, the case will 

be cleared in Phase I. Otherwise, the Austrian Competition Authority or the Federal Antitrust 

State Attorney can request the Cartel Court to conduct an in-depth investigation (“Phase 2 proceedings”), 

which may take up to five months from the instigation of the in-depth investigation. 

A concentration is automatically cleared if the four-week period elapses without an in-depth investigation 

having been requested by the Austrian Federal Competition Authority or the Federal 

Antitrust State Attorney. 

In the “Phase I proceedings” the parties may also ask for a waiver to request an in-depth investigation, 

the consequence of which is that the competition authority may clear the merger earlier 

than the end of the four-week period if it is clear that there are no competition problems. 

Until the merger has been cleared, the transaction must not be implemented. Actions implementing 

the transaction are automatically void, and fines may be imposed on the companies involved, 

if the transaction has not been duly notified or cleared before its implementation. Consequently, 

a bidder may launch its offer without clearance having been granted but may not complete the 

bid without prior approval of the merger by the competition authority.



There is a procedure under Austrian law that allows a successful bidder, after acquiring an interest 

in the target company representing at least 90% of the capital with voting rights and at least 

90% of the voting rights, to require the holders of all remaining securities to sell those securities 

to the bidder at a fair price. The bidder must offer to pay for the remaining securities in cash, 

though it may also offer securities as an alternative. The squeeze-out requires a shareholders’ 

resolution.

Takeovers in Austria

Takeovers in Bosnia and Herzegovina 

Takeovers in Bosnia 

and Herzegovina 

Amar Bajramovic 

Wolf Theiss d.o.o. za consulting, Sarajevo 

The information contained in this article on takeovers in Bosnia and Herzegovina was correct as of 

1 June 2008. 


takeovers in Bosnia and Herzegovina, please contact: 

Sead Miljkovic 

Fra Anđela Zvizdovića 1, Tower A/12 

71 000 Sarajevo 

Bosnia and Herzegovina 

Tel.: +387 33 29 6 – 444 

Fax.: + 387 33 29 64 – 25 

Email: sead@lawoffice-miljkovic.ba 

David Ayres 



186 00 Prague 8 


Tel.: +420 234 765 – 111 

Fax.: +420 234 765 – 110 


0 
















Introduction 


Public takeovers bids for companies in Bosnia and Herzegovina (BiH) are relatively uncommon. 

The strategic companies in BiH remain mostly under state control. The privatization process is 

underway in both the Federation of Bosnia and Herzegovina (FBiH) and the Republika Srpska 

(RS), the two entities that together form BiH. The FBiH Privatization Agency and the RS Directorate 

for Privatization, which are responsible for the privatization process in the two entities, have 

begun the process of privatization of smaller companies. This process has been hampered by 

the fact that many of these companies remain burdened by debts and have large underemployed 

work forces, unclear title to assets and other problems. The larger companies awaiting privatization 

suffer from similar problems, only on a greater scale. The division of BiH into two entities 

has also created problems, as companies that operated throughout BiH (and yugoslavia) prior 

to the war are now sometimes divided into two parts, and it is sometimes unclear which part has 

rights of ownership to assets or obligations for debts that were assets or liabilities of the formerly 

united company. 

BiH is experiencing a significant increase in the number of takeovers of smaller companies. This 

increase in takeover activity is expected to continue as BiH takes steps towards accession to the 

European Union. 

The takeover legislation in BiH has been adopted not at the national level but at the level of FBiH 

and RS. This guide describes the takeover rules and procedures that apply in FBiH. Similar, but 

not identical, rules apply in RS and govern the takeover of companies on the Banja Luka Stock 

Exchange. 


The first specific takeover regulations in FBiH were enacted in 2000 in the form of a Rulebook on 

Takeover Conditions and Procedures and Implementation of Tender Offers for the Purchase of 

Securities. This Rulebook, together with the FBiH Law on Securities (the Securities Act), regulated 

all takeovers in FBiH prior to the enactment of the current Takeover Act. Certain provisions 

of the Securities Act continue to affect takeovers, including the provisions regarding publicity 

during takeovers and provisions on insider trading. 

Takeovers in FBiH are regulated by the Takeover Act (the Takeover Act) which became effective 

in March 2006. The Takeover Act is the first law to comprehensively regulate takeover transactions 

in FBIH and was adopted with the principle goal of enhancing minority shareholder protection 

in order to strengthen the FBiH capital market. 

• To whom does the Takeover Act apply? 

The Takeover Act applies to the acquisition of voting and/or non-voting shares, including securities 

convertible into shares, of companies registered with the Securities Commission of FBiH 

(the Commission), whether such acquisition takes place on or off the stock exchange. Under 

the FBiH Law on Business Companies, the shares of all joint stock companies must be included 

in the register of issuers of securities at the Commission (the Register of Issuers). Securities 

1


are issued in dematerialized form, as an electronic entry and all activities related to the registration, 

deposit, transfer and maintenance of data related to the securities are performed by the 

Register of Issuers. As a result of this requirement, all joint stock companies are subject to the 

Takeover Act, whether or not their shares are traded on the exchange. 

• When does the Takeover Act apply? 

The Takeover Act regulates mandatory bids for the shares of stock companies registered with 

the Commission. The Takeover Act requires a mandatory bid to be made for all of the shares in 

a company under three circumstances: 

• if the Board of Directors (or equivalent) of the bidder formally decides to launch a takeover 

bid for a target; 

• if a person (together with all persons with whom he is acting in concert) acquires 30% of the 

voting rights of the target; or 

• if a person who acquired less than two-thirds of the target’s voting shares pursuant to a 

takeover bid wishes to make any further acquisition of the target’s shares. 

• To what kinds of acquisitions does the Takeover Act 

not apply? 

The Takeover Act does not apply to: 

• an acquisition of shares that does not trip the 30% threshold; 

• the acquisition of shares in a private transaction that trips the 30% threshold, other than 

requiring the bidder to then launch a takeover bid for the rest of the shares in the target; 

• the acquisition of shares in an issuer that has 40 or fewer shareholders; 

• the acquisition of shares in a public offering; 

• certain types of “passive acquisitions” that trip the 30% threshold, including acquisitions of 

shares by inheritance, by a division of marital assets, as a creditor in bankruptcy proceedings 

or through a merger of two companies; 

• the acquisition of shares exceeding the 30% threshold directly from the target in a private 

placment to a pre-determined buyer; 

• the acquisition of shares as a financial investment (that is, not as a strategic investment) if the 

acquirer so informs the Commission and confirms that it intends to sell the shares exceeding 

the threshold within 30 days to a person which is not affiliated, nor acting in concert, 

with the acquirer; or 

• intra-group or related party transfers. 

The Takeover Act appears to exempt mergers from its application, though there is some uncertainty 

as to the effect of this provision which, if confirmed, would provide a significant exemption 

and enable takeovers without compliance with the Takeover Act. 


Acquisitions of shares at levels below the 30% threshold triggering a mandatory takeover, may


need to be reported. The acquisition by a single shareholder of more than 5% of the voting 

shares of a registered company requires submission of a written report to the Commission as 

well as public announcement in a daily newspaper, both within eight days of the acquisition. In 

addition, a shareholder whose ownership of voting shares in a registered company increases 

or decreases beyond the thresholds of 10%, 20%, 25%, 33.33%, 50%, and 66.67% must so 

notify the Commission within eight days. These reports may trigger buying activity in the target’s 

shares. 


It is possible for a bidder to acquire a majority stake in the target from a controlling shareholder 

(where one exists) in a negotiated transaction prior to launching the mandatory bid for the rest of 

the shares. A negotiated purchase of a majority stake would be expected to eliminate the risk of 

a competing bid, since any competing bidder would be precluded from acquiring majority ownership. 

A negotiated purchase would also allow the acquirer to structure the transaction as a normal 

private share acquisition, involving due diligence on the target. The acquisition agreement 

could include standard closing conditions, representations and warranties, indemnities, etc. 

If it is trying to organize the acquisition of a controlling stake from a number of large, but not 

controlling, shareholders, the bidder should take care to ensure that confidentiality is maintained 

and that rumors do not develop that influence the share price of the target. Although the FBiH 

Takeover Act does not contain any provisions authorizing the Commission to force a takeover 

bid due to unusual market activity, rumors could cause an increase in the share price, making a 

takeover more expensive. 


Despite regulations requiring public companies to make regular periodic and ad hoc disclosures, 

the publicly available information about many FBiH public companies is quite limited. In a 

negotiated transaction, it would therefore be expected that the majority shareholder of the target 

would provide extensive information about the target, either directly or by encouraging the target 

to do so. Provided that the target’s management is willing to make the disclosure (the majority 

shareholder cannot force the target to do so), the bidder can receive very extensive information 

about the target. 

A bidder must take care not to violate the insider trading provisions contained in the Securities 

Act. After receiving unpublished material including insider information from the target, the bidder 

is not allowed to purchase or dispose of any shares of the target on the basis of such insider 

information. 



Once a bidder becomes required to issue a takeover bid, it must, without delay and prior to 

launching the bid, inform the Commission, the management board of the target and the BiH


Competition Council (which administers FBiH law on competition) that it intends to launch a 

takeover bid. 

The management of the target must, within 72 hours following the notification by a bidder that 

it intends to make a takeover bid, inform the Commission on the receipt and content of the announcement. 


The takeover bid must include the following information: 

Ñ details about the bidder (name and seat); 

Ñ name of the broker conducting the takeover bid on behalf of the bidder; 

Ñ details on the target; 

Ñ information concerning the number, type and class of securities purchased by the bidder 

and those with whom it is acting in concert; 

Ñ information as to the number, type and classes of securities of the target; 

Ñ the offered purchase price per share; 

Ñ the minimum number of shares that need to be tendered in order for the takeover bid to be 

successful (that is, the minimum percentage that must be tendered in order for the bidder to 

have the obligation to purchase the tendered shares), which applies only in the case 

of a voluntary bid; the Takeover Act permits the offeror to include a minimum threshold of 

either 50% of the voting securities (which gives ordinary control over the issuer) or 

two-thirds of the voting securities (which gives full control over all actions of the issuer); 

Ñ any other conditions to the offer, to the extent permitted; 

Ñ the period during which the bid will remain open; 

Ñ the method of acceptance of the takeover bid; 

Ñ the means and period of payment; 

Ñ information about the sources and adequacy of funding to finance the proposed purchase; 

Ñ the purpose and goals of the takeover, including the program and intended methods of 

management of the target in the event the takeover is successful and, in particular, the bidder’s 

intentions with respect to employees, amendments to the target’s articles of association 

and the allocation of future profits; 

Ñ information concerning any negotiations held between the target and the bidder in the year 

prior to the announcement of the takeover bid, and any information disclosed to bidder by 

target during that period; and 

Ñ any other information required by the Commission. 

• Submission of the bid to the Agency 

The bidder is obligated to submit the bid to the Commission for approval within 30 days after the 

obligation to make the bid arises, together with all required accompanying documentation. This 

includes inter alia documentation of the transactions through which the bidder acquired shares of 

the target during the six-month period prior to submission of the request for approval of the takeover 

bid; the contract with the bank concerning the bank guarantee or other means of ensuring 

the availability of the cash needed to finance the purchase of the shares for which the tender is 

being made; proof of the appointment of a professional broker to carry out the takeover proceedings 

on behalf of the bidder; and evidence of any required prior approvals by governmental


authorities (for example, approval by the banking authorities to take over a bank). 

• Approval by the Agency 

The Commission is supposed to issue a formal decision approving or rejecting the offeror’s request 

to publish a takeover bid within 30 days after the receipt of a duly submitted request. However, 

if the Commission does not issue a formal decision on the request to publish a takeover bid 

within the 30-day deadline, the request is deemed to be rejected. 

• Publication 

The takeover bid must be published in at least one newspaper in the territory of FBiH no later 

than five days after the Commission grants its approval. 

• Information provided by the target 

The target is not required to provide any information to the bidder nor any information for inclusion 

into the bid. The supervisory board, or the management board upon authorization of the 

supervisory board, may express its opinion/recommendation on the takeover bid. This opinion/ 

recommendation is related to the bid as a whole and especially to the price that the bidder has offered 

per share. Any person (that is, a member of the supervisory board or management board) 

that is a direct participant in the takeover bid or any competing bid is prohibited from participating 

in or voting on any matter related to the opinion/recommendation. 

Other than publishing this opinion/recommendation, the members of the management and supervisory 

boards are forbidden from undertaking any activity that could influence the bid. 



The price offered for the shares may not be lower than the higher of 

• the highest price paid by the bidder or connected persons for shares of the target during 

the prior six months; or 

• the average closing prices of the target’s shares on the stock exchange or other regulated or 

unregulated market during the prior six months. The same price must be offered and 

paid to all shareholders. The purchase price must be paid in cash. 

• Broker 

The takeover bid and other related matters must be undertaken through a professional broker 

appointed by the bidder. The bidder may not carry out the takeover bid on its own. 

• Bank deposit, loan or guarantee 

The bidder is required to conclude a contract with a bank with respect to payment of the purchase 

price for the shares that are subject to the tender bid. This can be done either by obtaining a bank


guarantee or bank loan or by depositing cash into a blocked account. If the bank fails to block 

the account and the funds are withdrawn by the bidder, the bank is responsible for paying for all 

unpaid shares acquired through the takeover bid. If the bid price is increased (in response to a 

rival bid or otherwise) the bank guarantee, loan or cash deposit must be increased to meet the 

higher price. 

• Bid term 

The offer must remain open for at least 30 days and cannot be longer than 60 days, except if the 

bid is amended, in which case it can be extended by 15 days, or if there is a competing bid, in 

which case it may remain open until the end of the competing bid. 


Conditions to an offer are extremely limited: 

• there can be no financing condition, since the bidder must provide a bank guarantee or 

cash deposit covering the full purchase price for the shares that are subject to the bid; and 

• the bid is made subject to approval by FBiH or BiH governmental authorities, if applicable (that 

is, it cannot be successful if these approvals are not obtained), and if competition 

clearance is to be required the term of the bid should be long enough to take this approval 

into account (please note, however, that the fact that approval from the Competition 

Council has not been issued does not prevent the implementation of a public takeover bid. 

If the Competition Council does not approve the concentration, it can order that the 

shares acquired be transferred or prohibit or restrict the exercise of voting rights). If a 

required administrative approval is not obtained by the expiration of the bid term, 

the bidder must so inform the Commission and the bid must be made for all 

outstanding voting shares. A voluntary bid may, however, stipulate that the bidder will acquire 

no shares if, as a result of the bid, it does not acquire shares having at least 50% 

(conferring ordinary control) or two-thirds (conferring absolute control) of the target’s 

voting rights. 


A bidder can withdraw its bid only under two circumstances (both of which give a right of withdrawal 

only if specifically mentioned in the bid documents): 

• if there is a competing bid with a higher offered price; or 

• if, due to the occurrence of circumstances specifically described in the bid document, it would 

not appear “reasonable” for the bidder to be required to proceed with the bid because 

it would be unable to realize its expectations related to the purchase of the securities. 


The bidder can amend its bid by increasing (but not decreasing) the price for the offered shares. 

No other amendments are permitted. Any revisions to the offer apply to all shareholders who 

have already accepted the initial offer. Requests for amendment of a bid must be submitted 

to the Commission at least 15 days before the expiration of the bid’s validity. The Commission

must issue its decision on the proposed amendment within eight days. 





Once a takeover bid has been announced, and until it has been concluded, the bidder may not: 

Ñ acquire (or sell) target shares, other than through the takeover bid. This prohibition also applies 

to all persons acting in concert with the bidder; or 

Ñ vote any of its shares in target. 

The target’s supervisory or management board may not: 

Ñ increase the share capital; 

Ñ undertake activities that are not within the target’s usual scope of business and that could 

seriously affect the financial situation of the target; or 

Ñ acquire or sell treasury shares, without the approval of the shareholders’ assembly. 

The target’s shareholders’ assembly may not: 

Ñ increase or decrease the share capital; 

Ñ authorize a spin-off, termination or change of the company form; 

Ñ authorize amendments to the Articles of Association; or 

Ñ revoke the appointment of members of the Supervisory Board. 


The Takeover Act does not explicitly obligate the target to provide information to any bidder. 

However, under the FBiH Companies Act, members of target’s management are obligated to 

carry out their commitments and responsibilities in accordance with the interests of the shareholders. 

The management of the target must therefore not withhold information from a bidder 

whose offer could be more favorable than the original offer. 

If a valid rival offer is made, and provided that the offer is still open for acceptance, every shareholder 

that accepted the initial offer has the right to withdraw its acceptance and accept the rival 

offer.





intention to launch a 

bid to the Commission, 

the target’s management 

board, and the BiH 

Competition Council 

Maximum time period between 

Announcement and 

publication (launch) 

of the bid 

Prior to submitting the 

request for approval of 

the bid, the bidder must 

Offer launch 

Obligation to announce intention to launch a bid to the 

Commission, the target’s management board, and the BiH 

Competition Council once the bidder’s management 

board has formally agreed to actually proceed with the bid. 

35 days 

• open a special account with the Registry; 

• conclude a contract with a bank. Alternatively, it may obtain 

an irrevocable bank guarantee or a guarantee by another 

legal person accepted by the bank; 

• appoint a professional broker to implement the bid 

procedure on behalf of the bidder. 

• The Agency must have approved the bid (approval must be 

granted or denied) within 30 days of receiving the application. 

Under the Takeover Act, the time allowed for acceptance of 

a bid must not be less than 30 days nor more than 60 days 

from the date of the publication of the offer. 

The Takeover Act provides exclusively for the following extensions 


+ 15 days: if the bidder, during the offer term, improves the 

bid (that is, subject to the approval of the Commission, offers 

a higher price per share or waives a bid condition in relation 

to the minimum target threshold); such improvement cannot 

be made during the 15-day period preceding the expiry of 

the offer term; 

+ [term]: in the event of a competing bid, the offer term can 

be extended until the expiration of the offer term of the competing 

bid.




Providing notification 

of the relevant data to 

the Commission, the 

Competition Council 

and the Register 

Calculation of cash 

assets by the bank and 

information to the bidder 

Transfer of tendered 

shares to the bidder’s 

account by the Registry 


Within seven days after the expiry of the bid period the bank 

must report to the bidder and the Register within 3 days 

from the day of payment. 

The content of the announcement of the result of the bid 

has to be provided to the Agency and the Competition Office. 

In the event the bid is conditioned upon the approval or 

consent of a regulatory authority, the bidder must forward 

such a decision of the competent body to the Agency and 

the Competition Office. In the event the competent body 

does not issue its decision by the lapse of the bid period, 

the bidder must submit to the Agency a statement that such 

an approval has not been issued. 

According to the Law on Competition, the bidder must notify 

the Competition Council within eight days of the conclusion 

of an agreement requiring competition clearance, the announcement 

of the public bid or the acquisition of a controlling 

interest, whichever occurs first. 

Within three days 


Within seven days after entering into the agreement on 

transfer of shares 

The Commission supervises all public aspects of the takeover process, including whether to 

approve a takeover bid. The Commission is also authorized to: 

g suspendorcancelatakeoverbidifthebidderdoesnotactinaccordancewiththeCommission’s 

regulations, or if the bidder has acted with irregularity and disrupted the procedure; 

g require a bidder to conduct a tender bid if it was not carried out within the mandatory period; 

or 

g impose restrictions or prohibitions on the bidder’s acquiring securities through a takeover 

bid that is not carried out in accordance with the Takeover Act. 

The Commission does not have the authority that regulators in many other jurisdictions have to

0 


require a bidder to launch a bid (or, alternatively, to refrain from launching a bid for a specified 

period) if there is unusual activity in the market price of the target’s shares. 

At any time during the takeover, the Commission may request that the target, the target’s shareholders, 

or any bank, brokerage firm, or other legal entity or individual that is involved, make 

available to the Commission for its inspection all documentation that the Commission deems 

necessary to implement its supervisory activities. 

Share transactions carried out in violation of the Takeover Act will be deemed null and void. 

The failure to launch a mandatory takeover bid is a criminal act. The Commission may require 

the bidder to carry out a bid, as well as imposing criminal sanctions and fines. In addition, any 

shareholder of the target may, through the locally competent commercial court, request the mandatory 

purchase of its shares by the person who was required to publish the takeover bid upon 

the terms and conditions that would have governed the bid, had it been published. 


An acquisition of target shares will require a notice to and approval from the Competition Council 

of BiH if: 

• the total worldwide turnover of the bidder (and persons acting in concert) and the target is more 

than KM 100 million (approximately EUR 50 million) in the financial year preceding the 

acquisition; and 

• the total domestic FBiH turnover of each of the bidder (and persons acting in concert) and the 

target is at least KM5 million (approximately EUR 2.5 million) in the financial year 

preceding the acquisition; or 

• the bidder (and persons acting in concert) and the target jointly control more than 40% of the 

relevant market. 

The bidder must notify the Competition Council no later than eight days after the first to occur of: 

• entering into a contract to acquire control over the target (that is, more than 50%, while the 

Takeover Act provides only 30%), or 

• the announcement of a public takeover bid; or 

• the acquisition of a controlling interest in a company. In any event, the bidder has an obligation to 

inform the Competition Council if it has the intention to issue a public takeover bid. 

The Competition Council has 60 days in which to issue its decision. However, this does not relieve 

the bidder of launching a mandatory public takeover bid within the prescribed period. 

The takeover bid may be consummated without the prior approval of the Competition Council. 

However, if the Competition Council does not approve the concentration, it can order that 

the shares acquired be transferred or it can prohibit or restrict the exercise of the voting rights 

attached to the shares acquired.


The Competition Council may also disallow the takeover on competition grounds or permit the 

takeover subject to conditions (such as a disposal of the assets that cause the combined entities 

to breach the competition rules). 

Decisions by the Competition Council are final, but administrative proceedings can be instituted 

before the Court of BiH within 30 days from the receipt of the decision. 


FBiH law makes no provision for squeezing out minority shareholders. 

1

Takeovers in Bosnia and Herzegovina

Takeovers in Bulgaria 


Neli Nedkova 

Wolf Theiss, Sofia 

The information contained in this article on takeovers in Bulgaria was correct as of 1 June 2008. 


takeovers in Bulgaria, please contact: 

Richard Clegg 

Wolf Theiss Business Service E.O.O.D. 

Rainbow Centre 

29 Atanas Dukov Street 

1407 Sofia 

Bulgaria 

Tel.: +359 2 4215 - 600 

Fax.: +359 2 4215 - 625 

Email: richard.clegg@wolftheiss.com 

David Ayres 



186 00 Prague 8 


Tel.: +420 234 765 – 111 

Fax.: +420 234 765 – 110 




The Takeover Rules in the Commercial Code 55 

The Takeover Rules 55 



Insider information 57 

Offer document 58 

Notification of bids 58 

Information provided by target 59 

Non-prohibition/approval of the bid by the FSC 59 

Publication of the bid 59 









Introduction 


Takeover bids for Bulgarian public companies have become more common in recent years, but 

the Bulgarian stock market is still relatively underdeveloped. Under the government’s privatization 

policy in the late 1990s, shares of a number of state-owned companies were listed on the 

stock exchange in connection with their privatization. Most of these companies have subsequently 

been delisted following their successful privatization. 

Since 2000, 34 takeover bids have been launched in Bulgaria, more than half of which took place 

in 2007. All of the takeover transactions have involved friendly takeovers, with hostile takeovers 

as yet playing no part. 

The current Bulgarian legislation on takeovers provides for both voluntary and mandatory takeover 

bids, for buy-outs of the minority shareholders of listed companies (initiated by either minority 

or majority shareholders) and for squeeze-outs, initiated by majority shareholders. 

The Takeover Rules in the Commercial Code 

Takeovers in Bulgaria are regulated by Sections 148j to 157d of the Public Offering of Securities 

Act (the Takeover Rules) in force since 30 January 2000. The Takeover Rules were regularized 

for the first time in Bulgaria in 1995 with the adoption of the Securities Stock Exchanges and Investment 

Funds Act (the forerunner to the Public Offering of Securities Act). The Takeover Rules 

have been amended several times, in particular in connection with the harmonization of Bulgarian 

laws with European Union law in connection with Bulgaria’s accession to the EU. Following 

the most recent amendments, effective as of 3 July 2007, the Bulgarian Takeover Rules comply 

fully with the Takeover Directive 2004/25/EC (the Directive). 

The Takeover Rules 

• To whom do the Takeover Rules apply? 

The Takeover Rules apply to the acquisition of control in Bulgarian “public companies”. Under 

the Bulgarian Public Offering of Securities Act, a public company is a joint stock company that 

either 

• has issued shares through a primary public offering (offer for the subscription of 

shares addressed to more than 100 persons) 

• has registered an issue of shares with the register of the Financial Supervision Commission 

for the purpose of trading on a regulated market 

• had more than 10,000 shareholders on the last day of two sequential calendar years or 

• was the successor, including a newly formed company, in connection with a merger 

in which at least one public company participated. 

Any joint stock company that fulfils these conditions is a public company under the Bulgarian


Public Offering of Securities Act and is obliged to list its shares for trading on a regulated public 

market. 

• When is the obligation to launch a mandatory bid 

triggered? 

A person, who: 

Ñ acquires directly, through related parties or indirectly more than 50% of the voting rights 

in the general meeting of a public company, or 

Ñ acquires directly, through related parties or indirectly more than 2/3 of the voting rights in the 

general meeting of a public company, or 

Ñ already owns more than 50% of the voting rights in the general meeting of a public 

company and wishes to acquire additional shares having more than 3% of the voting 

rights of such company within one year 

is obliged to make a mandatory takeover bid to all shareholders of the target within 14 days after 

such threshold was reached. Alternatively the person may, within such 14-day period, sell shares 

so that its stake falls below the relevant threshold. 

The period for launching a takeover bid or selling the shares is extended to 30 days if the 50% or 

2/3 threshold has been exceeded as a result of either: 

Ñ inheritance 

Ñ mergers of companies 

Ñ transfer by the target of its own shares or 

Ñ decrease of the share capital of the target. 

• Who can launch a voluntary takeover bid? 

A voluntary takeover bid can be launched by: 

Ñ a person who owns 5% or more of the voting rights in the general meeting of a public company 

and wishes to acquire a total of at least 1/3 of the voting rights (“voluntary bid by a 

minority shareholder”) or 

Ñ a person who acquires directly, through related parties or indirectly more than 90% of 

the voting rights in the general meeting of a public company. Such person is entitled to make 

a takeover bid within 14 days after exceeding the 90% threshold. 

• To what kinds of acquisitions do the Takeover Rules 

not apply? 

The Takeover Rules for both voluntary and mandatory bids do not apply to an acquisition of 

shares that does not trip the above thresholds. A takeover bid to acquire less than a controlling 

stake, i.e. less than 50% of the shares of a Bulgarian public company, is possible only in the case 

of acquisition by means of a voluntary bid of at least 1/3 of the voting rights by a shareholder

owning 5% or more. 

The Takeover Rules for a mandatory takeover bid do not apply when: 


• the 50% or 2/3 threshold has been tripped by acquisition of voting rights as a result of a 

privatization procedure under the Privatization and Post-Privatization Control Act 

• a person owns more than 50% of the votes and exceeds the 2/3 threshold as result of an 

increase of the capital of the target or 

• a person has made a takeover bid following the acquisition of more than 50% and: 

- has acquired less than 2/3 of the voting rights within the takeover bid and 

- passes the threshold of 2/3 of the voting rights by acquiring additional shares within one year 

after the bid. 


Acquisitions of shares at levels below the thresholds triggering the obligation to launch a mandatory 

takeover bid may need to be reported. Under the Public Offering of Securities Act, when, as 

a result of an acquisition, disposal or another event a person’s voting rights in a public company 

reach, exceed or fall below 5% or a number divisible by 5% of the voting rights in the general 

meeting, that person must notify the Financial Supervision Commission (FSC) and the public 

company. The notification must be made in writing within 4 days from the moment when the person 

became aware, or should have become aware, of triggering these thresholds. 

The notification requirements also apply to persons who hold, directly or indirectly, options or 

other financial instruments that result in an entitlement to acquire voting shares in a public company. 


It is common for a bidder to acquire a majority stake in the target from a controlling shareholder 

in a negotiated transaction prior to launching a mandatory bid for the rest of the shares. 

A negotiated purchase of a majority stake usually eliminates the risk of a competing bid, since 

any competing bidder would be precluded from acquiring majority ownership. A negotiated 

purchase typically allows the acquirer to structure the transaction as a normal private 

share acquisition, involving due diligence on the target. The acquisition agreement will typically 

include standard closing conditions, representations and warranties, indemnities, etc. 

Insider information 

In a negotiated transaction, it is common for the majority shareholder of the target to provide the 

bidder with extensive information about the target, either directly or by encouraging the target 



about the target.


A bidder must take care not to violate the insider trading provisions contained in the Law Against 

Market Abuse with Financial Instruments. In the event that the FSC discovers a leak of insider 

information, it may stop the trading in shares and/or other financial instruments of the target for 

a certain period. 

Offer document 

The offer document must be drawn up and published in such a way that the addressees can 

make a fully informed decision on the offer in a timely manner. It must contain, inter alia, the 

following information: 

• the bidder’s name and other relevant information on the bidder and, if appropriate, the extent 

of its existing participation in the target company and its percentage of voting rights in such 

company 

• a specification of the shares subject to the offer, in particular their class, type and form 

• the number of voting shares that the bidder does not own and wishes to acquire 

• the price being offered for one share or, in the case of a share-for-share exchange offer, the 

class, type, form and nominal value of the shares being exchanged, the exchange ratio and the 

methods employed to determine the price or exchange ratio (a share-for-share exchange 

offer cannot be made in the case of a voluntary takeover bid launched by a bidder 

owning more than 90% of the target’s voting rights) 

• the period during which the tender offer is binding, which may not be less than 28 days nor longer 

than 70 days from the date of its publication in two daily newspapers 

• the investment intermediary who represents the bidder 

• the procedure for the transfer of securities and for receiving payment of the purchase price 

• the bidder’s plans concerning the target company’s future activity, its employees and members 

of its management and supervisory boards, including planned changes with regard to 

employment conditions and 

• information on and evidence for the financial resources and the method of financing the costs of 

the acquisition. 

Notification of bids 

The tender offer must be notified to the FSC within 14 days (or 30 days in the specific cases listed 

above) of the event triggering the obligation to make a mandatory public offer or entitling a 90% 

shareholder to launch a voluntary bid. There is no time limit for the notification of a voluntary 

takeover bid by a minority shareholder. 

A person who is entitled to launch a voluntary takeover bid following the acquisition of at least 

90% of the shares, but who does not notify his intention to make such bid within the 14 days 

after triggering this threshold, shall notify the FSC, the regulated market and the target at least 3 

months in advance if he decides to make a bid later. 

On the day of the notification to the FSC the bidder must also deliver the draft tender offer to

the management bodies of the target company. 

Information provided by target 


Within 7 business days after delivery of the draft tender offer, the management body of the target 

company must prepare its written opinion as to whether the bid is in the best interests of the 

target’s shareholders, employees and creditors, and the factual reasoning on which they base 

such opinion. This opinion must then be published in the same manner as the bid. 

Non-prohibition/approval of the bid by the FSC 

If within 14 business days after the notification the FSC has not issued a preliminary prohibition 

on launching the takeover bid, the bid is deemed approved and the bidder may publish and 

launch the bid. An explicit approval of the tender offer is required only for voluntary takeover bids 

by minority shareholders. 

Within 14 business days after submission of the notification the FSC may issue a preliminary 

prohibition on launching the takeover bid and grant the bidder 14 business days to make amendments 

and/or supplements to the tender offer and/or provide additional information as required 

under the law. For a voluntary bid by a minority shareholder, the time limit for a preliminary 

prohibition or issuing of an approval is 7 business days, and for amending the offer – 3 business 

days. 

If the FSC does not issue a final prohibition within 7 business days after receipt of the amended/ 

supplemented offer, the takeover bid is deemed approved and can be published and launched. 

Publication of the bid 

Within 3 days’ after expiration of the time limit for issuing a prohibition on the takeover bid by the 

FSC, the bidder must publish the tender offer in two national daily newspapers along with the 

written opinion of the target’s management body (if this was provided). 

Within the same period, the bidder must deliver a copy of the tender offer to its employees and 

to the employees of the target. 



The offer price must be the highest of either: 

- a fair price or exchange ratio, according to the bidder’s reasonable valuation, 

- the average market price of the shares in last three months (the “average price”), or 

- the price at which the bidder has acquired any shares in the target during the 6 months 

preceding the announcement of the takeover bid.

0 


The price offered for the same class of shares must be the same for each shareholder (this applies 

for voluntary bids as well). The adequacy of the price must be supported by a reasonable 

report (including, inter alia, the methods use for the valuation). 

For voluntary bids by minority shareholder, as well as for mandatory bids in the event of exceeding 

the 3% threshold by shareholders already holding more then 50% of the voting rights, the 

price must be the higher of the last two values listed above. The submission of an adequacy 

report is voluntary in the latter cases. 

If, before expiration of the term of the bid, the bidder acquires directly, through related parties 

or indirectly voting rights or shares that are the subject of the bid for a price higher than the one 

offered in the tender offer, he must pay this higher price to all shareholders who accept the bid, 

whether they accepted before or after the increase. 

• Bid term 

The offer must remain open for at least 28 days and cannot be open for longer than 70 days after 

publication of the tender offer. If a competing bid is published within the term of acceptance of 

the initial bid, the term of the initial bid is deemed extended until the end of the competing bid’s 

term. 


Conditions to voluntary bids by minority shareholders are generally not prohibited. The Takeover 

Rules expressly allow a condition of minimum acceptance – the bid may be conditioned 

on receipt of a minimum number of shares from tendering minority shareholders (at least 1/3 of 

the voting rights) or a maximum exact number of shares. Mandatory as well as voluntary bids 

by a shareholder owning more than 90% of the voting rights in the target may not be subject to 

conditions. 


A voluntary bid by a minority shareholder may be withdrawn at any time. Withdrawals of mandatory 

bids after their publication are allowed only if the offer cannot be fulfilled due to circumstances 

beyond the control of the offering party, the term of its acceptance has not expired 

and the withdrawal was approved by the FSC. Within 7 days from the notification of the issued 

approval, the offering party shall publish in two national daily newspapers notification about the 

withdrawal of the offer. 


The bidder can extend the term of acceptance to the maximum term of 70 days and/or increase 

the bid price (in the latter case, shares that have already been tendered must be acquired at 

the higher price). The amended offer must be registered with the FSC, notified to the target and 

the regulated market and published in two national daily newspapers immediately after the FSC 

registration. 

Other amendments must be registered with the FSC, notified as above, and published, if within 

3 business days after the registration the FSC has not issued a prohibition of the amendments. 

Any amendments in the tender offer shall be published not later than 10 days before the expiration 

of the initial acceptance term.



management following announcement of a 

takeover bid 

Once a takeover bid has been announced, and until it has been concluded: 

Ñ The bidder may not exercise his voting rights in the target after triggering the threshold 

requiring a mandatory bid and until the publication of the results and the transfer of 

the shares following the end of the bid. 

Ñ The target may not, inter alia 

• take any action that could impede or complicate the bid, except to seek a rival offer, 

• authorize the issuance of shares or other securities that could prevent the bidder from 

gaining control of the target company, or conclude transactions that could lead to 

material changes in the property of the company, except when this is approved by a general 

meeting convened while the bid is binding, or 

• adopt any measures that could cause its shareholders not to be able to decide on the bid 

in their own discretion and with adequate knowledge of the matter. 

The approval of the general meeting is required for any decision of the management body taken 

prior to the submission of the tender offer that would qualify as a prohibited act above and which 

(i) has not yet been fully implemented and (ii) is not within the usual business activities of the 

company and may jeopardize the acceptance of the bid. 


A competing bid may be launched by a rival bidder not later than 3 days before expiration of 

the binding period of the original bid. The provisions and requirements for the original bid apply 

to the competing bid as well. The competing bid can only be in the form of a voluntary bid by a 

minority shareholder. The competing bid must offer one or more of the following more favorable 

conditions: 

Ñ a higher price, and /or 

Ñ in the event that the initial bid was a voluntary bid by a minority shareholder conditioned on 

the tender of a minimum or maximum number of shares: 

• the competing bid must offer to acquire a higher number of voting shares or 

• a lower minimum number of shares in order for the bid to be successful. 

The term for acceptance of the initial bid is deemed extended until the end of the term of the rival 

bid. The original bidder can improve the offered conditions (in one or more of the ways described 

above) within 7 days following the publication of the competing bid. The competing bidder has 

once again the right to improve his offer within 7 days after publication of the amended offer of 

the original bidder. 

1


A shareholder may withdraw his acceptance of the original or the competing bid within the respective 

term for acceptance. 




the intention to launch a 

bid or triggering of the 

obligation to launch a 

mandatory bid to the target, 

the public, the FSC, 

and the CPC 

Maximum time period 

between notification of 

the intention to publish 

the bid and publication of 

the bid 


must 

Obligation to announce the intention to launch a bid or triggering 

of the obligation to launch a mandatory bid to the 

target, the public, the FSC, and the Competition Protection 

Commission (CPC). Notification of the intention or occurrence 

of an obligation to launch a bid shall be made to the 

FSC within 14 days after triggering the threshold (except for 

voluntary bids by minority shareholders). 

Notification of the management bodies of the target is made 

simultaneously with the notification of the FSC. 

If the acquisition of control of the target company is subject 

to the approval of the CPC, this should generally be obtained 

before the effective transfer of shares. According to 

the CPC Guidelines, the notification must be filed within 7 

days after publication of the tender offer. 

14 business days (if the FSC does not issue a preliminary 

prohibition on the bid) + 14 business days (if the FSC issues 

a preliminary prohibition) + 3 days = 3 days + 28 business 

days (for voluntary bids by minority shareholders the term is 

3 days + maximum 10 business days). 

• draft a tender offer 

• for a mandatory bid, support the adequacy of the offered 

price by a reasonable valuation 

• appoint a representative (investment intermediary) 

registered in Bulgaria 

• notify the FSC of the decision on its intention or triggering 

of an obligation to launch a bid 

• deliver to the target’s management bodies the draft 

terms of the offer


Offer Launch 





FSC 

The deadline for the 

bidder’s payment of the 

purchase price to all 

shareholders that tendered 

their shares 

Transfers of payment from 

the bidder to shareholders, 

transfer of tendered 


account 


• publish the offer in two national daily newspapers 

• deliver the published offer to the bidder’s and the target’s 

employees and 

• depending on the target’s activity, obtain additional required 

approvals (e.g., if the target is a bank, the prior approval 

by the Bulgarian National Bank is required). 

The time allowed for acceptance of a bid must be between 

28 and 70 days. 

The Takeover Rules provide for extension of the offer term 

only in the following circumstances: (i) extension based on 

the decision of the bidder, published not later than 10 days 

before the expiration of the initial term; or (ii) in the event that 

a competing bid was launched - automatic extension until the 

end of the term for acceptance under the competing bid. 

Without undue delay after expiry of the bid term, in the same 

manner as the bid. 

Simultaneously with the publication the bidder must inform 

the FSC on the results of the bid. 

Maximum of 7 days from conclusion of the transfer 

agreements resulting from the accepted bid. 

The tendering shareholders must accept the bid in writing 

and deposit their share certificates with the investment intermediary 

or the Central Depository. The settlement of takeover 

bids is carried out through the Central Depository. The 

transfer of ownership of the shares is deemed effective at the 

moment of expiration of the term for acceptance.



The FSC is the competent authority supervising the takeover bid process and compliance with 

the Takeover Rules. The FSC may prohibit a takeover offer under certain conditions provided by 

law, stop the trading of target shares as provided by statute and/or impose fines in the case of 

violation of the Takeover Rules by the bidder or the target’s management. 


• When is competition approval required? 

An acquisition of control over the target will require a notice to and approval from the Bulgarian 

Competition Protection Commission (CPC) if the combined aggregate domestic (Bulgarian) turnover 

of all of the participating undertakings for the preceding year exceeds BGN 15 million 

(approximately EUR 7.67 million). 

Within 30 days after filing the application for approval of the takeover, the CPC must issue a 

statement: (i) prohibiting the concentration; or (ii) declaring that the concentration falls outside 

the scope of the Competition Protection Act; or (iii) authorizing the concentration; or (iv) starting 

a second stage proceeding. The CPC has an additional 3 months to make its decision in the case 

of a second stage proceeding. 

The Competition Protection Act prohibits the implementation of a concentration (i.e., transfer of 

ownership of the shares) prior to clearance of the transaction by the CPC. 

• What if the thresholds for approval are not met? 

If the thresholds for notifying the intended concentration are not met, no clearance of the transaction 

by the CPC is required and no notification needs to be submitted. 


• Squeeze-outs initiated by the majority shareholder 

A bidder who, as a result of a takeover bid, acquires directly, through related parties or indirectly 

at least 95% of the voting rights in the general meeting of a public company is entitled within 

three months from the expiration of the bid to buy all of the voting shares held by the remaining 

shareholders (at a price equal to the bid price). The buyout offer shall be approved by the FSC. 

The minority shareholders have to transfer the shares within one month after publication of the 

FSC’s approval. 

• Buy-outs initiated by the minority shareholders 

The minority shareholders of a public company may also require the purchase of their shares by 

the majority holder who acquired directly, through related parties or indirectly at least 95% of the 

voting rights as a result of a public bid. The request to the majority shareholder shall be made


within 3 months after the bid is completed. The majority shareholder must buy the offered shares 

within one month after the request. 

A shareholder who owns at least 90% of the voting rights in a public company and has notified 

his intention to make a takeover bid shall be obliged upon request to buy out the voting shares of 

any other shareholder until 14 days after the final term for acceptance of the approved bid.

Takeovers in Bulgaria

Takeovers in Croatia 

Tarja Krehić-Ðuranović 

Croatian Attorney-At-Law, Zagreb 

and 

David Ayres 

Wolf Theiss, Prague 


The information contained in this article on takeovers in Croatia was correct as of 1 June 2008. 


takeovers in Croatia, please contact: 

David Ayres 



186 00 Prague 8 


Tel.: +420 234 765 – 111 

Fax.: +420 234 765 – 110 








Mandatory takeover bids 72 





Breakthrough rule (applicable from the date of Croatia’s accession to the EU) 78 

Transfer and sale of shares of minority shareholders – squeeze-out 

(applicable from the date of Croatia’s accession to the EU) 78 





Introduction 


Public takeover bids for Croatian companies are relatively common. The program initiated by the 

Croatian government to privatize state-owned companies resulted in widespread public share 

ownership, with most large privatized companies being listed on the stock exchange. The Croatian 

legislation on takeovers provides for a mandatory takeover offer once a person has acquired 

a 25% stake in a public company. This mandatory bid procedure has resulted in there being a 

large number of takeover bids relative to the size of the Croatian market. 

Since 2000, Croatia has seen a significant increase in the number of takeovers, prompted largely 

by Croatia’s entering into negotiations to join the European Union (the EU) and the strengthening 

of the Croatian financial market. The Croatian Financial Services Supervisory Agency (the 

Agency) approved 90 bids in 2002, 31 in 2003, 30 in 2004, 42 in 2005 and 31 in 2006. The 

figures for 2007 are not yet publicly available. 

Most of the deals have involved friendly takeovers, with hostile takeovers virtually non-existent. 

The only noteworthy attempt to date at a hostile takeover was the unsuccessful bid in 2006 for 

PLIVA d.d. 


The Croatian Law on Takeovers of Joint Stock Companies (the Takeover Act) became effective 

on 1 November 2007 (with the exception of some provisions to become effective after Croatia’s 

accession to the EU). It replaced earlier laws regulating takeovers, enacted in 1997 and 2002. 

The Takeover Act was adopted as part of Croatia’s gradual move to bring its laws into compliance 

with laws applicable to EU member states, in anticipation of Croatia’s possible accession to the 

EU. The Takeover Act, which implemented Directive 2004/25/EC on takeover bids, regulates 

takeovers in a way that is similar to that of many EU member states. 

The Takeover Act that became effective on 1 November 2007 was enacted in order to fully harmonize 

the Croatian Takeover Act with the European standards set out in Directive 2004/25/EC. 

The Takeover Act amends certain sections of the earlier takeover laws in an effort to improve 

shareholder protection in the takeover process and to provide clear and unambiguous rights and 

obligations for the acquirers. 


The Takeover Act applies to the following Croatian “public joint stock companies”: 

• joint stock companies that have issued shares through a public offering; and 

• joint stock companies that have more than 100 shareholders and a registered share 

capital of at least HRK 30,000,000 (approximately EUR 4,000,000). 

Any Croatian joint stock company that fulfils these conditions is obligated to list its shares for 

quotation on a Croatian stock exchange or on a regulated public market.

0 


After Croatia’s accession to the EU, the Takeover Act will also apply to any joint stock company 

that has its registered seat in any EU member state and whose voting shares are listed for quotation 

on a stock exchange within the EU. 


The Takeover Act regulates mandatory bids for the shares of a public joint stock company. 

The Takeover Act requires a mandatory bid to be made for all of the shares in the following 

situations: 

Ñ Once a person (together with all persons with whom he is acting in concert) obtains a 

“controlling threshold” in a target company, that is, directly or indirectly controls over 25% 

of the voting rights of the target (controlling threshold); 

Ñ Once a person (together with all persons with whom he is acting in concert), who has 

already obtained a controlling threshold, acquires more than an additional 10% of the 

voting shares of the target company (additional threshold); 

Ñ Once a person (together with all persons with whom he is acting in concert), 

who has already obtained a controlling threshold, acquires additional voting shares in the 

target company and after such acquisition holds more than 75% of the voting shares of 

the target company (final threshold). 

A person who already holds more than 75% of the voting shares in the target company and 

wishes to acquire additional shares has no duty to make a mandatory bid. 


not apply? 

The Takeover Act does not apply to: 

Ñ an acquisition of shares that does not trip the 25% threshold; 

Ñ an acquisition of additional shares in the company when the acquirer already holds 75%; 

Ñ certain types of “passive acquisitions” that trip the 25% threshold, including acquisitions of 

shares by inheritance, by a division of marital assets, as a creditor in bankruptcy 

proceedings or through a merger of two companies, where only one of the merging 

companies held target shares before the merger; 

Ñ the acquisition of shares exceeding the 25% threshold directly from the target in 

a private placement or as a dividend payment, if the target’s shareholders approved the 

acquisition of shares exceeding the 25% threshold and waived the obligation to implement the 

takeover; the waiver from the takeover obligation must be approved by at least 3/4 of the 

votes present at the target’s general assembly, excluding the votes of the acquiring 

shareholder; 

Ñ intra-group or related party transfers; 

Ñ acquisition of shares from the target company as a debtor, in bankruptcy proceedings 

or in reorganization proceedings; 

Ñ sale or transfer of shares of a credit institution acting as a fiduciary creditor, provided that the 

sale or transfer of shares occurs within six months after they were acquired; 

Ñ simultaneous acquisition of shares together with another person who has already launched 

a takeover bid, but in a percentage equal to or smaller than such other person;

Ñ other situations specifically designated by the law. 


It is unclear if it is possible under Croatian law to launch a public bid to acquire less than 25% of 

the shares of a Croatian public company. The Takeover Act does not address the question and 

there appears to be no practice in the area. In theory, a public bid to acquire less than a 25% 

shareholding in a target should not be subject to the Takeover Act. 


Acquisitions of shares at levels below the 25% threshold triggering a mandatory takeover may 

need to be reported. Under the Securities Market Act, an individual or a legal entity that directly 

or indirectly acquires shares of a public joint stock company, which acquisition results in the 

shareholder’s having voting rights exceeding a threshold of 10%, 20%, 25%, 50% or 75%, must 

inform the Agency and the issuer in writing within 4 days of the acquisition. A similar notification 

obligation applies to a shareholder whose shareholding drops below any of such thresholds as 

a result of a disposal of shares. The share ownership report may trigger buying activity in the 

target’s shares. 




the shares. A negotiated purchase of a majority stake usually eliminates the risk of a competing 

bid, since any competing bidder would be precluded from acquiring majority ownership. A negotiated 




If it is trying to organize the acquisition of a controlling stake from a number of large, but not 

controlling, shareholders, the bidder must take care to ensure that confidentiality is maintained 

and that rumors do not develop that influence the share price of the target. If confidentiality is not 

maintained and there is unusual share activity, the bidder may be forced to inform the Agency of 

its intentions and initiate a mandatory takeover bid procedure. 

Care must be taken not to inadvertently trip the obligation to launch a takeover bid by entering 

into a binding and final share purchase agreement. Under the Takeover Act, even if an agreement 

for the purchase of over 25% of an issuer’s shares is subject to standard conditions precedent 

(that is, the share purchase agreement has been executed but its legal effectiveness is 

postponed until fulfillment of certain conditions), it is deemed to constitute a legal transaction that 

triggers the obligation to publish a takeover bid. In practice, it is possible to avoid a premature 

triggering of the Takeover Act by signing a so-called “pre-contract on the purchase of shares” 

which, although in form and substance similar to a share purchase agreement with conditions 

precedent, does not represent the legal basis for acquisition of shares due to its “pre-contractual” 

legal nature and thus does not trigger the application of the Takeover Act. Once all the conditions 

precedent have been met, the parties enter into a binding share purchase agreement, which triggers 

application of the Takeover Act. The deadlines for publishing the takeover bid commence 

1


only after conclusion of the actual share transfer agreement, rather than upon the conclusion of 

the “pre-contract”. 



the publicly available information about many Croatian public companies is quite limited. 

In a negotiated transaction, therefore, it is common for the majority shareholder of the target 

to provide extensive information about the target, either directly or by encouraging the target 




A bidder must take care not to violate the insider trading provisions contained in the Croatian 

Securities Market Act. After receiving unpublished material inside information from the target, 

the bidder is not allowed to purchase or dispose of any shares of the target on the basis of such 

insider information. 

Mandatory takeover bids 


Once a person acquires a controlling threshold or any other threshold prescribed by the Takeover 

Act or announces its intention to publish a takeover bid, it must, without delay, inform the 

Agency, the target, the stock exchange and regulated public markets that it intends to launch a 

takeover bid and provide a sworn statement about its intention to launch a takeover bid. 

The Agency may request that any legal or natural person issue a sworn statement as to its intentions 

with respect to launch of a takeover bid if changes in the capital markets indicate the 

possible occurrence of a takeover. The Agency may request such a sworn statement if: 

g the circumstances of the case indicate the existence of a takeover agreement, or 

g the scope of trading and the prices of shares of the target company on the stock exchange 

or the regulated public market have significantly changed, or 

g a legal or natural person expresses an intention to launch a takeover in another way, for 

example by communicating such intention to the public. 

The notification contains very limited information about the bidder, the target and the bidder’s 

shareholdings in the target. The notification must be published in the Croatian language 

in the Croatian Official Gazette and in a Croatian national daily newspaper. A target company 

must inform its employees about the notification. 

In the case of existing competing bids, any acquisition of target’s voting shares by a competing 

bidder is void from the moment the first bidder’s notification of its intention to launch a takeover 

bid is published.



The Takeover Act is very specific about the content of the offer document. In the offer document, 

the bidder has a duty to provide the following information: 

• the target’s registered name, registered and business address, amount of the registered 

share capital, the number and type of shares; 

• the acquirer’s registered name, type of legal entity, registered and business address or, in 

case of a natural person, the first and the last name of the acquirer and his/her address; 

• registered name, type of legal entity, registered and business address of the persons acting 

in concert with the acquirer; 

• information on the type and number of voting shares in the target held by the acquirer and 

persons acting in concert; 

• information on the number and type of shares that are subject to the takeover bid; 

• percentage of shares set as the minimum threshold to be acquired by an acquirer, if the 

takeover bid is conditioned on the tender of a minimum threshold of shares; 

• sworn statement indicating that the bid is extended to all shareholders of the target for the 

acquisition of all shares that are the subject of the takeover bid, under the prescribed 

and published takeover terms and conditions; 

• the price per share that the acquirer undertakes to pay in the takeover and the manner 

in which the price has been determined; 

• the source of payment for the shares to be acquired and the security for the payment; 

• the term for the payment of the price; 

• the period of the offer’s validity; 

• the registered name, the registered and business address of the depositary; 

• instructions for the deposit of shares, its effect, and other rights and obligations of the 

shareholders depositing their shares, including the right to withdraw the deposited shares 

and to cancel the accepted offer; 

• acquirer’s future business plans with respect to the target company, including its plans for the 

target in relation to the future business plans of the aquirer itself, strategic plans for the target 

company and its management, possible consequences for the target’s employees, 

possible changes with respect to the location of the target company’s and the acquirer’s 

business operations, and information about monetary and/or non-monetary benefits for the 

target’s management board and supervisory board members. 

The following provisions will become applicable as of Croatia’s accession to the EU: 

g If shares are offered as remuneration, their price and terms of their exchange; 

g the amount of indemnity for restrictions or cancellation of shareholders’ rights (if any) and 

details of the manner of payment and method used for determining the amount of 

indemnification; and 

g the applicable law and the competent court in case of a dispute arising out of the takeover. 

The offer must be accompanied by the following documents, either originals or certified copies: 

(i) legal documents based on which the bidder acquired any shares in the target within one 

year preceding the obligation to publish a bid; (ii) bidder’s sworn statement (and/or the person


acting in concert’s sworn statement) stating that there have not been concluded any other legal 

documents, except those under (i), on the basis of which the target’s shares would be acquired; 

(iii) depositary confirmation of the deposited remuneration for the shares that are the subject of 

the takeover; (iv) confirmation of the stock exchange or regulated public market about the average 

price of the shares; (v) agreement concluded with the depository; (vi) previous approval 

from the Croatian National Bank if the target company is a bank or other financial institution, if 

its prior approval is required; (vii) acquirer’s excerpt from the court register or other competent 

register certifying its legal form, registered seat, business address, and authorized representatives, 

which is not older than 30 days, and a certified translation into the Croatian language if the 

acquirer is a foreign company; (viii) proxy for receiving correspondence in Croatia, if the acquirer 

is a foreign company; (ix) other documents requested by the Agency; and (x) evidence of the fee 

paid to the Agency. 

• Approval by Agency 

The bidder is obligated to submit the takeover bid to the Agency for approval within 30 days after 

the obligation to make the bid arises, together with all required accompanying documentation. 

The Agency must, within 14 days after submission, either: 

g approve the bid; 

g initiate a special examination proceeding and grant the bidder an additional 

period to complete, edit or rearrange the bid; or 

g reject the bid. 

• Publication of bid 

The bid must be published in the Croatian Official Gazette and in one daily newspaper within 

seven days after receipt of the Agency’s decision approving the bid. The bid and any amendment 

to the bid must be submitted to the target, depositary and stock exchange or regulated public 

market on which the shares are traded. The target company must also notify every shareholder 

of the content of the bid, including any amendments thereof. 

• Duration / validity of the offer term 

The time allowed for the acceptance of the bid must not be less than 28 days. However, in case 

of a competing offer, the offer can be prolonged for as long as the competing offer is valid. 

If the bidder, during the offer term, amends the bid, the offer’s term can be prolonged for an additional 

7 days, provided that the total offer term cannot be longer than 60 days. 

• opinion on the offer issued by the target’s management 

board 

Within 10 days after publication of the bid, the management board of the target must issue an 

advisory opinion setting forth the following:


Ñ the management board’s view of the type and amount of the offered price for the shares; 

Ñ the management board’s view of the bidder’s future intentions and goals in relation to the 

target; 

Ñ the management board’s view of the bidder’s strategic plans in relation to the target company 

and potential consequences arising out of these plans with respect to target’s 

employment policy, the employees’ status, and the potential change of the location at 

which the target performs its business activities; 

Ñ statements of the management board members on their intention to accept or refuse the 

offer; 

Ñ statements of the management board members on whether there is an agreement 

between them and the bidder, and if there is, its terms and conditions. 

Within 5 days after the publication of the offer and before the opinion is published, the management 

board of the target is obliged to submit its opinion to the target’s employees’ representatives 

or to the employees directly, who can give their opinion on the offer within the next 3 days. 

If the management board of the target receives the employees’ opinion on time, it is obliged to 

attach it to its opinion on the offer. If the opinion on the offer or the employees’ opinion on the 

offer contains false or misleading information, and if the persons who have prepared the opinion 

or participated in its issuance knew or should have known that the information was false and/or 

misleading, they shall be jointly and severally liable to the shareholders for the damage caused. 

The management board is obliged to submit its opinion on the offer to the Agency, the stock 

exchange or the regulated public market no later than the day on which the publication of the 

opinion is ordered. 

Other than publishing this opinion, the members of the management and supervisory boards are 

forbidden from undertaking any activity that could influence the bid. 



The price offered for the shares may not be lower than the higher of: 

• the highest price paid by the bidder for shares of the target during the prior year; or 

• the average weighted closing prices of target’s shares during the last three months. 

The same price must be offered and paid to all shareholders. The purchase price must be paid 

in cash. 

If the bidder, or a person acting in concert, within one year after the expiration of the offer’s term 

acquires shares of the target company that were the subject of the takeover for a price that is 

higher than the price set forth in the offer, such bidder would be obliged to pay the difference to 

all shareholders who have accepted the bid within 7 days from the acquisition of such additional 

shares. This provision does not apply to the acquisition of shares through statutory changes (for 

example mergers and amalgamations), through an increase of the share capital of the target 

company or an acquisition of target company’s shares in lieu of the payment of a dividend.


As of Croatia’s accession to the EU, the purchase price for shares in a takeover bid can be paid 

either in (i) cash, or (ii) shares or (iii) a combination of both. When offering shares or a combination 

of cash and shares, the bidder must also offer cash as an alternative. Shares offered as 

payment must be (a) listed on either the same market or another market having at least the same 

level of transparency, (b) of the same type, and (c) without any encumbrances. 

• Bid term 

The offer must remain open for at least 28 days and cannot be longer than 60 days, except if 

there is a competing bid, in which case it may remain open until the end of the competing bid. 


Conditions to an offer are extremely limited: 

g there can be no financing condition, since the bidder must provide (i) a bank guarantee, 

or (ii) cash deposit covering the full purchase price for the shares that are subject to the bid 

or (iii) deposit shares with the depository exchange (as of Croatia’s accession to EU); 

g the bid cannot be subject to approval by the Croatian competition or other 

governmental authorities. All competition or other approvals must be obtained in advance 

and submitted with the bid documentation submitted to the Agency for approval. 

The Agency will not approve the publication of a bid before these prior approvals 

are obtained; 

g the bid must be made for all outstanding voting shares. The bid may, however, 

exclude encumbered shares or stipulate that the bidder will acquire no shares if, as a 

result of the bid, it does not acquire shares having a certain percentage of the 

target’s voting rights (although the bidder may not specify a percentage lower than 

the controlling threshold). 


A bidder can withdraw its bid only if there is a competing bid with a higher offered price or in 

the event of the target’s bankruptcy. Withdrawal of the bid has to be announced at least seven 

days prior to the expiry of the bid term and the bidder must inform the target, the depositary, the 

Agency, and the stock exchange or regulated public market about its withdrawal. 


The bidder can amend its bid by (i) increasing (but not decreasing) the price for the offered 

shares by at least 2% or (ii) offering a higher number of exchange shares (applicable as of 

Croatia’s accession to the EU). Any revisions to the offer apply to all shareholders who have already 

accepted the initial offer. Requests for amendment of a bid must be submitted to the Agency at 

least 10 days before the expiration of the bid’s validity. The Agency issues its decision on the 

proposed amendment within three days. In case the Agency approves the proposed amendment 

of the bid, the validity period of the bid is prolonged for an additional seven days.





As of the moment the obligation to publish the takeover bid has arisen, and once a takeover bid 

has been announced, and until it has been concluded: 

• the bidder may not acquire or sell target shares, other than through the takeover 

bid. This prohibition also applies to all persons acting in concert with the bidder; 

• the target management or supervisory board may not, without prior approval of the 

general assembly, inter alia: 

- increase the share capital; 

- enter into extraordinary business operations; 

- act or enter into operations that could significantly jeopardize future business of the target; 

- decide on the target’s acquisition or sale of treasury shares; or 

- take any actions that would frustrate the bid. 

The decision of the target’s general assembly approving the above-listed decisions of the management 

board and/or the supervisory board will be effective only if passed by a ¾ majority 

of the share capital represented at the general assembly. However, the decision of the target 

company’s management board or supervisory board to search for another bidder (that is, a 

“white knight”) would not be prohibited and would not require shareholder approval. 


A competing bid can only be published during the offer term of the initial bid and it can refer only 

to the shares that are the subject matter of the initial offer. A competing bid must be published 

at least 10 days before the expiration of the initial offer and in no case may the competing bid be 

published later than 28 days before the expiry of the final validity period, that is, 60 days after the 

initial bid was published. 

A competing bid must offer a bid price that is at least 2% higher than the initial bid. It can be 

conditioned upon acquiring a certain percentage of voting shares only if the initial bid was also 

conditioned upon acquiring a percentage of shares – and in such case the competing bid may 

not be conditioned on acquiring a higher percentage of shares than the initial bid. 

In case of a competing offer, the initial offer can be prolonged for as long as the competing offer 

is valid. The Agency has the authority to refuse the request for approving a competing bid if it 

determines that it is of a speculative nature. 


However, it is a principle of Croatian corporate law that the management of the target must consider 

the interests of all shareholders and the target itself, including its employees and creditors.


The management of the target would therefore not be permitted to withhold information from a 

bidder whose offer could be more favorable than the original offer. 

If a valid competing bid is made, and provided that the offer is still open for acceptance, every 

shareholder that accepted the initial offer has the right to withdraw its acceptance and accept 

the competing bid. 

Breakthrough rule (applicable from the date 

of Croatia’s accession to the EU) 

The “breakthrough rule” is a deal protection measure which allows a target company to help the 

bidder in the takeover process. The rule is applicable only if included in the target company’s 

articles of association after the takeover bid is published. 

It provides that during the bid term, that is, after the bid has been published, restrictions on 

the transfer of the target’s shares and restrictions of voting rights, set out either in the target 

company’s articles of association, in an agreement between the target and its shareholder(s) or 

in an agreement between shareholders of the target, have no effect. 

The rule also helps persons who acquired more than 75% of the voting shares in the target 

company to convoke a general assembly in order to change the target company’s articles of 

association and/or to appoint or revoke the members of target’s supervisory board. In such case, 

restrictions on the transfer of target’s shares and restrictions on voting rights, set out either in the 

articles of association, or in the agreement between the target and its shareholder(s) or in the 

agreement between shareholders of the target, have no effect. Special rights of shareholders to 

directly appoint or revoke members of the supervisory board set out in the articles of association, 

also have no effect. 

Transfer and sale of shares of minority 

shareholders – squeeze-out 

(applicable from the date of Croatia’s accession to the EU) 

This rule enables a controlling shareholder who, after completion of a takeover bid, holds at least 

95% of the target’s shares to acquire the remaining minority shareholders’ shares within three 

months after the expiration of the offer term. The fair value must be paid to the minority shareholders 

for their shares. Fair value is defined as the price offered in the takeover bid. 

In addition to the 95% shareholder’s right to implement a takeover squeeze out, minority shareholders 

in the target company in which a controlling shareholder holds at least 95% of the shares, 

have the right to sell to the controlling shareholder their 5% shares for the fair value, within three 

months after the expiration of the offer term. If the controlling shareholder opposes implementing 

the squeeze out, the minority shareholders can request from the competent commercial court 

the implementation of the takeover squeeze out.



• Obligation to submit 

the request to the Agency 

for the approval of the 

bid, together with the 

bid and all necessary 

documentation 

• Obligation to announce 

the intention to 

publish a takeover bid 

• Obligation to publish 

the bid 

Maximum time period 

between announcement 

of the acquisition of 

shares or the intention 

to publish the bid and 

publication of the bid 


must 


• within 30 days after the thresholds are met (acquisition 

of 25% of the voting shares or other legally prescribed 

threshold) 

• Within 30 days following its intention to publish a 

takeover bid 

• within seven days after it is approved by the Agency 

If the request is not submitted within 30 days, the bidder (legal 

person) is subject to a penalty of HRK 200,000 to HRK 

1,000,000. 

If the bid is not published within seven days after its approval 

it is still valid but the bidder (legal person) is subject to a penalty 

of HRK 200,000 to HRK 1,000,000. 

30 days + 14 days + 7 days = 51 days. 

• enter into a service agreement (this is a standard 

form agreement) with the Croatian Central Depository 

Agency (the CDA) to act as intermediary for the transfer 

of the shares and the deposit of shares; 

• deposit the purchase price (for all shares subject to the 

bid) to be proposed under the bid terms with the CDA 

after Croatia’s accession to the EU) or obtain a bank 

guarantee for the same amount; 

• if the bidder is foreign, appoint a Croatian attorney, public 

notary, brokerage company or bank to act as a proxy 

on its behalf for the purposes of receiving correspondence 

from the Agency; 

• receive the Agency’s approval of the bid (or deemed 

approval due to lapse of the applicable period (if an 

examination procedure has not been initiated within

0 



Emergency Launch 

Offer Launch 

14 days after receiving the application)); and 

• as part of the submission of the bid to the Agency, submit 

prior approvals from the Competition Agency or other 

competent authorities. 

• Once a person (together with all persons with whom he is 

acting in concert) obtains a “controlling threshold” in a target 

company, that is, directly or indirectly controls / acquires 

“more than 25%” of the voting rights of the target (controlling 

threshold); 

• Once a person (together with all persons with whom 

he is acting in concert) acquires more than an additional 

10% of the voting shares of the target company 

(additional threshold); 

• Once a person (together with all persons with whom he is 

acting in concert) acquires additional voting shares in 

the target company, and after such acquisition holds more 

than 75% of voting shares of the target company (final 

threshold). 


than 28 days. However, in case of a competing offer, the 

offer can be prolonged for as long as the competing offers 

are valid. 



+ 7 days: if the bidder, during the offer term, improves the 

bid (that is, subject to the approval of the Agency, offers a 

higher price per share of at least 2% or an exchange ratio 

with a value per target share with a higher value of at least 

2% or waives a bid condition in relation to the minimum target 

threshold), provided that the total offer term cannot be longer 

than 60 days; 

+ indefinite term: in the event of a competing bid, the offer 

term can be prolonged until the expiration of the offer 

term of the competing bid. 

There is no other way to extend the offer term.


Publication of the 

management board’s 

opinion of the target 

company 



Providing notification 

of the relevant data to 

the target, the Agency, 

the CDA, and the stock 

exchange or regulated 

public markets 



purchase price to all 

shareholders that 

tendered their shares 

Transfer of payment from 

the bidder to the CDA 

Transfer of payment to 

shareholders by the CDA 


The management board of the target has a duty to publish 

its opinion about the takeover bid within 10 days after the bid 

is launched. The opinion has to refer to the following: their 

opinion about the bid price; bidder’s future business plans 

with respect to the target company; possible consequences 

for the current employees of the target company including 

also possible changes of the location of the target company’s 

business operations; the management board’s intention to 

accept or reject the offer; and the possible existence of the 

management board’s agreement with the bidder (if any). 

The management board of the target company must, within 

five days after the bid is launched, inform the representatives 

of the target’s employees about their opinion, who can 

reply within three days. Finally, the management board must 

include the employees’ opinion on the bid together with its 

final opinion about the bid, publish it together and deliver it 

to the Agency and the stock exchange or regulated public 

markets. 

Publication of success of the bid by the bidder: Within seven 

days after the expiration of the validity of the bid (offer term + 

payment term). 

The announcement of the results of the bid has to be provided 

by the bidder to the target, the Agency, the CDA, and 

the stock exchange or regulated public markets. 

Maximum of 14 days from the last day of the bid’s validity. 

No later than 12 days after the last day of the bid’s validity. 

The next working day after the CDA receives the cash. 

1



Transfer of tendered 


account by the CDA 


The Agency supervises all public aspects of the takeover process, including such things as determining 

whether there is an obligation to carry out a takeover bid and determining whether the 

participants in a takeover are acting in concert. At any time during the takeover, the Agency may 

request that the target, the target’s shareholders, or any bank, brokerage firm, or other legal entity 

or individual that is involved make available to the Agency for its inspection all documentation 

that the Agency deems necessary to implement its supervisory activities. 

Any shareholder of the target may, through the locally competent commercial court, request the 

mandatory purchase of its shares by the person who was required to publish the takeover bid 

upon the terms and conditions that would have governed the bid, had it been published. 


The next working day after the CDA receives the cash to be 

transferred to the shareholders. 


An acquisition of target shares will require a notice to and approval from the Croatian Competition 

Agency if the: 

g total worldwide turnover of the bidder (and persons acting in concert) and the target 

from the sale of goods and/or services is at least HRK 1 billion (approximately 

EUR 134,230,000) in the financial year preceding the acquisition; and 

g total domestic Croatian turnover of each of the bidder (and persons acting in concert) 

and the target from the sale of goods and/or services is at least HRK 100,000,000 

(approximately EUR 13,423,000) in the financial year preceding the acquisition. 

If these thresholds are met, the acquisition must be approved by the Croatian Competition Agency. 

The Competition Agency may grant explicit approval or may be deemed to grant approval 

if the Competition Agency fails to act on the notification within 30 days (or longer, if the 

Competition Agency extends the deadline). 


If the thresholds for notifying the intended concentration are not met, the Agency has adopted a 

practice according to which it approves the takeover bid if it is submitted with the bidder’s state-


ment, given before a public notary, stating that the intended concentration does not meet the 

reporting thresholds prescribed by the Competition Act and thus does not have to be announced 

to the Competition Agency. 

Since the takeover bid submitted to the Agency for approval must contain, inter alia, the decision 

of the Competition Agency on the intended concentration, the implementation and publication of 

the takeover bid is prohibited until the Competition Agency’s decision has been made. 


A shareholder holding at least 95% of the registered share capital of a Croatian joint stock company 

has the right to propose to the general assembly that it adopt a resolution requiring the 

transfer of all remaining shares of the minority shareholders to the principal shareholder. The 

principal shareholder determines the amount of the payment (in cash) to be paid to minority 

shareholders for their shares. The adequacy of the payment must be reviewed by one or more 

auditors appointed by the court. The minority shareholders can separately challenge the general 

assembly’s decision on the squeeze-out and the adequacy of the payment for the shares. 

The Takeover Act has introduced a “takeover squeeze-out”, which will apply as of Croatia’s 

accession to the EU, as summarized above. 

Once the “takeover squeeze-out” provision enters into force, it will significantly speed up the current 

squeeze-out procedure, which can be very prolonged due to the minority shareholders’ right 

to challenge the general assembly’s decision on the squeeze-out in court proceedings that can 

last for a number of years. In the “takeover squeeze-out” procedure, there will be no danger that 

a squeeze-out can be prolonged by mounting a challenge to the general assembly’s decision 

since the general assembly’s decision on the squeeze-out is not required.

Takeovers in Croatia

Takeovers in the 


Michal Pravda 


Takeovers in the Czech Republic 

The information contained in this article on takeovers in the Czech Republic was correct as of 1 

June 2008. 


takeovers in the Czech Republic, please contact: 

Paul Sestak 



186 00 Prague 8 


Tel.: +420 234 765 – 111 

Fax.: +420 234 765 – 110 

Email: paul.sestak@wolftheiss.com 

David Ayres 



186 00 Prague 8 


Tel.: +420 234 765 – 111 

Fax.: +420 234 765 – 110 













Timetable for a mandatory takeover bid 93 



Right of minority shareholders to sell 96 


Introduction 


Public takeover bids for Czech companies are relatively common. The privatization of stateowned 

companies originally resulted in widespread public share ownership, with almost 2,000 

privatized companies being listed on the Prague Stock Exchange following two waves of “voucher 

privatization” in 1993 and 1995. Most of these companies have subsequently been de-listed 

from the stock exchange due to low liquidity. 

Since the mid-1990s, public ownership of the shares received in voucher privatization has been 

increasingly concentrated as a result of numerous voluntary and mandatory takeover bids. Public 

share ownership has been further concentrated by a recent wave of “squeeze-outs”, permitted 

since June 2005, which has enabled the majority shareholders holding at least a 90% stake in a 

company to force out the minority shareholders. 

The current Czech legislation on takeovers provides for both voluntary and mandatory takeover 

offers, and for squeeze-outs in listed companies, initiated by majority shareholders. Most of the 

takeover deals have involved friendly takeovers, with hostile takeovers virtually non-existent. 


A new standalone Act on Takeover Bids (the Takeover Act) entered into force as of 1 April 

2008. The main purpose of the Takeover Act is to finalize the implementation of the Directive 

2004/25/EC on Takeover Bids (the Directive). This implementation had been overdue since 

20 May 2006, when the implementation deadline expired. Prior to the effective date of the Takeover 

Act, the takeover rules formed part of the Commercial Code. The new Takeover Act applies 

to listed shares only and regulates both voluntary and mandatory bids. The squeeze-out rules 

and the general framework of a public bid made to shareholders continues to be part of the 

Commercial Code. 


The Takeover Act currently regulates the following: 

• voluntary public bids for any equity securities (i.e., shares, interim share certificates or 

convertible securities enabling acquisition of such shares or interim share certificates, 

of listed companies); and 

• mandatory public bids for the equity securities of listed companies (buyouts). 

In addition, the Commercial Code regulates squeeze-outs initiated by majority shareholders (of 

either listed or unlisted companies), holding at least 90% of the share capital or voting rights. 

• When is the obligation to launch a mandatory bid triggered? 

If a target company’s equity securities are listed, a shareholder who acquires shares representing 

at least 30% of all votes associated with equity securities issued by the target company


(and who also acquires control of the target company) is obliged to make a mandatory bid to all 

holders of the target company’s equity securities within 30 days after the shareholder reached 

or exceeded such threshold. 


not apply? 

The Takeover Act for both voluntary and mandatory bids does not apply to an acquisition of 

shares that either does not trip the threshold of 30% of the voting rights or does not constitute 

control over the target company. It is unclear if it is possible under Czech law to launch a public 

bid to acquire less than a controlling stake (i.e., presumably less than 40%) in the shares of a 

Czech public company. The Takeover Act does not address the question and there appears to be 

no practice in the area. In theory, a public bid to acquire less than a controlling stake in a target 

should not be subject to the Takeover Act. 

The detailed takeover rules for mandatory bids under the Takeover Act do not apply to the acquisitions 

of control by a single shareholder or persons acting in concert if the acquisition (which 

would otherwise trigger the mandatory bid obligation) is the result of a prior unconditional and 

unlimited bid. Upon a shareholder‘s request, the Czech National Bank (CNB) may also waive 

the obligation to launch a mandatory bid if the acquisition of a controlling stake results from an 

increase of the share capital for the purpose of avoiding bankruptcy, for reaching or maintaining 

capital adequacy requirements or for the sole purpose of fulfillment of other statutory obligations 

of the target company. 


Acquisitions of shares at levels below the thresholds triggering a mandatory takeover may 

need to be reported. Under the Capital Market Undertaking Act, if an individual or a legal entity 

that directly or indirectly acquires shares of a listed company, which acquisition results in the 

shareholder‘s having voting rights exceeding a threshold of 3% (if the share capital of the issuer 

is higher than CZK 100 million), 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50% or 75%, it must 

inform the CNB and the issuer in writing within 3 business days from the moment at which it 

became or should have become aware of triggering these thresholds. 

A similar notification obligation applies to a shareholder whose shareholding drops below any of 

such thresholds. The same obligation applies to an entity with a share of voting rights of at least 

5% in a company registered in the Czech Republic whose shares have been listed for the first 

time at a regulated market in the Czech Republic or in another EU member state. 





bid, since any competing bidder would be precluded from acquiring majority ownership. A


negotiated purchase typically allows the acquirer to structure the transaction as a normal private 



If it is trying to organize the acquisition of a controlling stake from a number of large, but not controlling, 

shareholders, the bidder must take care to ensure that confidentiality is maintained and 

that rumors do not develop that influence the share price of the target. If there is a material share 

price movement or if rumors relating to an intended takeover bid for listed securities develop, the 

bidder must publish its intention to launch such bid or facts that have triggered or may trigger an 

obligation to launch a mandatory takeover bid without undue delay after becoming aware of such 

facts and must notify such facts to the CNB. 


In a negotiated transaction, it is common for the majority shareholder of the target to provide 

extensive information about the target, either directly or by encouraging the target to do so. Provided 

that the target‘s management is willing to make the disclosure (the majority shareholder 

cannot force the target to do so), the bidder can receive very extensive information about the 

target. 

A bidder must take care not to violate the insider trading provisions contained in the Capital 

Market Undertaking Act. After receiving unpublished material inside information from the target, 

the bidder is not allowed to purchase or dispose of any shares of the target on the basis of such 

inside information. 


• Notification of bids 

The bidder must without undue delay publish the information about the decision of its statutory 

bodies on the intention to launch a takeover bid or that the obligation to make a mandatory bid 

has been triggered. The bidder may notify the target company of the intention to launch the bid 

and negotiate with the target company, prior to publication of the above information. 


The offer document must be drawn up and published in such a way that the addressees can 

make a fully informed decision on the offer in a timely manner. It must contain at least the following 

information: 

• the bidder’s name and other relevant information on the bidder and, if appropriate, the 

extent of its existing participation in the target company and its percentage of voting rights in 

such company, including persons acting in concert (if any) and a description of the relations 

of the persons acting in concert, and if available, relations between the target company 

and persons acting in concert with it; 

• essential elements of a purchase or exchange contract (namely specification of the

0 


equity securities subject to the offer, in particular their class, type, form, nominal value, and 

ISIN, if assigned) and the price being offered for one share or, in the case of a share-forshare 

exchange offer, the class, type, form, nominal value and ISIN of the security being 

exchanged, the exchange ratio and the methods employed to determine the price or 

exchange ratio; 

• the average price (weighted average of market prices of the securities of the target 

company on the regulated market over the last 6 months) and, in the event of a mandatory 

bid, the premium price (the highest price for which the person obliged to launch the bid or 

persons acting in concert with it acquired shares of the target company within 12 months 

preceding the triggering of the bid obligation); 

• the method for accepting the tender offer; 

• the maximum number of equity securities to which the offer is limited, or the minimum 

number of equity securities on which the offer is conditioned; 

• the period during which the tender offer is binding; 

• the amount and terms of payment of compensation in the event of breakthrough and the 

method for determining such compensation; 

• the manner of notification of the acceptance of the bid or determination of the regulated 

market where the contract is to be concluded; 

• the procedure for the transfer of securities and for receiving payment of the 

price or other consideration; 

• the rules for withdrawal of the bid or rescission of the contract which arose on the 

basis of acceptance of the bid; 

• the bidder’s plans concerning the target company’s future activity, its employees and 

members of its management and supervisory boards, including planned changes with 

regard to employment conditions; 

• financial resources and the method of financing the cost of the acquisition; 

• the governing law of the contracts to be concluded on the basis of the bid, the law under 

which the target company has been incorporated, and the courts which will have 

jurisdiction for resolution of disputes arising from the takeover bid; and 

• information on the regulator supervising the bid, including information on approval of 

publication of the bid. 

• Consent of the CnB to the publication of the bid 

Consent of the CNB to the publication of the bid must be obtained. The bidder must submit to the 

CNB the draft bid within 15 business days after triggering the obligation to launch a bid. The CNB 

may, upon the bidder‘s request, extend this period by up to 30 business days. A mandatory bid 

must be launched within 30 days after the acquisition which triggered such obligation. 

• Publication of the bid 

If no decision is made by the CNB within 15 business days from the delivery of the draft bid, the 

CNB is deemed to have consented to the publication of the bid. No later than 10 business days 

prior to the publication of the bid, the bidder must submit a draft to the board of directors and the 

supervisory board of the target company. The bid must be published in a Czech national daily 

newspaper and at the same time on the internet. The publication on the internet is not required 

if the offer document is provided to the public free of charge in writing in the registered offices of

the target company and the bidder. 


• Purchase price/amount of consideration 


For mandatory bids, the consideration offered per share must correspond to at least the highest 

price for which the person obliged to launch the bid or persons acting in concert with it acquired 

shares of the target company within 12 months preceding the triggering of the bid obligation (the 

“premium price”). If no premium price may be determined, the consideration offered per share 

must correspond at least to a weighted average of market prices of the securities of the target company 

on the regulated market during the six months preceding the triggering of the bid obligation 

(the “average price”). The consideration to be offered is determined by the bidder. The bidder may 

supply an appraisal of the offered consideration by a court-appointed expert at its discretion. If no 

appraisal is submitted by the bidder, the CNB may request the submission of such an appraisal. In 

the event of doubt regarding the correctness of the submitted appraisal, the CNB is entitled to order 

another appraisal by an expert selected by the CNB at the cost of the bidder. 

• Bid term 

The offer must remain open for at least four weeks from its publication. If it is open for more 

than 10 weeks, the bidder must publish a notification of the date of closing of such bid two weeks 

priorto the closing. If a permitted amendment to a bid would extend the period for which the bid 

is open, such extension must not exceed two weeks, unless the CNB approves a longer extension. 


Conditions to voluntary bids are generally not prohibited. The Takeover Act expressly allows a 

condition of minimum acceptance – the bid may be conditioned on receipt of a minimum total 

number of shares from tendering shareholders. A “partial voluntary bid” is also allowed if the 

bidder purchases the pro-rata portion of shares from persons who accepted the bid and who 

offered shares in excess of the number of shares the bidder offered to purchase. Mandatory bids 

may not be subject to conditions. 


Voluntary bids may be withdrawn only if this is expressly stated in the terms of the offer, and is 

due to “important” reasons not depending on the will of the bidder. Withdrawals of mandatory 

bids are not permissible. 


The intention to amend a bid must be notified to the CNB five business days prior to its publication 

and the offer must remain binding for at least five business days following the publication 

1


of the change. If the change would extend the period for which the bid is open, such extension 

must not exceed two weeks, unless the CNB approves a longer extension. After publication, 

generally the bid may only be amended in favor of its addressees. The offer may be amended 

by an increase in the bid price, but any contracts already concluded must be amended to reflect 

the higher price. 

Restrictionsonthebidderandthetargetmanagement 

following announcement of a takeover bid 


• The bidder may not acquire or sell target shares, other than through the takeover 

bid (with certain exceptions stipulated by the Takeover Act). Further, the bidder may not 

acquire or sell options for target shares. Finally, it may not enter into any 

future agreements for the sale of target shares. These prohibitions also apply to all 

persons acting in concert with the bidder. 

• The target may not, inter alia 

- adopt any measures that could cause its shareholders not to be able to decide on the 

bid in their own discretion and with adequate knowledge of the matter; 

- take any action that could frustrate or complicate the bid, except when this is approved 

by a general meeting during the period of time when the bid is binding, the target 

company is fulfilling its statutory obligations or it is a matter of the usual course of business. 


A competing bid may be published at least five business days prior to expiry of the original bid 

term. It must last for the same period as the original bid, however 10 business days at a minimum. 

If the period for which the competing bid is open would end after the closing of the original 

bid, the period of the original bid is extended, so that both bids close simultaneously.

Obligation to announce the 

intention to launch a bid or 

triggering of the obligation 

to launch a mandatory bid 

to the public and the Antimonopoly 

Office 


announcement of the 

acquisition of shares or the 

intention to publish the bid 

and publication of the bid 


must 




The bidder is obliged to publish its intention or obligation to 

launch a bid without delay after the decision is made or the 

obligation to make a bid is triggered. 

The intention may be notified to the target company prior to 

the above publication. 

If the acquisition of control in the target company is subject 

to the Antimonopoly Office’s approval, this should generally 

be obtained before the bid is launched and, for listed companies, 

before the application for the CNB’s approval of the 

bid is filed. However, a takeover may be implemented prior 

to the submission of the application or prior to the effective 

decision of the Antimonopoly Office, provided that the 

application to the Antimonopoly Office is submitted immediately 

after the takeover and that the voting rights to these 

securities are not exercised until a final decision has been 

made. 

90 days 

• publish its intention to launch a bid or the triggering of 

an obligation to make a bid; 

• submit the offer document to the CNB, while supporting 

the adequacy of the offered consideration by 

an expert valuation or other reasoning; 

• obtain the CNB’s approval for publishing the bid; 

• deliver to the target company’s board of directors and 

supervisory board the draft offer document; 

• obtain a statement of opinion of the target company’s 

boards on the draft offer document. 

• if the bidder is a foreign entity, appoint a representative (a 

securities dealer or an attorney) registered in the Czech 

Republic; and 

• if requested by the CNB, prove the origin and sufficiency 

of funds or deposit an appropriate advance sum in 

a bank account.



Offer launch 



Providing notification of the 

relevant data to the target, 

the CNB, and the stock exchange 

or regulated public 

markets 



purchase price to all shareholders 

that tendered their 

shares 

Transfers of payment from 

the bidder to shareholders, 

transfer of tendered shares 

to the bidder’s account 

The time allowed for acceptance of a bid must be at least 4 

weeks. If it is open for more than 10 weeks, the bidder must 

publish a notification of the date of closing of such bid two 

weeks prior to the closing. 

The Takeover Act provides exclusively for the following extension 

of the offer term: if (i) a competing bid has been published, 

or the bidder changed the amount of consideration 

or (ii) in the event of amendment of the bid. The term of a 

voluntary bid may also be shortened, if this is based on an 

“important interest” of the target company; the shortened 

term may not be shorter than 2 weeks. 

Without undue delay after expiry of the bid term, in the same 

manner as the bid. 

In addition to publication of the results of the bid, the bidder 

must send a written report on the results to the board of directors 

and the supervisory board of the target. 

For mandatory bids, a maximum of 60 days from expiry of 

the bid term. 

The Prague Stock Exchange does not offer any specialized 

service for settlement of takeover bids. Such service 

is offered by an organizer of an off-exchange market, RM- 

System. 

The settlement through RM-System would be effected immediately 

following the determination of the results of the 

bid, as long as the corresponding consideration is deposited 

by the bidder to its settlement account.



The CNB is the competent supervisory authority with regard to public takeover offers. If the bidder 

breaches the rules governing offers, the CNB may decide that the bidder is no longer entitled 

to exercise its shareholder rights related to the respective shares. The CNB may also prohibit 

the offer under certain conditions provided by law or may require a change in the content of the 

offer, especially a change in the offer price. 



An acquisition of target shares will require a notice to and approval from the Czech Antimonopoly 

Office if: 

• the total domestic Czech turnover of each of the bidder (and persons acting in concert) and the 

target from the sale of goods and/or services is at least CZK 250 million (approximately 

EUR 8.9 million) in the financial year preceding the acquisition and the combined total 

Czech turnover of the bidder (and persons acting in concert) and the target from the sale of 

goods and/or services is at least CZK 1.5 billion (approximately EUR 54 million) in the 

financial year preceding the acquisition; or 

• the total domestic Czech turnover of the target from the sale of goods and/or services is 

at least CZK 1.5 billion (approximately EUR 54 million) in the financial year preceding 

the acquisition and the total worldwide turnover of the bidder (and persons acting in 

concert) from the sale of goods and/or services is at least CZK 1.5 billion 

(approximately EUR 54 million) in the financial year preceding the acquisition. 

If these thresholds are met, the acquisition must be approved by the Czech Antimonopoly Office. 

Within 30 days after filing the application for approval of the takeover, the Antimonopoly 

Office must issue a statement to the effect that: (i) the takeover is not subject to approval, (ii) the 

takeover will not restrict or eliminate competition and, therefore, it is approved, or (iii) the procedure 

before the Antimonopoly Office will be continued due to the possibility of the restriction or 

elimination of competition. If option (iii) applies, the Antimonopoly Office is obliged to issue its 

decision within 5 months of the filing of the application. Otherwise the takeover is considered 

approved. 

According to the Competition Act in general, a concentration of undertakings cannot be implemented 

prior to the submission of the clearance application or prior to the effective decision of the 

Antimonopoly Office. However, there is an exemption for takeovers of a target company whose 

equity securities are publicly traded. Under this exemption, a takeover can be implemented prior 

to the submission of the application or prior to the effective decision of the Antimonopoly Office, 

provided that the application submitted to the Antimonopoly Office is submitted immediately after 

the takeover and that the voting rights attached to these securities are not exercised.



If the thresholds for notifying the intended concentration are not met, no clearance of the Antimonopoly 

Office is required and no such clearance needs to be submitted to the CNB for approval of the bid. 

Right of minority shareholders to sell 

If the bidder acquires securities of the target company representing at least a 90% share of the 

voting rights and capital of the target company as a result of an unlimited and unconditional bid, it 

is obliged to launch an additional bid within 30 days of closing of the original bid to the remaining 

shareholders, for a consideration corresponding at least to the original bid. 


The right to squeeze-out is available to a majority shareholder holding at least 90% of the shares 

or 90% of voting rights of a Czech joint-stock company (both listed and unlisted). This shareholder 

has the right to request that the board of directors call a shareholders meeting to decide on 

the squeeze-out of the minority shareholders. After the shareholders meeting passes the decision 

on the squeeze-out, the board of directors files an application to register the squeeze-out 

decision in the Commercial Register. The forced transfer of the shares becomes effective one 

month from the publication of the registration court’s notice that the squeeze-out decision has 

been registered. The majority shareholder must pay the minority shareholders fair compensation 

for their shares, which must be supported by an expert opinion or by other justification for the 

amount of consideration. For listed shares, a prior consent of the CNB with the justification for 

the amount of consideration is required. 

Numerous squeeze-outs have been challenged in courts by minority shareholders, who 

claimed a violation of their constitutional rights (expropriation), since the “fair compensation” for 

the shares had been determined by an expert appointed by the majority shareholder (between 

3 June 2005 and 30 September 2005, the expert valuation did not need to be approved by the 

CNB). Claimants argue that the expert who determines the fair price of the shares should have 

been appointed by an independent court and not by the majority shareholder. In November 

2005, a group of senators submitted a complaint to the Czech Constitutional Court against the 

squeeze-out amendment. In March 2008, the Constitutional Court dismissed this complaint and 

confirmed the validity of the squeeze-out rules.

Takeovers in Hungary 


János Tóth, Gábor Erdös and Barnabás Buzási 

Faludi Wolf Theiss Attorneys at Law, Budapest 

The information contained in this article on takeovers in Hungary was correct as of 1 June 2008. 


takeovers in Hungary, please contact: 

Zoltán Faludi 

Faludi Wolf Theiss Ügyvédi Iroda 

Kálvin tér 12-13., Kálvin Center 

1085 Budapest 

Hungary 

Tel.: +36 1 4848 - 800 

Fax.: +36 1 4848 – 825 

Email: zoltan.faludi@wolftheiss.com 

David Ayres 



186 00 Prague 8 


Tel.: +420 234 765 – 111 

Fax.: +420 234 765 – 110 




The Takeover Rules in the Capital Markets Act 99 






Rights and obligations of the bidder and the target company’s management 

following announcement of a takeover bid 106 


Timetable for an acquisition not triggering a takeover bid 108 

Timetable for a takeover bid 109 


Liability 110 


Minority squeeze-out/sell-out (put) 112 

Breakthrough rule 112

Introduction 


Public takeover bids for Hungarian companies are not common. The privatization of state-owned 

companies has not resulted in widespread public share ownership, and only a few privatized 

companies have chosen to list on the Budapest Stock Exchange (BSE) due to low liquidity. Most 

of the trading on the BSE involves the shares of a few of Hungary’s larger companies, most of 

which are potential bidders as well as potential targets of a takeover. 

In the mid-1990s, the privatization boom coincided with increased foreign investments in Hungary. 

Between 1989 and 1996, 85% of the companies privatized were sold to foreign buyers. As a 

result, the privatization did not result in a substantial increase in publicly traded issuers. Public 

share ownership has been further concentrated by a recent wave of takeovers and “squeezeouts”, 

under which majority shareholders owning at least a 90% stake in a company can force 

out the minority shareholders. 

The current Hungarian takeover regulation provides for both voluntary and mandatory takeover 

offers, for buy-outs of minority shareholders of listed and unlisted companies (initiated by either 

minority or majority shareholders) and for squeeze-outs in either listed or unlisted companies, 

initiated by majority shareholders. Most of the takeover deals have involved friendly takeovers; 

however, the recent attempt by the Austrian energy company OMV to acquire its Hungarian rival 

MOL has been seen as a hostile takeover bid by the Hungarian management. A number of the 

recent squeeze-outs have also been seen as hostile by the minority shareholders, who have 

challenged them on constitutional grounds. 

The Takeover Rules in the Capital Markets Act 

Takeovers in Hungary are regulated by the takeover sections (Sections 65 to 80/A) (the Takeover 

Rules) of Act CXX of 2001 on Capital Markets (the Capital Markets Act). In addition to 

the Capital Markets Act, Act IV of 2006 on Business Associations (the Companies Act) also 

contains provisions affecting the takeover process. The earlier Hungarian takeover legislation 

had been based on the principles set out in the draft provisions of EU Directive 2004/25/EC on 

takeover bids (the Directive), so that the Capital Markets Act required only minor amendments 

when the Directive was implemented in its final form. During the summer of 2007, in the context 

of the attempted takeover of MOL by OMV, the Hungarian Parliament passed an additional 

anti-takeover act (Act CXVI of 2007), popularly called “lex MOL”. Lex MOL aims at protecting 

“strategically important” companies in the energy and utilities sectors. It is currently under investigation 

by the EU Commission. Among other forms of protection against hostile takeovers, lex 

MOL raises the voting percentage needed for the removal of board members by shareholders 

and gives target companies a relatively free hand in adopting protective measures, such as share 

buybacks or voting right limitations.

100 


• To whom do the Takeover Rules apply? 

The Takeover Rules currently regulate the following: 

• voluntary public purchase offers (bids) for any equity securities (i.e., shares, interim share 

certificates or convertible securities enabling acquisition of such shares or interim share 

certificates, of either listed or unlisted companies); and 

• mandatory public purchase offers (bids) for the equity securities of either listed or 

unlisted companies. 

• When is the obligation to launch a mandatory bid triggered? 

Any person who: 

• acquires (directly or indirectly) 1 more than 25% of the voting shares or voting rights in a target 

company in which no other shareholder than the bidder holds more than 10% of the voting 

rights, or 

• acquires (directly or indirectly) more than 33% of the voting shares or voting rights (regardless 

of the shareholdings of others) 

is obliged to launch a mandatory bid for all securities to which voting rights in the target company 

are attached and the bid must be addressed to all holders having voting rights. Such a mandatory 

bid is subject to the prior approval of the Hungarian Financial Supervisory Authority (HFSA). 

Without HFSA’s prior approval, the above mentioned thresholds may not be exceeded by the 

person (Bidder). If the Bidder exceeds the threshold in violation of this requirement, the rules 

described in the section entitled “Liability” will apply. 

The Takeover Rules refer to the acquisition of a “participating interest”, rather than acquisition 

of “shares”, since under the Takeover Rules only shares with voting rights need to be taken into 

consideration. This means that other kinds of shares are not counted when calculating whether 

the various thresholds under the Takeover Rules have been reached. 

• To what kind of acquisitions do the Takeover Rules not apply? 

The Takeover Rules do not apply to the acquisition of a participating interest that does not exceed 

the threshold of 33% (or 25%, if no other shareholder holds at least a 10% participating 

interest in the target). 

The Takeover Rules do not apply to the acquisition of a participating interest in a collective investment 

trust operating as a business association in accordance with the relevant national laws 

and national bank regulations of the Member States of the European Union. 

1) Indirect holding, acquisition and control includes the control of shares or voting rights in a company through an intermediary 

company. The extent of indirect holding and indirect control is determined by multiplying the share or voting right held 

in the intermediary company by the share or voting right - whichever is greater - held by the intermediary company in the 

target company. If the share or voting right in the intermediary company is higher than 50%, then all shares in the target 

held by the intermediary company are counted in determining the control in the target (i.e., a holding of over 50% is treated 

as the equivalent of a 100% holding in the intermediary company).



Under the Capital Market Act, any acquisition by an individual or legal entity of voting shares 

of a company that results in such shareholder’s holding, directly or indirectly, voting rights that 

exceed 5% of the target company’s capital, must be reported by such shareholder to the HFSA 

and the target company. In addition, any subsequent acquisition of shares resulting in the shareholder 

crossing additional 5% thresholds (i.e., 10%, 15%, etc.) up to 50% must be reported to the 

HFSA and the target company, as must crossing the further thresholds of 75%, 80%, 85% and 

90% and any additional increase of one percentage point thereafter. The information must be 

provided in writing within 2 business days after the day on which the shareholder became aware 

or should have become aware that it had exceeded the triggering threshold. 

A similar notification obligation applies to a shareholder whose shareholding decreases below 

any of the above thresholds. 








include standard conditions precedent, representations and warranties, indemnities, etc. 

This area of law is not specifically regulated, but irrevocable undertakings to sell shares have 

been used effectively in practice in Hungary. The English practice of requesting the shareholder 

to undertake to accept the offer substantially on the terms of an attached draft press announcement 

is acceptable but not customary in Hungary. When seeking an irrevocable undertaking, 

however, a request for an undertaking made by cold calling or by a letter of request or similar 

communication risks characterization as a public offer. Also, under the Capital Markets Act, all 

shareholders of the same class in a target must be offered the same terms, and no arrangement 

is permitted with any shareholder which includes any favorable conditions which are not extended 

to all shareholders. Therefore, an irrevocable undertaking must be drafted so as to ensure 

that it does not result in any shareholder obtaining special terms. 

If the Bidder tries to organize the acquisition of a controlling stake in a company listed on a 

regulated stock exchange from a number of large, but not controlling, shareholders, the bidder 

must take care to ensure that confidentiality is maintained and that rumors do not develop that 

influence the share price of the target. If there is a material share price movement or if rumors 

relating to an intended takeover bid for listed securities develop, the bidder must publish its 

intention to launch such bid or facts that have triggered or may trigger an obligation to launch a 

mandatory takeover bid without undue delay after becoming aware of such facts and must notify 

such facts to the management and supervisory board of the target company. 

101

10 



In a negotiated transaction, it is common for the majority shareholder of the target to provide 

extensive information about the target, either directly or by encouraging the target to do so. Provided 

that the target’s management is willing to make the disclosure (the majority shareholder 

cannot force the target to do so), the bidder can receive very extensive information about the 

target. 

The Bidder must take care not to violate the insider trading provisions set out in the Capital 

Markets Act. After receiving unpublished material inside information from the target, the bidder 

is not allowed to purchase or dispose of any shares of the target on the basis of such inside 

information. 


• Notification of bids 

The terms of a voluntary bid or of a mandatory bid are subject to HFSA’s prior approval. The 

Bidder is obliged to mandate a licensed investment service provider to submit the takeover offer 

(Offer) to HFSA. Simultaneously with the submission of the Offer to HFSA, the Bidder must also 

send the complete Offer (with all of its annexes) to the board of directors of the target company 

and publish the Offer in a national newspaper. The publication must include a statement that the 

Offer has not yet been approved by HFSA and (if applicable) that the Bidder has applied for the 

approval of the competent competition authority. 

HFSA is obliged to notify the target company about its decision on the approval of the Offer. 

No whitewash procedure is available in Hungary which would allow the shareholders of the target 

company to approve an acquisition by a Bidder which would otherwise trigger a mandatory 

offer, thereby waiving the requirement for such a mandatory offer. 


The Offer document must be drawn up and published in such a way that the addressees can 

make a fully informed decision on the Offer in a timely manner. It must contain at least the following 

information: 

• the Bidder’s name and other relevant information on the Bidder and, if appropriate, the 

extent of its existing participation in the target company and its percentage of voting rights in 

such company; 

• a specification of the equity securities subject to the Offer, in particular their class, type and form; 

• the purchase price offered for one share and the nature of the consideration (money or, in 

case securities are offered, the class, type, form and nominal value of the securities being 

exchanged, the exchange ratio and the methods employed to determine the price or ex-


change ratio); 

• if non-cash consideration is being offered, a statement that the shareholder accepting the 

Offer may require the Bidder to pay the consideration in cash; 

• the place and method for accepting the offer; 

• the period during which the offer may be accepted, which may not be less than 30 days nor 

longer than 65 days (Acceptance Period); 

• the name of the Bidder’s mandated investment service provider; 

• the section of the Offer where the target company‘s shareholders may find the operational 

plan and economic report of the Bidder; 

• a statement by the Bidder reserving the right to withdraw the Offer if the Bidder is unable to 

acquire more than 50% of the voting shares of the target company (optional); 

• a description of the relationship (if any) between the Bidder and the target company; 

• compensation for any rights that may be revoked as a result of application of the breakthrough 

rule; 

• the applicable law and the competent court for resolving any dispute between the sellers 

(shareholders) and the Bidder; 

• the Bidder’s plans for changing the terms of employment or employment conditions 

of the target workforce; and 

• all other important conditions. 

In addition to the above information, the Bidder and the investment service provider are obliged 

to attach the following annexes to the Offer 

• Operational plan and economic report of the Bidder; 

• Proof of sufficient financial resources to cover the consideration to be paid to tendering 

shareholders during the Acceptance Period; 

• Statement concerning the exercise of buy-out/squeeze-out option (if applicable). 

The Bidder and the investment service provider have joint and several responsibility for the truth 

and accuracy of the data included in the economic report of the Bidder. The Bidder and the 

investment service provider must also certify to HFSA that the Bidder has adequate financial 

resources to fund the purchase price for the shares subject to the Offer. Adequate financial 

resources may include cash, government securities issued by an OECD or a European Union 

member state, or a bank guarantee issued by a Hungarian bank or a bank with its seat in an 

OECD or a European Union member state. 

Under the recent modification of the Takeover Rules, both the HFSA and the Bidder’s shareholders’ 

meeting have to approve the operational plan. 

• Approval of the offer by HFSA 

After the Offer has been filed with HFSA, it has 15 days to approve or to refuse approval. If HFSA 

remains silent during this 15-day period, the approval is deemed to have been granted. If any 

mandatory information is missing from the application or the Offer, HFSA may give another 5 

days for modification or supplementation. If the Offer has been modified or supplemented, HFSA 

has 5 days from the receipt of the modification or provision of additional information to approve 

or to refuse the Offer. If HFSA fails to approve the Offer or to require amendments within the 

relevant period, the bid is deemed to have been approved. 

10

10 


• Publication of the bid 

The Bidder must publish the Offer and the HFSA approval immediately after receipt of such 

approval, and such publication must indicate the first and the last day of the Acceptance Period. 

The first day of the Acceptance Period may not be earlier than the second day following the publication 

of HFSA’s approval and it may not be later than the fifth day following the publication of 

the approval. 

• Information provided by target company 

Before the first day of the Acceptance Period, the board of directors of the target company has 

to give its opinion on the Offer and must commission an independent financial expert to assess 

the Offer (at the target company’s expense). The shareholders of the target company must be 

notified of both publications in an appropriate manner. 

If the target company has, at the Bidder’s request, provided information regarding the target 

company‘s operations, the Bidder, its proxy and the cooperating investment service provider 

must handle this information as confidential and comply with the regulations concerning insider 

trading, securities and business secrets. 



The purchase price that must be offered for securities listed on a regulated market is the highest of: 

(a) the average stock market price of the shares calculated by the trading index in the last 

180 days preceding the submission of the Offer, or 

(b) the highest price contracted by the Bidder for such securities during the 180 days 

preceding the submission of the Offer, or 

(c) the average stock market price of the shares calculated by the trading index of the 

last 360 days preceding the submission of the Offer (if available), or 

(d) the average of the call price and the fee for any purchase or repurchase call option exercised 

by the Bidder and affiliated persons in the last 180 days preceding the submission 

of the Offer, or 

(e) the average of the call price and fee for any purchase or repurchase call option fixed in an 

agreement entered into by the Bidder and affiliated persons in the last 180 days preceding the 

submission of the Offer, or 

(f) the consideration per share received for exercising voting rights by the Bidder and affiliated 

persons 2 , or 

(g) the amount of equity capital per share of the target company. 

2 ) Affiliated persons are the parent company and affiliates of the Bidder, and shareholders holding more than 10% of the 

shares of the Bidder.


The purchase price that must be offered for securities not listed on a regulated market is the 

higher of: 

- the average market price of the shares calculated by the trading index in the last 180 days 

preceding the submission of the Offer, or 

- the amount set out in subsections (b), (d), (e), (f), and (g) above. 

The Bidder must offer the same price to each shareholder for the same class of shares (i.e., nondiscrimination 

of addressees). The same regulations apply for voluntary bids. 

The nature of the consideration is normally a commercial decision. Offers can be for cash, securities 

or a combination of both. However, the Capital Markets Act always requires the Bidder 

to include a cash alternative. 

• Bid term 

The Offer must remain open for the Acceptance Period, which is at least 30 days and cannot 

be open for longer than 65 days, including any extension. If a competing bid is made and 

approvedby HFSA, this does not change the length of the original Acceptance Period. However, 

a competing bid must be submitted no later than 15 days before the termination of the Acceptance 

Period. 


The Takeover Rules expressly permit a Bidder to include a condition of minimum acceptance 

(i.e., the Offer may be withdrawn if shareholders tender insufficient shares for the Bidder’s 

participating interest to reach 50%) or a condition that the Offer will be withdrawn if merger clearance 

is not obtained. No other conditions are allowed. 

• Voluntary bids 

Voluntary bids are regulated by the same provisions as mandatory bids, with the exception that 

a voluntary bid need not be made for all securities that confer voting rights in the target company 

and need not be made to all holders having voting rights. Moreover, the board of directors of the 

target company is not obliged to fulfill the duties described in the section of this Memorandum 

entitled “Information provided by target company”. 


Mandatory bids may only be withdrawn if the participating interest to be acquired would confer 

ownership of less than 50% of target’s voting securities and if this cancellation clause is expressly 

included in the terms of the Offer. 


The purchase price for shares in a mandatory bid may be amended until the last day of the Acceptance 

Period, but only if the new purchase price is higher (expressed in cash) than the original purchase 

10

10 


price described in the Offer. Such purchase price must be published in order to gain effectiveness. 

The new purchase price also applies to all acceptances already made before the publication. 

• Acceptance of the offer 

A shareholder may accept the Offer (the Acceptance Declaration) either personally or by giving 

a power of attorney to another person. An Acceptance Declaration cannot be revoked; however it 

will lose its effectivity if a competitive bid is published. The share sale and purchase agreement 

between the Bidder and the seller will enter into force on the last day of the Acceptance Period, 

except if the threshold of minimum acceptance has not been reached or if the permission of the 

Competition Authority has not been obtained at that time, in which case the deadline is delayed 

until the Competition Authority has completed its process. The Bidder must pay the purchase 

price for the shares within 5 working days (the Payment Period) after the last day of the Acceptance 

Period. If the Bidder fails to pay the purchase price within 30 days after the end of the Payment 

Period, the seller is entitled to revoke its Acceptance Declaration. The Bidder must notify 

HFSA within 2 working days if a seller has terminated its Acceptance Declaration. 

Rights and obligations of the bidder and the 

target company’s management following 

announcement of a takeover bid 

Under the original takeover provisions, the governing body of the target company was required 

to remain neutral and the board of directors was therefore only allowed to take steps against a 

takeover regarded as hostile if a resolution was adopted by the general meeting of the target 

company. 

However, lex MOL has eliminated the previous restrictions and has strengthened in many ways 

the position of Hungarian companies that become the target of a hostile takeover. 


Ñ The Bidder may not acquire or sell target shares, other than through the takeover bid (with 

certain exceptions stipulated by the Takeover Rules). Further, the Bidder may not acquire or 

sell options for target shares. Finally, it may not enter into any future agreement for the sale 

of target shares. These prohibitions also apply to all persons acting in concert 3 with the Bidder. 

Ñ A voluntary Bidder may not submit a new voluntary Offer within 6 months from the date of the 

termination of an earlier voluntary Offer. 

Ñ The rights of the management of a target company to act to defend itself from a hostile bid, 

3 ) Persons acting in concert means those persons (natural and legal entities) cooperating to acquire influence in the target 

company or hinder a takeover of target company.


described below, were introduced by lex MOL. These actions were not permitted 

by the previous Takeover Rules. 

Ñ During the offer period, the board of directors and the supervisory board of the target company 

• may take action that could frustrate or complicate a bid only if the articles of association 

prescribe it; 

• are allowed to adopt any decisions, without the approval of the general meeting, that are 

aimed at preventing the Bidder from gaining control of the target company during the validity 

of the bid. 

Ñ Furthermore, according to the new rules 

• a public limited company is allowed to hold an unlimited number of its own shares (previously 

a public limited company could not hold treasury shares worth more than 10% 

of its share capital); 

• the target company is no longer obliged to abolish a restriction on voting rights set forth 

in the articles of association if the Bidder acquires at least 75% of the voting rights after 

completion of the takeover bid (this eliminates the breakthrough rule); 

• a public limited company’s articles of association may require more than a simple majority 

of shareholder votes to remove management board members; 

• a public limited company’s articles of association may stipulate the maximum level of 

voting rights that may be exercised by a specified group of shareholders. 

Lex MOL also prescribes that a decision on the recall of the board members of “strategically 

important” companies (e.g., gas and electricity companies) requires a qualified (i.e., 75%) 

majority of the shareholders. 

Lex MOL also stipulates special regulations for those target companies in which the Hungarian 

State holds a golden share. 


A competing bid may be made by a rival bidder within the binding Acceptance Period of the 

original bid. The provisions relating to initial Offers apply equally to competing bids. However, 

the purchase price offered in a competing bid must be at least 5% higher than the price in the 

original bid. If, during the period when a competing offer is binding, the original Bidder or another 

competing bidder intends to increase its offer, it must increase it by at least a further 5% above 

the price quoted in the competing bid. The original Bidder is not allowed to sell shares acquired 

on the basis of its bid by way of accepting the competing bid. 

10

10 


Timetable for an acquisition not triggering a 

takeover bid 

(Acquisition of an interest of 5%) 

Steps to be taken Time (days) 

Acquisition of a 5% interest/ 

participation in a target 

company. 

Filing by relevant member 

of the notification to HFSA 

that the threshold has been 

exceeded. 

Simultaneously with the 

filing of the notification, the 

board of directors of the Target 

Company has to be notified, 

and the notification sent 

to HFSA has to be published 

in a national newspaper. 

T 

T+2 

T+2

Timetable for a takeover bid 


Steps to be taken Time (days) Aggregate 

Sending the form of the 

Offer to HFSA, mandating 

an investment service 

provider and applying for 

permission. 

Simultaneously with the 

filing of the application 

and the Offer, the board 

of directors of the Target 

Company has to be notified, 

and the Offer has to 

be published in a national 

newspaper. 

The board of directors of 

the Target Company immediately 

forwards the Offer 

to the representatives of 

the employees. 

HFSA has 15 days after 

filing the application and 

the Offer to approve the 

Offer. If the Offer is incomplete, 

HFSA may give 

5 days for provision of 

additional information. After 

the submission of the 

revised Offer HFSA has 5 

days from the receipt to 

approve the Offer. 

Once HFSA’s approval has 

been obtained, the Bidder 

must immediately publish 

the approval. 

T 

T 

T 

T+15+ (5+5) 

T+15/25+2 to 5 = A 

T 

T 

T 

25 

30 

10

110 


Steps to be taken Time (days) Aggregate 

Acceptance Period (minimum 

30 days; maximum 

65 days). 

Within 2 days after the 

last day of the Acceptance 

Period, HFSA has 

to be informed about the 

result of the Offer. 

Payment period: within 5 

days after the last day of 

the Acceptance Period. 

If Bidder fails to pay the 

purchase price for the 

shares within 30 days 

after the last day of the 

calculated Payment Period, 

the seller is entitled 

to revoke its Acceptance 

Declaration. 


A+35 to 65 

A+2 

A+5 

A+35 

HFSA is the competent supervisory authority with regard to public takeover offers. If the Bidder 

breaches the Takeover Rules, HFSA may decide that the Bidder is no longer entitled to exercise 

its shareholder rights related to the shares it holds in target. HFSA may also prohibit the Offer 

under certain conditions provided by law or may require a change in the content of the Offer, 

especially a change in the purchase price. 

Liability 

Liability for the information provided. The Bidder and the investment service provider must attach 

to the business report a declaration that all data in the business report is true and correct 

and that the business report contains all required information to make a well-founded judgment 

with respect to acceptance of the Offer. The Bidder and the investment service provider have 

joint and several liability for any damages arising from false or misleading information in the 

95 

92 

95 

125

usiness report or its annexes. 


Liability for non-adherence with the Takeover Rules. If the Bidder violates the Takeover Rules 

or acquires a participating interest in a way other than those permitted in the Takeover Rules, 

the Bidder (i) cannot exercise its voting rights, and (ii) must dispose of the interest acquired in 

breach of the Takeover Rules within 60 days after it receives the resolution of HFSA or acquires 

such interest. 



An acquisition of target shares will be subject to the prior approval of the Hungarian Competition 

Office (GVH), unless the proposed acquisition constitutes a concentration subject to the EU 

merger control regulations, if: 

• the combined turnover of all undertakings concerned in the previous calendar year exceeds 

HUF 15 billion (approximately EUR 60 million) and 

• each of at least two of the undertakings concerned achieved turnover in the previous calendar 

year in excess of HUF 500 million (approximately EUR 2 million). 

For the purposes of calculating the relevant notification thresholds, the notifying party must take 

into consideration concentrations which it completed within a two-year period preceding the 

concentration in question with the same group of undertakings transferring control, but which did 

not become notifiable to a competition authority. 

When calculating “turnover”, only Hungarian derived net sales revenues needs to be regarded. 

For Hungarian registered undertakings, this means worldwide turnover; for foreign registered 

undertakings, only turnover derived from business in Hungary must be considered. 

In recognition of the specific nature of banking and insurance activities, special rules apply to the 

calculation of turnover for credit and financial institutions and insurance undertakings. 

The GVH must reach a decision during phase one proceedings within 45 calendar days after the 

complete application form is received, whereas phase two proceedings 4 can last as long as 120 

calendar days from the receipt of the complete application form. The phase one deadline may be 

extended once by a further 20-day period, whereas the deadline set for the completion of phase 

two proceedings is extendable in the discretion of the GVH by up to 60 calendar days. 

4) The simplified or phase one procedure is for cases that do not raise substantive competition concerns (i.e., there is no 

concentration within the meaning of the law or the concentration remains below the statutory thresholds; or the approval 

apparently cannot be refused by the merger control authority). 

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The Hungarian merger control regime is based only on turnover. If the notification thresholds are 

not reached, the GVH’s prior approval will be not required. 

Minority squeeze-out/sell-out (put) 

The right to buy out minority shareholders (squeeze-out) is available to a Bidder who (i) declared 

in the offer its intention to exercise the squeeze-out option, (ii) controls 90% or more of 

the voting shares of the target company within three months after the closing of the Acceptance 

Period and (iii) verifies that it has the required financial capability. 

A squeeze-out can be effected within three months from the closing of the Acceptance Period by 

publishing a notice in which the Bidder indicates (i) the place, time and delivery of the shares, (ii) 

the price and (iii) the conditions of payment. Any shares not delivered by minority shareholders 

within the time-frame set out in the notice will be canceled and new shares issued to the Bidder. 

The purchase price in case of squeeze-out is equal to the purchase price stipulated in the original 

tender, or the equity per share (nominal value), whichever is higher. 

The right to sell-out (put shares to the majority shareholder) is available for minority shareholders 

if the Bidder acquires more than 90% of the voting shares. If requested by the minority shareholders, 

the Bidder is obliged to purchase all remaining shares in the target at the same purchase 

price as applies to a squeeze-out. Such a request must be filed within 90 days after the Bidder 

notifies HFSA and the target that it has acquired 90% of the shares of the target. 

Numerous complaints have been submitted to the Hungarian Court of Constitution by minority 

shareholders in connection with squeeze-outs, claiming a violation of their constitutional rights 

(expropriation). The Constitutional Court, in a decision in February 2007, held that in a community 

of shareholders every member had the same level of constitutional protection and therefore 

no shareholder may be required to remain within this community. Minority shareholders have 

the above-mentioned “Sell-out right” allowing them to step out of the company in case they find 

themselves part of an “unwanted community”; therefore, the majority shareholder has to have 

a parallel right – the “squeeze-out” right, allowing it to terminate the community of shareholders 

and enjoy all rights and possibilities arising from sole ownership. 

Breakthrough rule 

During the implementation of the Directive, the Hungarian government did not implement the 

second option of the option model set out in Section 13 of the Directive. Therefore, the “breakthrough 

rule” is only applied when a corporate decision to that effect has been adopted.

Takeovers in Romania 


Bryan Jardine and Adelina Iftime 

Wolf Theiss, Bucharest 

The information contained in this article on takeovers in Romania was correct as of 1 June 2008. 


takeovers in Romania, please contact: 

Bryan Jardine 

Wolf Theiss si Asociatii SCA 

Bucharest Corporate Center Building 58-60 

Gheorghe Polizu St., Floor 13, Sector 1 

Bucharest 011062 

Romania 

Tel.: +40 21 3088 - 100 

Fax.: +40 21 3088 – 125 

Email: bryan.jardine@wolftheiss.com 

David Ayres 



186 00 Prague 8 


Tel.: +420 234 765 – 111 

Fax.: +420 234 765 – 110 


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The Capital Markets Law 115 




Takeover bids 119 


Restrictions on the bidder and the target management following the 



Timetable for a takeover bid 123 




Introduction 


“Takeover” is a legal concept that, under Romanian law, only applies to companies that are traded 

on regulated markets and are therefore subject to the capital markets regulatory framework (that are 

public companies). 

The only regulated market in Romania currently dealing with shares and other securities issued by 

public companies is the Bucharest Stock Exchange (BSE). 

The authority supervising the takeover process on the regulated markets is the National Securities 

Commission (Comisia nationala a Valorilor Mobiliare) (NSC). 

Since only public companies are currently subject to takeovers and the capital market in Romania is 

still in its early stages, takeovers are not very frequent in Romania. However, the prospective development 

of the capital markets in Romania, and the country’s recent accession to the European Union, 

may lead to an increase in the number of takeovers. 

The Capital Markets Law 

Takeovers in Romania are regulated by the Romanian Law on Capital Markets no. 297/2004 (legea 

pietei de capital) (the Capital Markets Law) as well as secondary enactments. 

The most important secondary enactment is Regulation no. 1/2006, relating to public companies and 

transactions involving securities (Regulamentul nr. 1/2006 privind emitentii si operatiunile cu valori 

mobiliare) (Regulation no. 1/2006). 

The Capital Markets Law and Regulation no. 1/2006 comprise special chapters dealing with public 

offers, including takeovers. The provisions concerning takeovers implement part of the provisions of 

Direc-tive 2004/25/EC on takeover bids. There is no special law exclusively concerning public offers 

or takeovers. 

An amendment to Regulation no. 1/2006, currently under discussion, would make changes to (i) the 

squeeze-out procedures, (ii) the content of the file to be submitted to the NSC for the approval of a 

takeover bid and (iii) the cases when the price in a mandatory takeover bid is to be determined based 

on an assessment made by an independent evaluator. 

• To whom do the takeover rules apply? 

The takeover rules apply to both Romanian and foreign companies traded on the Romanian regulated 

markets. 

If a company is traded on regulated markets in more than one jurisdiction, then the Romanian capital 

markets framework will apply if the company was first admitted to trading on a Romanian regulated 

market. If the listing process occurred simultaneously on regulated markets in more than one EU jurisdiction, 

then the applicable law will depend on which country was designated the company’s Home 

Country. The law of the jurisdiction where it was incorporated will in any case remain applicable to 

some extent. 

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Under Romanian law, a company does not become a public company automatically, but only following 

its request and subject to fulfilling the conditions provided by law. 

• When do the takeover rules apply? 

There are two types of bids under Romanian law: purchase bids and takeover bids. A takeover bid 

can take the form of either a voluntary bid or a mandatory bid. Below please find an overview of each 

of these bids. 

A purchase bid is a bid addressed by public means to all shareholders of a public company for the 

purchase of a stake in the share capital of that company. The purchase bid must be made thorough an 

intermediary authorized to provide investment services. If, by means of the purchase bid, the bidder 

intends to surpass the 33% threshold of the voting rights within the target company, the purchase bid 

becomes a takeover bid regulated by different rules. A mandatory takeover is a takeover bid compulsorily 

addressed to all shareholders in a company for all of their shareholdings within two months from 

the date on which the 33% voting rights threshold is exceeded. 

As a general rule, the definitions above contemplate individual shareholdings as well as concerted 

shareholdings (i.e. common control over certain share capital thresholds). According to the Capital 

Markets Law, a concerted shareholding involves a situation in which several persons enter into an 

agreement, expressly or implicitly, for the purpose of following a common goal with respect to a public 

company. Some persons and situations are deemed by law to create a concerted shareholding; 

some examples include: (i) persons who control or who are under the control of a public company, or 

persons under common control; (ii) persons who are, directly or indirectly, parties to an agreement for 

the pursuit of a common voting strategy, provided that the shares subject to the agreement may grant 

control over such company; (iii) individuals with managerial or controlling positions within the public 

company; (iv) persons who have the power to appoint most of the members of the board of directors 

of a public company; (v) the parent company and/or its subsidiaries; and (vi) the public company and 

the members of its board of directors. 

• To what kinds of acquisitions do the takeover rules not 

apply? 

The rules governing takeover bids do not apply to purchase bids to acquire shares that, together with 

the shares previously owned by the bidder, do not exceed 33% of the voting rights within the target 

company. 

The Capital Markets Law also exempts certain events that would otherwise require a mandatory 

takeover bid. An entity is not obligated to issue a mandatory takeover bid if it has exceeded the 33% 

threshold limit but: 

• the securities were legally acquired before the entry into force of the current regulations 

(however, the mandatory provisions concerning takeover bids are reactivated when the 

50% threshold is exceeded); 

• the securities were acquired following a privatization; 

• the securities were acquired from the Ministry of Public Finances or another competent 

entity during the process of enforcing receivables held by the state; 

• the securities were acquired following the transfer of shares between or among a parent 

company and its subsidiaries, or between or among the subsidiaries of the same parent company; or 

• the securities were acquired following a voluntary takeover bid. 

In addition, if the 33% threshold was exceeded involuntarily, the shareholder may either (i) issue a


mandatory takeover bid or (ii) dispose of the shares that exceed the threshold. The shareholder must 

select and follow one of these alternatives within three (3) months after exceeding the threshold. 

Exceeding the 33% limitation set forth by the law is considered involuntary if it occurred due to: (i) a 

decrease in the share capital through a purchase by the company of its own shares followed by their 

cancellation; (ii) exercise of a right of first refusal, subscription, or conversion as well as the exchange 

of preferred shares for ordinary shares; (iii) a merger/spin-off; or (iv) inheritance. 


When exceeding or dropping below the 5%, 10%, 20%, 33%, 50%, 75% or 90% thresholds due to the 

sale or purchase of securities issued by a public company, the owner of such securities is obligated to 

notify, within three (3) business days, the company issuing the securities, the NSC, and the regulated 

market. The target company shall also inform the public within no more than three (3) business days. 


A bid for the shares of a public company must follow the rules of the regulated market. The bidder prepares 

the bid and submits it to the public. The shareholders of the target company may either accept 

or reject such bid, without any reservations. 

If the parties enter into pre-agreements/agreements related to the shares, such pre-agreements/ 

agreements will not fall within the regulatory framework of the capital markets and their enforceability 

within the capital markets might be limited. 

Outside of the context of a takeover bid, it should be possible for a bidder to acquire a majority stake 

in the target from a controlling shareholder (where one exists) through negotiation. A bidder might 

also use a combination of “cross” and “deal” transactions on the BSE in order to effectuate a transfer 

agreed in advance with a willing seller. A bidder might also participate in a “selling offer” on the 

Romanian capital markets. One of the objectives of the current draft amendment to Regulation no. 

1/2006 is to facilitate these simplified selling offers in order to bring the Romanian provisions in line 

with current interpretations of relevant EU Directives. 

After acquiring a controlling stake, the purchaser will be compelled to start a mandatory takeover bid. 

All shares exceeding the 33% threshold will be suspended until the mandatory takeover bid procedures 

are fulfilled. 


Any interested person may obtain information about any company — either public or non-public — 

from the trade registry, and copies of all documents submitted by such company to the trade registry 

may be obtained. Such information and documents may cover areas such as: 

• the company‘s articles of association; 

• all amendments to the company’s articles of association; 

• all decisions of the general meeting of the shareholders; 

• details on the shareholders; 

• details on the directors/members of the board of directors; 

• details on subsidiaries; and 

• details on current insolvency or dissolution proceedings. 

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The resolutions of the general meetings of the shareholders may also be obtained from the Official 

Gazette of Romania in which they must by law be published in order to render them enforceable 

towards third parties. 

Moreover, according to Law no. 31/1990 on trade companies (legea Societatilor Comerciale) (the 

Company Law), one or more shareholders holding at least 10% of the company’s share capital 

are entitled to request that the competent court appoint one or more experts to draft a report on 

the management of the company. This report shall be submitted to the company’s censors/internal 

auditors and administration. The report will be included on the agenda of the following general 

meeting of shareholders. As a general rule, the costs of the expert advice are paid by the audited 

company. This procedure may be used exclusively by persons/entities that are already shareholders 

of the target company. 

Given the fast and frequent changes in the shareholdings of public companies, the shareholder 

registers of such companies are kept by specialized register companies. The transfer of an ownership 

right occurs upon its registration in the shareholder register. According to the Company Law, 

the shareholder registers are public; therefore, the register company should present the current 

status of the shareholdings to any person filing an application. 

The company must ensure equal treatment for all shareholders holding shares of the same class. 

The company also must ensure that all the necessary facilities and information are available to 

enable the shareholders to exercise their rights. 

In addition, public companies have specific disclosure duties. 

• Any amendment to the articles of association must be submitted both to the NSC and to the 

regulated market. 

• Any event that has occurred within the company’s life that might lead to changes in the 

share price or that might in any way alter the financial status of the company must be 

made available to the public within forty-eight (48) hours, at the latest. The NSC may 

request that the public company make public any additional information necessary 

to properly inform the public. 

• The administration of the company is obligated to make available information relating 

to the material agreements concluded by and between the company and its directors, 

employees, controlling shareholders and any other affiliated persons. 

• Public companies must provide the public with information about their financial status 

by publishing financial reports quarterly, biannually, and annually. The financial status 

must be presented comparatively with the same period of the preceding fiscal year. As 

a general rule, the consolidated financial statements, if applicable and available, must 

also be submitted to the public. The annual financial statements approved by the general 

meeting of the shareholders must be accompanied by the auditor’s report. The audit of the 

financial statements of public companies is mandatory. Such external audit may 

give the bidder some level of comfort. 

• Other disclosure duties may be imposed on public companies by the regulated 

market where their shares are traded.


In any case, all disclosures must observe the provisions on privileged information, market manipulation, 

and insider trading. For example, any person holding inside information of the target is prohibited 

from using such information when purchasing or selling securities, either for its own use or for the 

use of a third party. Furthermore, in order to prevent the occurrence of any insider trading during the 

voluntary takeover bid process, persons with managerial functions within a public company and their 

affiliates are obligated to inform the NSC of any transactions in which they are involved that affect the 

securities of the managed company. 

Takeover bids 

The rules presented below are applicable to voluntary and mandatory takeover bids. Note that some 

steps below only apply to voluntary bids (i.e., publication of a takeover intent, seeking the reaction of 

the target’s board, etc.). 

• Takeover intent and other preliminary steps (applicable 

exclusively to voluntary takeovers) 

The bidder must submit to the NSC a takeover intent containing information about the intentions of the 

bidder with respect to the target company, including with respect to the employees and the management 

of the company, the company‘s liquidation, expected changes to its business, and its possible 

delisting. 

Following the approval of the takeover intent by the NSC, the bidder must publish its takeover intent in 

the press and deliver the takeover intent to the target company and to the regulated market. 

The management of the target company must inform the company’s employees and must request 

their opinion. In some circumstances, the employees are informed directly by the bidder. Also, the 

management of the target company shall communicate its opinion on the bid to the NSC, the regulated 

market, and the bidder. The board of directors of the target company may convene an extraordinary 

general meeting of shareholders in order to inform the shareholders of its opinion on the bid. The 

convening of a general meeting at the request of a significant shareholder is mandatory for the board 

of directors. 


The bidder will submit to the NSC the offer, the preliminary announcement that will be used further for 

disclosing the offer, and any other documents prescribed by law. 

A takeover bid must include, among other things, the items below: 

• details on the target company; 

• details on the bidder and the persons acting in concert with the bidder; 

• the object of the bid; 

• the price; 

• details on the financing of the bid; 

• the bid term; 

• payment procedures; 

• the distribution procedure if there is an oversubscription; 

• the plans of the bidder with respect to a potential change in the management, liquidation of the 

company, planned changes in the target’s business, and delisting from the regulated market; 

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• financial information about the bidder, if a legal person; 

• potential decrease in the number of employees, as well as the strategic development plans of the 

bidder and of the target company that might influence the employment policies of the target. 

According to the Capital Markets Law, information must be provided by the bidder in a complete, exact 

and thorough manner. 

• Approval by the nSC 

The NSC needs to approve the bid within ten (10) business days, at the latest, from the submission. 

Any request for additional information shall void this term, and a new ten (10) business day term shall 

commence again following the submission of such additional information. The NSC may request additional 

information and/or documents from the bidder, the persons or entities controlling or controlled 

by the bidder, the bidder’s auditors and managers, or the financial intermediary, provided that such 

information and/or documents are necessary for the appropriate protection of investors. 

• Disclosure of bid 

The existence of the bid shall be disclosed to the public by publishing a preliminary announcement 

that indicates where and how shareholders may obtain the bid documentation. Simultaneously, the 

authorized bid will be submitted to the regulated market on which the securities of the target company 

are traded. 

On the date of publication of the preliminary announcement, the bid becomes mandatory and the bid 

documentation must be made available to the public. 

The bid must be initiated no later than three (3) business days following the publication of the preliminary 

bid announcement and no later than ten (10) business days after its approval by the NSC. 



The price offered in a voluntary takeover bid must be at least equal to the highest of the following 

prices: (i) the highest price paid by the bidder or by persons with whom it was acting in concert during 

the twelve (12) months preceding the date of the submission of the offer to the NSC; (ii) the medium 

transfer price on the regulated market (calculated in accordance with specific rules) for the twelve 

(12) months preceding the date of the submission of the offer to the NSC; and (iii) the value of the net 

assets per share, according to the last financial statements of the issuer. 

As a general rule, the price for a mandatory takeover bid shall be the highest price paid by the bidder 

or by persons with whom it was acting in concert during the twelve (12) months preceding the date of 

the submission of the offer to the NSC. If this rule cannot be followed, the price shall be the highest 

of the prices determined according to the other two price determination criteria described above or, if 

higher, the price determined by an expert valuation made in accordance with international valuation 

rules. Regulation no. 1/2006 sets forth the detailed rules for such an appraisal. 

Special rules for establishing the price in competing bids are also provided by law. 

A bidder may offer securities issued by public companies as consideration for the shares that are the


subject of the takeover bid. However, the bidder must always offer a cash price as well, since the sellers 

must always have the option to choose between cash and shares in an exchange offer. A mixture of the 

above payment methods is also permitted by law. 

• Bid term 

The offer must remain open for at least fifteen (15) business days and cannot be longer than fifty (50) 

business days. The duration of the bid may be extended if the bid is amended. The duration of the bid 

shall be extended so that the prospective sellers have at least five (5) business days to accept the 

revised bid. 


Conditions to an offer are limited: 

• The bidder should be able to provide that the success of the bid is conditional upon reaching 

a certain threshold in the share capital of the target, although no express provision allowing or 

prohibiting this exists; 

• No financing condition is permitted. On the contrary, the bidder must include, in the takeover bid, 

information about the financing of the bid. In order to receive the NSC’s authorization, the bidder 

must submit to this regulatory authority, among other things, proof of the deposit of an amount of 

at least 30% of the aggregate value of the bid into a bank account of the intermediary, or a bank 

guarantee for the entire value of the bid, issued for the benefit of the intermediary; 

• If the bid leads to an economic concentration or might lead to an economic concentration, the 

Competition Council (Consiliul Concurentei) (the Competition Council) will be notified. The 

bid procedures may proceed and even be finalized before obtaining the response of the Competition 

Council. However, no irreversible measure (i.e., changing directors and managers in 

order to direct the competition-related behavior of the company, selling assets or property of the 

target, etc.) may be undertaken until the official response of the Competition Council is received. 


The bid is irrevocable during its duration. 


The bidder can revise its bid only by: (i) offering a higher price or more favorable terms; and (ii) obtaining 

the relevant approval of the NSC. 

In the case of a voluntary takeover bid, the bidder or the person(s) with whom it is acting in concert are 

allowed to purchase, during the bid, shares outside of the framework of the bid, but they must revise 

the price in the offer so that such price reflects the maximum price paid by the bidder outside of the 

public bid. 

The amendment of the bid shall be submitted to the NSC for approval at least seven (7) business 

days prior to the deadline of the offer. If the amendment is approved, the NSC may postpone the 

deadline of the offer so that the receiver of the amended offer has at least five (5) business days 

to accept it. 

1 1

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management following the announcement 


Once a voluntary takeover bid has been announced, and until it has been concluded: 

• The bidder may acquire target shares other than through the takeover bid, but it must amend the 

price in the offer, as mentioned above. 

• Once information on the voluntary takeover bid has been received, the target (i.e., its board of 

directors) must refrain from taking any action that might frustrate the bid or negatively affect the 

business or assets of the company, unless they have the prior approval of the extraordinary 

general meeting of shareholders. This might include actions such as increases in share capital, 

the issuance of new shares granting the right to subscription or to conversion into shares, establishing 

encumbrances on shares, etc. However, if a decision was made prior to the takeover 

intent being published, but was only partly implemented, the target may continue freely 

with its implementation. 

• The board of the target must keep the NSC and the regulated market informed of all transactions 

by the board members and the executive management in the shares that are subject to the bid. 


A rival bidder may make another offer for the same securities only if this offer envisages reaching at 

least the same threshold of the share capital of the target company and includes a price increase of at 

least 5%. In order to determine the winning bidder, an auction shall take place under the management 

of the NSC. The applicable regulations expressly provide that the participants in the auction shall be 

considered holders of privileged information until the disclosure of the highest price offered, and any 

use of this information is subject to punishment. 

A rival bidder has access to information about the target company under the same conditions as all 

other interested persons, according to the disclosure procedures provided by law. In the event that 

additional information is provided by the management of the target company, such information should 

be equally disclosed to all bidders.

Timetable for a takeover bid 


Preliminary steps 

Bid’s authorization 


• contracting for financial intermediary services with an 

entity authorized to act as an intermediary on capital 

markets 

• if so desired, contracting for investment consultation 

services, financial services and/or legal services with 

respect to the envisaged bid; contracting for the services 

of an assessment expert is mandatory when estimation 

of the price according to the other criteria provided by 

law is not possible 

• if the bid may lead to an economic concentration according 

to the applicable competition regulations, the 

bid may be subject to notification to the Competition 

Council as an economic concentration 

• submission to the NSC for approval of the takeover intent 

(only for voluntary takeovers) 

• approval of the takeover intent by the NSC (only for 

voluntary takeovers) 

• publication of the takeover intent in the written press 

and delivery of the takeover intent to the target company 

and to the regulated market (within five (5) business 

days from its approval by the NSC) (only for voluntary 

takeovers) 

• in certain situations, delivery of the takeover intent to 

the employees of the target company; in other cases, 

the employees shall be informed by the board of directors 

of their employer (only for voluntary takeovers) 

• reaction of the board of directors of the target company, 

to be delivered to the NSC, the bidder and the regulated 

market within five (5) days from receipt of the takeover 

intent; the employees of the target company must also 

be informed of the board‘s position on the intended 

takeover (only for voluntary takeovers) 

• the convening of the general meeting of shareholders 

of the target company (optional); the convening is mandatory 

if requested by a significant shareholder (only for 

voluntary takeovers) 

• submission to the NSC of the bid of the preliminary 

announcement and the other documents prescribed by 

law; in case of voluntary bid, the filing of the authorization 

is mandatory within thirty (30) days from publication of 

the takeover intent; in the case of a mandatory bid, the bid 

must be initiated within two (2) months after exceeding 

the relevant threshold 

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Bid’s disclosure 

Start of the bid 

Closing of the bid 

• submission to the NSC of proof of the financial warranties 

(submission with a bank account or bank guarantee) 

• approval of the bid by the NSC within ten (10) business 

days at the latest after the submission (any request for 

additional information shall stop this term; a new ten (10) 

business day term shall start again following the submission 

of such additional information) 

• submission of the authorized bid to the regulated market 

on which the securities of the target company are traded 

• the bid shall be disclosed to the public by publishing a 

preliminary announcement 

• the bid shall start within ten (10) business days from the 

issuance of the NSC‘s authorization 

• the bid shall start no earlier than three (3) business days 

from the publication of the preliminary announcement 

• the bid‘s duration shall be decided by the bidder among 

the limits set forth by law (minimum fifteen (15) business 

days and maximum fifty (50) business days) 

• the duration of the bid may be extended if the bid 

is amended. The NSC shall approve the amendment 

within seven (7) business days at the latest 

from its submission. The amendment shall also be disclosed 

to the public. The duration of the bid shall be 

extended so that the prospective sellers have at least 

five (5) business days to accept the revised bid 

• the NSC is entitled, in certain situations, to suspend the 

bid for ten (10) business days at the most for each 

suspension reason 

• the NSC is entitled to revoke its authorization 

decision or to cancel such authorization 

• the payments related to the subscriptions within the bids 

shall occur within three (3) business days from the 

settlement of the transaction 

• within seven (7) business days at the latest following 

the closing of the bid, the bidder must deliver to the NSC 

and to the regulated market a notice concerning the 

results of the bid 

• the notice concerning the results of the bid shall be 

published on the website of the regulated market



The NSC supervises all public aspects of the takeover process, including such things as determining 

whether there is an obligation to carry out a takeover bid, determining whether the participants in a 

takeover are acting in concert or even suspending or annulling the bid. 



A transaction qualifies as a concentration if: 

• two or more previously independent undertakings merge; or 

• one or more persons already controlling at least one undertaking acquires — whether through the 

purchase of securities or assets, by contract or by other means — direct or indirect control of all or 

a part of another undertaking or undertakings. 

The Competition Council is the competent authority for implementing the Competition Law. 

A concentration must be notified to the Competition Council if: 

• the aggregate annual turnover of all undertakings concerned exceeds the RON equivalent of 

EUR ten (10) million, and 

• there are at least two undertakings involved in the transaction that individually achieve a turnover 

higher than the RON equivalent of EUR four (4) million. 

Furthermore, the instructions issued by the Competition Council on 29 April 2004 regulating the computation 

of turnover in cases involving concentrations also provide that the international operations 

of a concentration fall within the jurisdiction of the Competition Council if: (i) the worldwide aggregate 

turnover of the involved undertakings exceeds EUR ten (10) million; and (ii) there are at least two undertakings 

involved in the concentration whose individual turnover obtained in Romania each exceeds 

EUR four (4) million. 


A squeeze-out envisages a case in which, following a previous bid, the bidder (i) owns more than 95% 

of the share capital or (ii) acquired, during the previous bid, more than 90% of the shares envisaged 

by the bid, offers the shareholders that did not sell their shares during the previous bid (the minority 

shareholders) the option to exit the company by selling such residual shares. 

Romanian law also provides for the reverse situation, namely the right of a minority shareholder to request 

that the majority shareholders owning more than 95% of the company‘s share capital purchase 

its shares in exchange for a fair price. 

Both of these rights are to be exercised within three (3) months following the closing of the offer. 

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Takeovers in Romania

Takeovers in Serbia 

Branislav Marić, 

Attorney at law, Belgrade 

and 

David Ayres 



The information contained in this article on takeovers in Serbia was correct as of 1 June 2008. 


takeovers in Serbia, please contact: 

Miroslav Stojanovic 

Wolf Theiss d.o.o. Beograd 

PC Ušće Bulevar Mihajla Pupina 6 

11070 Novi Beograd 

Serbia 

Tel.: +381 11 3302 - 900 

Fax.: +381 11 3302 – 925 

Emaill miroslav.stojanovic@wolftheiss.com 

David Ayres 



186 00 Prague 8 


Tel.: +420 234 765 – 111 

Fax.: +420 234 765 – 110 


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Timetable for a mandatory bid 134 




Introduction 


The number of public takeover bids for Serbian companies has increased steadily over the past 

few years. In 2003, the Serbian Securities Commission (the SEC) approved 33 bids; this increased 

to 62 in 2004, 137 in 2005, 104 in 2006, and 105 in the first three quarters of 2007. 

Although there is no publicly available data from official sources, it appears from press reports 

that almost all of the transactions have involved friendly takeovers, with only a few hostile takeovers 

to date. 


The Serbian Law on Takeovers of Joint-Stock Companies (the Takeover Act) became effective 

on 10 June 2006. Prior to the adoption of the Takeover Act, rules concerning takeovers were 

contained within the law that was regulating the area of securities. Consequently, the Takeover 

Act is the first systematized legislation in this field. 


The Takeover Act applies to all joint stock companies that have their registered seat within Serbia, 

provided that their shares have been traded on an organized market for securities within 

Serbia (currently only the Belgrade Stock Exchange) for a period of at least 3 (three) months 

prior to the publication of the Notification of Takeover Intent. 


The Takeover Act regulates both mandatory and voluntary bids for shares of joint stock companies. 

However, once a person decides to make a voluntary bid, the relevant procedure is identical 

to that for mandatory bids. The Takeover Act requires a mandatory bid to be made for all of 

the shares in a company in the following three situations: 

• Once a person obtains shares that, together with the shares that the person already owns, 

represent more than 25% of the overall number of votes carried by the target’s 

voting shares; 

• In the event the initial takeover bid procedure results in the acquisition of less than 75% of the 

company’s voting shares, the bidder must launch a new takeover bid procedure for any 

further increase of his/her/its stake in the company; and 

• When as a result of a takeover bid a shareholder acquires 75% or more of the target’s 

voting shares, he/she/it must pursue a new takeover bid each time he/she/it has acquired 

an additional: (i) 5% of voting shares following a takeover bid process, or (ii) an additional 

3% of voting shares within any 18 (eighteen) consecutive-month period. 

• To what kinds of acquisitions does the Takeover 

Act not apply? 

The Takeover Act does not apply, inter alia, to an acquisition of shares that: 

• does not trip the 25% threshold; 

• represents a “passive acquisition” that trips the 25% threshold, including acquisitions of shares 

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by inheritance, by a division of marital assets, as a creditor in bankruptcy proceedings, or 

through a merger of two companies, where only one of the merging companies held target 

shares before the merger; 

• is only temporary in the course of underwriting or re-sale on the organized market, provided 

that the underwriter does not exercise voting rights on the basis of such shares; 

• results from a restructuring within a holding or acquisition of shares in a related party; or 

• represents a privatization of shares previously held by the Republic of Serbia in banks, 

insurance companies, and other commercial entities. 

It is unclear if it is possible under Serbian law to launch a public bid to acquire less than 25% of 

the shares of a Serbian company. The Takeover Act does not address the question and there 

appears to be no practice in the area. In theory, a public bid to acquire less than a 25% shareholding 

in a target should not be subject to the Takeover Act. 


The Takeover Act provides that an acquisition of shares representing 25% of voting rights in a 

company triggers the same notification requirements as the acquisition of shares that trigger a 

takeover bid obligation (i.e., notification to the organized securities market, the target, and the 

SEC). 

Acquisitions of shares at levels below (as well as over) the thresholds triggering a mandatory 

takeover bid may need to be reported. Namely, under the Law on Market for Securities and Other 

Financial Instruments (the Securities Market Act), an individual or a legal entity that directly or 

indirectly acquires (i.e., separately or together with his/her/its related parties) shares of a joint 

stock company, which acquisition results in the shareholder’s achieving or exceeding a threshold 

of 5%, 10%, 25%, 33%, 50%, 66%, 75% or 95% of voting rights, must inform the SEC, the issuer, 

and the Commission for Competition Protection (the Competition Commission) in writing 

within 3 (three) days after the acquisition. A similar notification obligation applies to a shareholder 

whose shareholding drops below any of such thresholds as a result of a disposal of shares. 

The share ownership report may trigger buying activity in the target’s shares. 









Care must be taken not to inadvertently trip the obligation to launch a takeover bid by entering 

into a binding and final share purchase agreement. Under the Takeover Act, even if an agreement 

for the purchase of over 25% of an issuer’s shares is subject to standard conditions precedent, 

it can be deemed to constitute a legal transaction that triggers the obligation to publish a 

takeover bid, as well as file a request for an approval by the Competition Commission.




the publicly available information about many Serbian joint-stock companies is quite limited. 

In a negotiated transaction, therefore, it is common for the majority shareholder of the target 

to provide extensive information about the target, either directly or by encouraging the target 




A bidder must take care not to violate the insider trading provisions contained in the Securities 

Market Act. After receiving unpublished material inside information from the target, the bidder 


information. 



Immediately after acquiring the relevant number of voting shares that triggers an obligation to 

launch a takeover bid process, the acquirer must inform simultaneously the relevant organized 

market where the shares of the target company are traded, the SEC, and the target company 

about such acquisition. The notification contains very limited information about the bidder, the 

target, and the bidder’s shareholdings in the target. The notification must also contain information 

regarding persons acting in concert with the bidder and their respective shareholdings in 

the target. 

Furthermore, within 1 (one) business day after the day on which the obligation to launch a takeover 

bid has arisen, the bidder must publish a Notification of Takeover Intent in one daily newspaper 

that covers the whole territory of the Republic of Serbia and has a circulation of at least 

100,000 copies. In addition to the information contained in the notification to the SEC, the target 

and the securities market, the Notification of Takeover Intent contains some additional information, 

such as the information on the number of shares that the prospective bidder intends to 

acquire. 

• Takeover bid 

In the takeover bid, the bidder has a duty to provide details that enable shareholders to decide 

whether and under which conditions they want to sell their shares to the bidder. The offer document 

must not contain data that may create an erroneous impression among the target’s shareholders 

concerning the target’s financial and legal position and the value of its shares. 

• Approval by agency 

The bidder is obligated to submit the takeover bid, as well as some other documents, to the SEC 

within 1 (one) business day from the day on which the obligation to launch a takeover bid has 

arisen. The Takeover Act provides that a general deadline for the SEC to issue its approval of the 

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takeover bid is 2 (two) business days. However, this period can be extended up to 10 (ten) days 

in the event the SEC needs to consult with relevant anti-monopoly, anti-money laundering, or 

other bodies with a view to preventing disturbances on the organized market for securities. 

• Publication of bid 

The bidder must publish the short-form takeover bid immediately after receiving the SEC’s approval 

of the takeover bid. The publication is made in one daily newspaper that covers the whole 

territory of the Republic of Serbia and has a circulation of at least 100,000 copies. The bidder 

must immediately submit to the SEC a copy of the published short-form takeover bid. 

The bidder must also submit, not later than on the day on which it orders the publication of the 

short-form takeover bid in the newspaper, a copy of the approved takeover bid to: 

• the target company; 

• the relevant organized market where the shares of the target company are traded; and 

• all shareholders of the target company (the names and addresses are entered in the Serbian 

Central Register and broker-dealers have access to this information). 


The target is not required to provide any information to the bidder nor any information for inclusion 

into the bid. However, within 7 (seven) days following the bid’s publication, the target 

company’s Management Board is required to publish its opinion with respect to the takeover bid, 

and state the factors that support such opinion, in the same manner as the takeover bid was 

published (i.e., in one daily newspaper that covers the whole territory of the Republic of Serbia 

and has a circulation of at least 100,000 copies). In addition, within the takeover bid period, the 

target company’s Management Board is authorized to call for a counter-bid. 


• PURCHASE PRICE – STARTING FORMULA 

The offered price for the target company’s shares may not be lower than the weighted average 

price of the target’s shares during the three-month period ending on the day prior to the date of 

publication of the Notification of Takeover Intent, determined on the basis of reports on trades 

on the organized market. 

• PURCHASE PRICE – FIRST ALTERNATIVE 

In the event the last market price of the target company’s shares selling on the organized market 

one business day prior to publication of the Notification of Takeover Intent is higher than the price 

calculated pursuant to the starting formula, the bidder must offer the higher price. 

• PURCHASE PRICE – SECOND ALTERNATIVE 

If the bidder, or persons acting in concert with the bidder, have acquired, prior to the publication 

of the takeover bid, shares of the target company at a price which is higher than the prices determined 

under the starting formula or the first alternative price formula, the bidder is required to 

offer to the target company’s shareholders: (i) the highest price at which the bidder has acquired 

the shares within the last 12 (twelve) months; or (ii) an average of the price at which the bidder


acquired shares of the target company during the 2 (two) years prior to the publication of the 

Notification of Takeover Intent, if during that period the bidder has acquired at least 10% of the 

target company’s shares, provided that this price is higher than the price referred to in point (i) 

above. 

• BID TERM 

The minimum takeover bid term is 21 (twenty-one) days, while the maximum is set at 45 (fortyfive) 

days. However, the latter period can be extended due to changes in the takeover bid or as 

a result of a counter-takeover bid. In the former case, the takeover bid’s duration is extended for 

7 (seven) days, but the absolute bid duration period may not be longer than 60 (sixty) days. In 

the case of a counter-takeover bid, the total period of validity for both the original bid and the 

subsequent counter-bid(s) cannot exceed 70 (seventy) days. 

• CONDITIONS 

Permitted conditions to an offer are extremely limited. The Takeover Act only permits, as a condition 

to an offer, an indication of the minimum number of shares that can be acquired. Bids cannot 

be limited with respect to the maximum number of shares that can be acquired. 

• WITHDRAWAL 

A bidder can withdraw his/her/its bid only due to the following reasons: (i) publication of a counter-bid 

with a higher share price; or (ii) the target company’s bankruptcy. 

• AMENDMENTS 

A request for takeover bid amendments must be filed not later than 3 (three) business days prior 

to the expiration of the bid, and may not seek to decrease the previously offered purchase price 

or the manner and deadline for its payment. Proposed amendments may only improve the offer 

by, for example, increasing the offer price or eliminating conditions contained in a conditional 

takeover bid. The SEC issues its decision on the proposed amendment within 1 (one) business 

day from the day of receipt of a complete request for approval of such amendment. 




From the moment on which the obligation to launch the takeover bid has arisen (i.e., not from the 

time of publication of the bid) and until the expiration of the bid’s period, the bidder (as well as 

persons acting in concert with the bidder) is prohibited from purchasing or agreeing to purchase 

the target company’s shares in any manner other than the takeover bid. Similarly, the bidder must 

not sell or agree to sell shares of the target company. 

Following the bid’s publication there is a strict prohibition against the exercise, either directly or 

through advertising, of any influence on the target company’s shareholders by offering or promising 

gifts, services or other benefits. The prohibition extends to the bidder, the target company, 

and the Management Boards and shareholders of both the target company and the bidder (if 

applicable), as well as to third parties. 

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Furthermore, from the moment of publication of the Notification of Takeover Intent until the completion 

of the takeover bid process, the target company’s Management Board may not: 

• increase the target company’s share capital; 

• prompt the target company to undertake extraordinary actions or enter into an agreement that 

would alter significantly the status of the target company’s property or liabilities; 

• prompt the target company to buy or sell treasury shares; or 

• publish a takeover bid for another company. 

Timetable for a mandatory bid 


(i) Obligation to announce 

the acquisition of a controlling 

interest of more than 

25% (or another statutory 

threshold) in the target to 

the SEC, the relevant organized 

market, and the target: 

(ii) Obligation to publish a 

Notification of Takeover 

Intent: 

(iii) Obligation to file the request 

for approval to publish 

a takeover bid and related 

documents (i.e., request 

for approval of the bid): 

(iv) Obligation to seek an 

approval from the Competition 

Commission: 

(v) Obligation to publish a 

short-form takeover bid 


announcement of 

the acquisition of shares 

and publication of the shortform 

bid 

• immediately following the acquisition of more than 25% 

(or another statutory threshold) of the voting shares 

• within 1 (one) business day from the day on which the 

bidder acquired more than 25% (or another statutory 

threshold) of voting shares. 

• within 1 (one) business day from the day on which 

the bidder acquired more than 25% (or another statutory 

threshold) of voting shares. 

• within 7 (seven) days from the day of acquisition of the 

controlling interest. However, in practice, the prospective 

bidder would have to seek an approval from the Competition 

Commission even before he/she/it has acquired the 

relevant shares, since the SEC will not approve the bid unless 

the Competition Commission has previously granted 

its clearance. 

• immediately after receipt of the SEC’s approval of the bid. 

Generally, 3 (three) business days, but can be up to 11 

(eleven) business days if the SEC has to consult with other 

competent bodies (e.g., anti-money laundering bodies) in 

order to issue its approval of the bid.


Prior to submitting an application 

for approval of the 

take-over bid, the bidder 

must: 

Offer launch 

The deadline for the bidder’s 

payment of the purchase 

price to all shareholders 

that tendered their shares: 


• open (i.e., via a broker or other member of the Serbian 

Central Register) a special securities account with the 

Serbian Central Register on which the target company’s 

shareholders will deposit their shares; 

• conclude an agreement with a broker or other member 

of the Serbian Central Register concerning the management 

of a special securities account (i.e., a depot account) 

and the execution of the takeover process; 


bid) to be proposed under the bid terms with the bank on 

a separate bank account, or deposit securities that would 

be used for the payment of the purchase price instead of 

cash, or conclude a loan agreement for the same amount, 

or obtain an irrevocable, first-call bank guarantee for the 

same amount; 

• if the bidder is a foreign person, he/she/it must appoint 

a proxy (i.e., attorney, bank or broker-dealer company) to 

act on its behalf for the purposes of receiving correspondence 

from the SEC; and 

• as part of the submission of the bid to the SEC, submit 

prior approvals from the Competition Commission or other 

competent authorities. 


than 21 (twenty-one) days from the day on which the bid 

was published. However, in case of a bid extension and/or 

a competing offer, the offer can last up to 70 days from the 

day on which the original bid was published. 



+ 7 (seven) days: if the bidder, during the offer term, but 

not later than 3 business days prior to the expiration of the 

bid’s term, improves the bid (i.e., subject to the approval 

of the SEC, offers a higher price per share or waives a 

bid condition in relation to the minimum target threshold), 

provided that the total offer term cannot be longer than 60 

days; 

Within 1 (one) to 3 (three) business days from the day on 

which the bid expired (i.e., from T + 1 to T +3). 

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Publication of the Takeover 

Report by the bidder in the 

same daily newspaper in 

which the takeover bid was 

published, and its delivery to 

the SEC, the target, and the 

relevant securities market: 


shareholders by the Central 

Register: 

Transfer of tendered shares 

to the bidder’s account by 

the Central Register: 


Within 1 (one) business day from the expiration of the 

deadline for the bidder’s payment of the purchase price. 

The same business day on which the Central Register 

receives the cash since the “Delivery versus Payment” 

principle applies. 

The same business day on which the Central Register 

receives the cash since the “Delivery versus Payment” 

principle applies. 

The SEC supervises all public aspects of the takeover process, including such things as determining 

whether there is an obligation to carry out a takeover bid and determining whether the 

participants in a takeover are acting in concert. At any time during the takeover, the SEC may 

request that the target, the target’s shareholders, or any bank, brokerage firm, or other legal entity 

or individual that is involved, make available to the SEC for its inspection all documentation 

that the SEC deems necessary to implement its supervisory activities. 



Under the Law on Competition Protection (the Competition Law), a request for competition 

ap-proval must be filed with the Competition Commission in the event a planned transaction 

will result in a so-called “concentration”. The Competition Law sets out the following minimum 

requirements that must be reached before an obligation to file a request arises: 

• the combined annual income of all concentration participants earned on the Serbian market in 

the course of the previous accounting year exceeds EUR 10 million (calculated in RSD 

counter value at the exchange rate that is in force as of the date of the annual financial statement), 

or 

• the combined annual revenue of all concentration participants earned worldwide in the 

course of the previous accounting year exceeds EUR 50 million (calculated in RSD counter


value at the exchange rate that is in force as of the date of the annual financial statement), 

provided that at least one concentration participant is registered in Serbia. 

If the conditions for filing are met, the applicant must file the request for approval of the concentration 

within 7 (seven) days from the day on which it has: 

• signed the relevant agreement; 

• published a public call or offer; or 

• acquired control. 

The Competition Law further provides that the relevant request may be submitted in the event 

the relevant participants, inter alia, have published information about an intent to make an offer 

for the purchase of shares. 

Depending on whether the request was filed in the context of an expedited or the regular procedure, 

the Competition Commission has a period of one or four months, respectively, to issue its 

approval. 

• What if the thresholds for an obligation to seek an 

approval are not met? 

If the thresholds for an obligation to seek a clearance from the Competition Commission are not 

met, the bidder must declare/confirm this to the SEC in the form of a written statement (the bidder 

risks full criminal and material liability in the event the statement in question is false). 

Since the takeover bid submitted to the SEC for approval must contain, inter alia, the decision of 

the Competition Commission on the intended concentration, the implementation and publication 

of the takeover bid is prohibited until the Competition Commission’s decision has been made. 


In a squeeze-out, the bidder may purchase the remaining shares upon the same price and 

conditions as those that applied to the takeover bid if it has already acquired 95% of the target’s 

voting shares. 

A squeeze-out request must be filed with the Central Register not later than 120 (one hundred 

and twenty) days from the expiration of the ultimate deadline of the preceding takeover bid. The 

bidder must simultaneously inform the remaining shareholders regarding the request, as well as 

publish such information in one daily newspaper that covers the whole territory of Serbia and has 

a circulation of at least 100,000 copies. 

The squeeze-out is executed by the Central Register, upon the bidder’s request, following the 

expiration of 15 (fifteen) days from the day on which the relevant information was published in 

the newspaper. 

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1 

Takeovers in Serbia

Takeovers in Slovakia 


Ľuboš Frolkovič, Petra Hollá and Filip Krajčovič 

Wolf Theiss, Bratislava 

The information contained in this article on takeovers in Slovakia was correct as of 1 June 2008. 


takeovers in Slovakia, please contact: 

Ľuboš Frolkovič 

Wolf Theiss, organizačná zložka 

Laurinská 3 

81101 Bratislava 

Slovak Republic 

Tel.: +421 2 591 012 - 40 

Fax.: +421 2 591 012 – 49 

Email: lubos.frolkovic@wolftheiss.com 

David Ayres 



186 00 Prague 8 


Tel.: +420 234 765 – 111 

Fax.: +420 234 765 – 110 


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The Securities Act 141 











Introduction 


The history of public takeovers in the Slovak Republic has been closely associated with the 

economic development after the change of the political system in 1989. The privatization process 

launched in 1991 enabled the transfer of ownership of state-owned enterprises into private 

hands. One of its most important components, the voucher privatization program conducted 

between 1991 and 1993, contributed substantially to the creation of widespread public share ownership. 

Voucher privatization was followed by direct sales of state property by the government, 

which has still not been completed. 

Since the mid-1990s, public ownership of shares has been increasingly concentrated as a result 

of numerous voluntary and mandatory takeover bids. 

The current Slovak legislation on takeovers provides for both voluntary and mandatory takeover 

offers, for buy-outs of minority shareholders of listed companies (initiated by either minority or 

majority shareholders) and for squeeze-outs in listed companies initiated by majority shareholders. 

Most of the takeover deals have involved friendly takeovers, while hostile takeovers have 

been virtually non-existent. 

The Securities Act 

Takeovers in Slovakia are regulated primarily by the Act on Securities and Investment Services, 

as amended (the Securities Act or the Takeover law). The European Directive 2004/25/EC on 

takeover bids (the Directive) was implemented through the Securities Act, effective on 1 January 

2007. The Takeover law was further amended in November 2007, effective from 1 January 2008. 

• To whom does the Takeover law apply? 

The Takeover law applies to companies whose shares carry voting rights and are listed on a regulated 

market. The Takeover law also applies to the acquisition of securities other than shares, 

where such securities are either a substitute for shares (interim certificates) or convey the right 

to acquire shares (convertible bonds). 

• When does the Takeover law apply? 

A takeover bid, as defined in the Securities Act, is a public offer to enter into one or more agreements 

for the acquisition (through purchase or share exchange) of all or a portion of the shares 

of a target. 

The Takeover law requires a mandatory bid to be made for all of the shares in a company once a 

person (or persons acting in concert) obtains or exceeds a controlling stake in the target. A controlling 

stake is deemed to occur when a person controls 33% of the voting rights in the target. 

The Takeover law regulates both mandatory takeover bids, which the offeror is required to launch 

as a result of its having acquired a controlling stake in the target, and voluntary takeover bids, 

which the offeror chooses to launch in order to acquire a controlling stake in the target. 

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• To what kinds of acquisitions does the Takeover Act not apply? 

The Takeover law does not apply to: 

• takeover bids for securities issued by the EU Member States’ central banks; or 

• takeover bids for securities issued by open-ended investment funds. 

The obligation to launch a mandatory bid does not apply to: 

• a person who has acquired a controlling holding in the target following a voluntary bid made 

in accordance with this law, where such voluntary bid was made for all of the shares in the 

target and was not subject to conditions that would not be permitted for a mandatory bid; 

• the legal successor to a shareholder that fulfilled its obligation to launch a mandatory bid, 

or a legal successor whose aggregate shareholding in the target following the succession is 

no greater than that of the predecessor; 

• a person acquiring shares of the target through an acquisition of another entity if, as a result 

of such acquisition, the aggregate holding of the acquiring person in the target has not 

increased; or 

• a change in the internal structure of a group of persons acting in concert, so long as the 

aggregate holdings of such persons in the target does not change. 


Under the Slovenian Stock Exchange Act, a shareholder who acquires or disposes of shares of 

a listed issuer must notify the issuer and the National Bank of Slovakia (the NBS) if, as a result 

of such acquisition or disposal, the shareholder reaches, exceeds or falls below the threshold of 

5%, 10%, 15%, 20%, 25%, 30%, 50% or 75% of the target’s voting rights. The shareholder must 

notify the issuer within four business days. The percentage of voting rights is calculated on the 

basis of all of target’s shares having voting rights, even if the exercise of such voting rights has 

been suspended. 




• the management of the bidder decides to make a bid; or 

• events occur that oblige the bidder to make a mandatory bid (for example, the bidder acquires 

a controlling stake in the target); or 

• if the general meeting of a listed issuer decides that the shares will be delisted (in which 

special case the issuer is obliged to launch a mandatory bid to purchase all shares from 

shareholders who either (i) did not vote for the decision to delist the shares, or (ii) did not 

attend the general meeting. 

The bidder must inform both the target’s management board and the NBS of its intention to


announce a takeover bid. In the case of mandatory takeover bids, the bidder shall also inform 

the target and the NBS as to when and how the obligation arose. In the announcement sent to 

the NBS, the bidder must enclose either an application for the appointment of an expert or an 

expert’s report prepared in accordance with the provisions of the Securities Act concerning mandatory 

takeovers. The bidder must also publish the announcement in a daily national newspaper 

in the Slovak Republic or in a daily newspaper that has sufficient coverage in the Slovak Republic 

and in other EU Member States where the target’s shares are traded on a regulated market. 

Upon being informed of a takeover bid, the target must keep confidential the fact that the bidder 

intends to make a bid. The management of the target must, without undue delay following the 

announcement of an intention to make a takeover bid, inform the supervisory board of the target 

about the content of the takeover bid. The management of the target and the bidder must also 

inform the representatives of the target’s employees (or the employees directly) about the content 

of the takeover bid. 

The bidder is obliged to submit a written proposal for the takeover bid (draft bid) to the NBS 

within 10 business days after publication of such announcement. 


A takeover bid must include the following information: 

• the name and address of the bidder or, if the bidder is acting for the account of another 

person, the name and address of the persons for whose account the bidder is acting; 

• the business name and registered office of the target; 

• the business name and registered office of the brokerage firm which is acting for the bidder 

in connection with the takeover bid; 

• the period of validity of the takeover bid, which may not be shorter than 30 calendar days nor 

longer than 70 calendar days running from the date on which the takeover bid is published; 

• the number, type, class, amount and ISIN number of the securities to which the bid relates; 

• the number, type and form of voting shares of the target already held by the bidder, including 

shares held by persons acting in concert, and the date of acquisition of the shares and their 

price, as well as information about any sale of such securities by the bidder or anyone with 

whom it is acting in concert during the preceding twelve months; 

• the terms of the bid, specifying in particular: the consideration offered for the target’s shares; 

the method used to determine the purchase price; information on sources of funding and the 

method of financing the bid; the method by which the takeover bid can be accepted; and, in 

the case of a voluntary partial takeover bid, the number or percentage of the target’s shares 

that are subject to the voluntary takeover bid. 

• if the bid provides for a minimum threshold (in the case of a voluntary takeover bid), it must 

state the minimum number of securities that must be tendered in order for the bid to be 

considered successful; 

• terms for withdrawal of the bid; 

• obligatory conditions subsequent related to obtaining any necessary governmental 

approvals for the acquisition; 

• how the bidder will fulfill its obligations in the event of a successful takeover bid; 

• the legal consequences of an unsuccessful takeover bid; and 

• other important information on the takeover bid. 

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• Approval by the nBS 

The NBS shall reject a draft bid which is not in compliance with the Securities Act within 10 business 

days from its submission. The NBS may, within 5 business days from the submission of a 

written draft bid, ask the bidder to provide additional information or correct the information in the 

draft bid. If the NBS asks the bidder to provide additional information or correct the information 

in the draft bid, it shall give the bidder no more than 15 days to complete and re-submit the bid. 

After a draft bid has been re-submitted, the NBS has a period of five additional business days 

to issue its decision. 

• Appointment of broker 

The bidder is obligated to appoint a bank or a broker company (obchodník s cennými papiermi) 

to submit the takeover bid in the name and on behalf of the bidder. 


The board of directors (in cooperation with the supervisory board) of the target must comment on 

the bid within 5 business days from the delivery of the takeover bid and circulate its views to its 

shareholders. The comments must include an evaluation of the bid with regard to the interests of 

the shareholders, creditors and employees of the target. The comments of the board of directors 

must be submitted to the workers’ council and the public. 


PURCHASE PRICE 

The purchase price may be paid in either cash or shares or in a combination of the two. If the 

bidder offers any portion of the payment in shares, it must also offer a cash alternative. The bid 

price for shares in a mandatory bid must be “adequate” relative to the value of the shares of the 

target; the adequacy of the bid price must be supported by an expert appraisal. Where a mandatory 

takeover bid precedes a squeeze-out, the expert shall set the general value of the target as 

a whole under both the asset method and the business method, and the higher of the two values 

shall be used to set the bid price. 

Pursuant to the Takeover Law, a bid price that is (i) lower than the highest price paid by the offeror 

during the 12 months preceding the announcement of the takeover bid but (ii) is not lower 

than the price determined by the expert appraisal and not lower than the net asset value of a 

target share according to the most recent audited financial statements shall be considered adequate. 

However, the price may not be lower than the average price paid by the bidder for the 

target shares acquired on the stock exchange within 12 months preceding the announcement 

of the takeover bid. The price offered for the same class of shares must be the same for every 

shareholder.


BID TERM 

The offer must remain open for at least 30 days and cannot be longer than 70 days after the 

takeover bid has been published, unless provided otherwise by the Takeover law. 

CONDITIONS 

A voluntary bid may stipulate that a certain minimum threshold of shares must be acquired by the 

bidder in the course of a takeover bid in order for the bid to be deemed successful and binding. 

WITHDRAWAL –VOLUNTARy BID 

After its announcement that it will make a bid, a bidder may withdraw only if the bid expressly 

stated that the bidder had this right and only prior to the first acceptance of the bid. The bidder 

may also withdraw the bid if a competing bid is launched. 

WITHDRAWAL –MANDATORy BID 

It is not possible to withdraw a mandatory bid. 

AMENDMENTS 

The bidder can amend its bid only if this is expressly provided for in the bid and only due to 

circumstances caused by persons other than the bidder or entities acting in concert with the 

bidder; moreover, the amendment may not reduce the price offered or provide other conditions 

that are less favorable to the offerees than those set out in the initial bid. For the amendment to 

be valid, the offer must be published no later than five days before the deadline for acceptance 

of the initial offer expires; after an amendment, the offer must remain open for acceptance for at 

least five additional business days. In addition, an amendment must be approved by the NBS. 

Amendments to the offer, which improve conditions of the original offer, are also valid in relation 

to shareholders who accepted the initial offer, who are in turn entitled to withdraw their acceptance. 





• The bidder may not purchase target shares, other than through the takeover bid. 

• The target may not, without a resolution of its general meeting, 

- decide to increase its share capital; or 

- issue bonds combined with a pre-emptive right to subscribe new shares of the target, or 

shares that are convertible into shares of the target; or 

- buy back its own shares; or 

- enter into commitments without receiving appropriate counter value; or 

- take legal action which would result in a significant change in the assets of the target. 

Furthermore, the target’s management may not perform any acts or take any measures that 

could hinder the ability of the target’s shareholders from making a free informed decision with 

respect to acceptance of the bid. 

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In the event of a competing bid, the management of the target is obliged to notify the original 

bidder without delay. The competing bid must be published not later than five business days before 

expiration of the deadline for acceptance of the initial offer, and its term must be no shorter 

than the term of the original bid, but in any case no less than 10 business days. If the term of the 

competing bid would terminate later than the original bid, then the offer term of the original bid 

shall be extended until the expiry of the offer term of the competing bid. 

If a valid competing bid is made, and provided that the original bid is still open for acceptance, 

every shareholder that accepted the original bid has the right to withdraw its acceptance and 

accept the competing bid. 

Timetable for a mandatory bid 




to the NBS, the target’s 

management board 


announcement 

and publication (“launch”) 

of the bid 

Prior to launch, the 

bidder must: 

Without delay, after the triggering of an obligation to announce 

a mandatory bid or once the bidder’s management 

board has formally agreed to actually proceed with 

the bid. 

The bidder is obliged to submit a written proposal for the 

takeover bid to the NBS within 10 business days after publication 

of the announcement. The bidder may not publish 

the proposal for the takeover bid prior to receiving approval 

from the NBS. Once the NBS approves the proposal, 

the bidder shall publish it without delay. 

• appoint a securities broker to submit the bid to the NBS 

on behalf of the bidder; 

• without undue delay after the adoption of the decision 

on the bid or after the triggering of an obligation to announce 

a mandatory bid: (i) notify the board of directors of 

the target, (ii) notify the NBS, and (iii) publish the information 

in the newspapers; 

• after triggering a mandatory bid, the bidder must submit 

the draft bid to the NBS within 10 days; 

• once the NBS has approved the bid (approval must be 

granted or denied within 10 days after receiving the application), 

the bid approved by the NBS must be notified to ...


Offer launch 

Publication of success 

of the bid by the bidder 



... the board of directors of the target and published in the 

newspapers without undue delay. 

The offer must remain open for at least 30 days but no 

more than 70 days after the takeover bid has been published, 

unless stated otherwise in the Takeover law. 

The Takeover law provides for the offer term to be extended 

only in the case of a competing bid: 

+ [term]: in the event of a competing bid, until the lapse of 

the offer term of such bid. 

The Takeover law does not provide for any other way to 

extend the offer term. 

The bidder must publish the results of the bid after the expiry 

of the bid period. 

The NBS is empowered to issue a decision on the approval of the takeover bid. The NBS is competent 

to supervise takeover procedures for transactions where (i) the securities of the target are 

being traded on an organized market in the Slovak Republic or (ii) the securities of the target are 

being traded on organized markets in other EU member states but were first admitted to trading 

in the Slovak Republic or (iii) the securities of the target were admitted simultaneously to trading 

in the Slovak Republic and on organized markets in other EU Member States where the target 

has designated the Slovak Republic as the Home State. 



An acquisition of target shares will require a notice to the Slovak Antimonopoly Office if: 

• the combined global turnover of the parties to the concentration is at least SKK 

1,200,000,000 (approximately EUR 40 million) for the latest completed accounting period 

preceding the establishment of the concentration and at least two of the parties to the concentration 

had turnover of at least SKK 360,000,000 (approximately EUR 12 million) each 

in the Slovak Republic for the latest completed accounting period preceding the establishment 

of the concentration; or 

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• at least one of the parties to the concentration had total turnover of at least SKK 

500,000,000 (approximately EUR 16.5 million) in the Slovak Republic for the latest completed 

accounting period preceding the establishment of the concentration and at least one 

other party to the concentration had total global turnover of at least SKK 1,200,000,000 

(approximately EUR 40 million) for the latest completed accounting period preceding 

the establishment of the concentration. 

The Slovak Antimonopoly Office must issue a decision on the basis of the notification of a concentration 

within 60 working days following the date of delivery of the notification. It must approve 

the concentration if it does not create or strengthen a dominant position resulting in significant 

barriers to effective competition in the relevant market. It must also issue a decision approving 

the concentration if a condition imposed in the decision ensures that the concentration complies 

with the requirement cited in the previous sentence (in this case, the Slovak Antimonopoly Office 

may decide that the parties to the proceedings must not exercise the rights and obligations resulting 

from the concentration until the imposed condition has been fulfilled). On the other hand, 

the Slovak Antimonopoly Office must prohibit a concentration if it creates or strengthens a dominant 

position resulting in significant barriers to effective competition in the relevant market. 

An undertaking may not exercise the rights and obligations resulting from a concentration before 

the decision on the concentration becomes legally valid. At the request of an undertaking, the 

Slovak Antimonopoly Office must issue a decision granting an exemption from the ban referred 

to above if valid reasons for the exemption exist. When deciding on the exemption, the Slovak 

Antimonopoly Office must also take into account the effects of suspension of the concentration 

on the parties to the concentration and third parties. An exemption may be granted subject to a 

condition in order to ensure effective competition. 


If the thresholds for notifying the intended concentration are not met, no clearance of the Slovak 

Antimonopoly Office is required and the intended concentration does not have to be notified. 


Squeeze-outs are possible in the Slovak Republic only for companies with listed shares, and 

only if: 

• the majority shareholder has carried out a mandatory or voluntary takeover bid announced 

after 1 January 2007 and this bid (i) was not a partial bid and (ii) was unconditional; and 

• the majority shareholder holds at least 95% of the shares and has at least 95% of the voting 

rights in the target. 

The right of squeeze-out may be used not later than three months after the last takeover bid has 

expired. The majority shareholder who intends to make use of the right of squeeze-out must 

declare this intention and provide proof to the target, the NBS and all remaining shareholders 

without delay of the circumstances under which this right arose. The right of squeeze-out shall be 

effective towards the minority shareholders only once the approval of the NBS has been granted. 

The NBS may only grant its approval if all the conditions for a squeeze-out have been met. The


NBS shall not grant approval if the contract proposal does not include reservation of ownership 

(i.e., a provision according to which ownership shall not be transferred to the bidder unless the 

purchase price has been paid in full). 

Minority shareholders shall indicate acceptance within the period stated in the squeeze-out proposal, 

or else within a period of ten business days from when the NBS issued its approval. If a 

minority shareholder fails to accept the contract proposal within the stipulated period, the majority 

shareholder has three months to seek a court order in substitution for acceptance of the 

proposal. The minority shareholders may object that the consideration offered is inadequate. 

The minority shareholders must be granted adequate compensation (a fair price) for their shares. 

This compensation may take the form of money, securities or a combination of the two. If the 

bidder offers securities as compensation, it must also offer a cash alternative. Compensation 

shall be regarded as adequate if it equals at least one of the following amounts: 

• The compensation offered during the course of the mandatory takeover bid for the shares of 

the target, if as a result of such bid the bidder acquired at least a 95% share in the target; 

• the compensation offered during the course of a voluntary takeover bid for the shares of the 

target, if as a result of such bid the bidder acquired at least a 95% share in the target; provided 

that the bidder acquired at least 90% of the shares subject to the takeover bid; or 

• the compensation determined according to the rules applicable to mandatory takeover bids; 

however, if an expert appraisal is to be used, it may not be older than three months prior to the 

date when it was announced that the bidder will exercise its right of squeeze-out. 

Any lien/pledge on shares transferred by a minority shareholder to the majority shareholder 

expires upon the transfer. 

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Takeovers in Slovakia

Takeovers in Slovenia 


Markus Bruckmueller 

Wolf Theiss, Slovenia 

The information contained in this article on takeovers in Slovenia was correct as of 1 June 2008. 


takeovers in Slovenia, please contact: 


Wolf Theiss, svetovanje, d.o.o. 

Tivolska cesta 30 

1000 Ljubljana 

Slovenia 

Tel.: +386 1 438 00 - 00 

Fax.: +386 1 438 00 – 25 

Email: markus.bruckmueller@wolftheiss.com 

David Ayres 



186 00 Prague 8 


Tel.: +420 234 765 – 111 

Fax.: +420 234 765 – 110 


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Introduction 


Public takeover bids for Slovenian companies are relatively common. The program initiated by 

the Slovenian government to privatize state-owned companies resulted in widespread public 

share ownership, with most privatized companies being listed on the stock exchange. The Slovenian 

legislation on takeovers provides for a mandatory takeover bid once a person (or a group 

of persons acting in concert) has acquired a 25% stake in the target company. This mandatory 

bid procedure has resulted in a large number of takeover bids relative to the size of the Slovenian 

market. 

In the mid- to late 1990s, Slovenia witnessed a significant increase in the number of takeovers, 

prompted both by Slovenia’s joining the European Union (the EU) and by the need for Slovenian 

companies to restructure their businesses in the face of increased international competition. 

The Slovenian Securities Market Agency (the Agency) dealt with 112 public takeover bids, 106 

of which were successful and 6 of which were unsuccessful, by the end of 2006. 

Most of the deals have involved friendly takeovers. By the end of 2007, there had been only a 

few successful hostile takeovers, for example a hostile takeover for the brewer Pivovarna Lasko 

d.d. However, there is frequent speculation in Slovenia’s daily newspapers of purported hostile 

takeover bids. 


The current Slovenian Law on Takeovers (the Takeover Act) became effective on 11 August 2006. 

The Takeover Act was adopted with the principle goal of bringing Slovenia’s law into compliance 

with applicable EU law. The Takeover Act, which implemented Directive 2004/25/EC on takeover 

bids (the Directive), regulates takeovers similarly to the takeover legislation of many EU 

member states. 

In January 2008, Slovenia adopted a significant amendment to the Takeover Act which provides 

that any bidder in a public takeover must not, either directly or indirectly, secure the financing of a 

takeover bid by pledging shares in the target company. The bidder must also prove to the Agency 

that it did not, either directly nor indirectly, pledge the shares in the target company. Since this 

amendment to the Takeover Act is very recent, there is no precedent or experience indicating 

how the Agency will deal with this provision in practice and what sort of proof will have to be provided 

by the bidder. In the past, the Agency has generally taken a rather strict and bureaucratic 

approach to takeover matters. 

The Slovenian Parliament is currently considering additional amendments to the Takeover Act 

which would extend the applicability of the Takeover Act to non-listed companies and lower the 

applicable thresholds for non-listed companies. If adopted, the amendment would place the 

Takeover Act well beyond the scope of the 2004/25/EC Directive and the takeover legislation 

of other EU states. The peculiarities of the Slovene legal environment, which reflects radical 

changes of the Slovenian economic and social systems in recent years, has led to a perceived 

need to provide additional protection to the shareholders of non-listed companies. 

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Currently the Takeover Act applies to public limited companies whose shares are not traded on 

the regulated market if the company has at least 250 shareholders and share capital of at least 

EUR 4,172,926. Under the proposed amendment, the fulfillment of either, rather than both, of 

these conditions would result in the application of the Takeover Act to the issuer. 

The proposed amendment explicitly provides that shares subject to call options and futures 

contracts are to be included when determining whether the thresholds for a mandatory offer 

have been reached. The amendment also makes it clearer that, once a shareholder acquires 

at least 75% of an issuer’s voting shares, it has no further obligation to launch further takeover 

bids when it acquires additional shares in the target company. 

The proposed amendments also seek to ensure that the price offered to the minority shareholders 

of a non-listed company is fair, by requiring that the bidder engage independent auditors to 

prepare an expert report regarding the adequacy of the offered price. The bidder is also obliged 

to justify the price offered in its takeover bid. 


The Takeover Act applies to all Slovenian public limited companies whose voting shares are 

traded on a regulated market. Unlike the Directive, the Takeover Act also applies to non-listed 

companies that both: 

• have their seats/registered offices in the Republic of Slovenia; and 

• as of the last day of the year preceding the relevant year had more than 250 shareholders 

and at least EUR 4,172,926 in registered share capital. 


The Takeover Act applies in cases of takeover bids for public limited companies as well as for 

non-listed companies if they fulfill the conditions set out in the Takeover Act (see above). The 

Takeover Act requires a mandatory bid to be made for all of the shares in a company in two 

situations: 

• once a person (or parties acting in concert) obtains 25% of the voting rights of the 

target; or 

• if a person acquires 10% of the target’s voting shares after a successful takeover 

bid. 

However, the obligation to make an additional takeover bid lapses if, after the successful takeover 

bid, it acquires at least 75% of the target’s voting shares. 

• To what kinds of acquisitions does the Takeover Act not 

apply? 

The Takeover Act does not apply to:


• certain types of “passive acquisitions” that trip the 25% threshold, including acquisitions of 

shares by inheritance; gratuitous transactions between close family members (spouses, 

cohabiting partners etc.); through a merger or spin-off involving the exchange of securities of 

the company ceasing to exist, provided that the aim of such procedure was not the takeover 

of the target company; and, after a successful takeover bid, the transfer of the acquired 

securities from the acquirer to persons with whom it is acting in concert; 

• the acquisition of a controlling interest in the acquirer, the aim of which was not the takeover 

of the target company; 

• the acquisition of securities delivered as contributions in the course of the establishment of a 

company or a capital increase, if such entity is considered to be a holding company; 

• an acquisition of shares that trips the threshold, if such threshold is reached as a result of 

a capital decrease followed by a withdrawal of shares approved by a general meeting of the 

issuer’s shareholders in which the acquirer did not participate; or 

• an acquisition of shares where the aggregate voting share in the target company derived 

from the securities held by another shareholder or shareholders forming a statutory cartel is 

higher than the voting share of the entity. 


Under the Takeover Act, shareholders who reach, exceed, or cease to exceed certain thresholds 

of voting rights must notify the Agency and the issuer of the securities within four business 

days after the acquirer becomes aware, or should have become aware, that one of the following 

thresholds of voting rights was reached: 5%, 10%, 15%, 20%, 25%, 33.33% (1/3), 50%, and 

75%. In addition, the target company must publicize such a change in its share ownership within 

the same time limit. 

A person who has attained or exceeded, or intends to exceed, such a qualified threshold of 

shares and fails to duly notify the Agency or the target company will be subject to an administrative 

penalty of up to EUR 41,729. 







share acquisition, involving due diligence of the target. The acquisition agreement will typically 


If there is unusual activity in the capital markets, for example a substantial increase in the price 

of a security, which could lead to the conclusion that a takeover bid is in preparation, or if a 

takeover agreement has been entered into but not announced, the Agency can demand that 

every person (or group of persons) likely to issue a takeover bid declare within 24 hours whether 

or not it intends to issue a takeover bid. In such an event, the Agency may also demand that the 

target company’s management, within 24 hours from a receipt of the Agency’s request, declare 

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whether or not it has been informed of the intended takeover bid. Declarations regarding such 

demands are to be published without delay. 



the publicly available information about many Slovenian public companies is still relatively 

limited. In a negotiated transaction, therefore, it is common for the majority shareholder of the 

target to provide extensive information about the target, either directly or by encouraging the target 




A bidder must take care not to violate the insider trading provisions contained in the Financial 

Markets Act. After receiving unpublished material inside information from the target, the bidder 


information. 




• the management of the bidder decides to make a bid; or 

• events occur that oblige the bidder to make a mandatory bid (that is, the bidder acquires a 

controlling interest in the target); or 

• undue fluctuations in the target’s share price or rumors develop as a consequence of the 

bidder’s preparations to make a bid. 

Prior to announcing its takeover bid, the bidder must announce its intention to: 

• the target’s management board; 

• the Agency; and 

• the Competition Office; 

and publish announcement of its intention on the same day. 

The target company’s management and the bidder must, without delay, notify the target 

company’s employee representatives or, if they are not available, the employees themselves, of 

the takeover bid. 

Upon being informed, the target must keep confidential the fact that the bidder intends to make 

a bid. 

The management of the target company must, within two business days following the announcement 

of the intent to make a takeover bid, inform the Agency of any possible negotiations and

agreement with the bidder or inform it that no such actions are taking place. 


The target company will also be obliged to make an announcement if, as a consequence of the 

bidder’s approach, rumors develop or there are undue fluctuations in the share price. In such a 

case, the bidder is of course also obligated to announce its intentions. 

• offer documents 

The main bid documentation consists of: 

• the prospectus, which contains all information on the takeover bid (that is, information to be 

provided by law and other information considered relevant by the bidder). A Slovenian takeover 

prospectus typically consists of about 30 to 50 pages in total (without schedules); and 

• the takeover bid itself, which contains the core information (that is, the information about the 

securities for which the bid is being made) and typically comprises 2 to 4 pages. The Takeover 

Act requires the bidder to provide certain additional information if it is making a bid to 

acquire shares for cash or a combination of cash and shares or for alternative consideration 

as well as for substitute, combined and alternative bids. The takeover bid must be published 

in relevant daily papers in Slovenia. 

The bid documentation has to be issued not later than 30 days and not earlier than 10 days after 

the announcement of an intention to make a takeover bid. 

The prospectus must include the following: 

• details on the issuer and the securities to which the bid relates; 

• details on the bidder; 

• terms of the bid; 

• bid period; 

• terms for withdrawal of the bid; 

• if the bid provides for a minimum threshold, it must state the minimum number of securities 

that must be tendered in order for the bid to be considered successful; 

• obligatory conditions subsequent related to obtaining any necessary governmental 

approvals for the acquisition; 

• how the bidder will fulfill its obligations in the event of a successful takeover bid; 

• the legal consequences of an unsuccessful takeover bid; 

• other important information on the takeover bid; 

• the brokerage firm submitting the bid for and on behalf of the bidder; 

• a statement that the declaration on the acceptance of the bid must be sent to the brokerage 

firm; 

• the list of places where the prospectus is available to the shareholders of the target; and 

• the applicable law and the court having jurisdiction in a case of disputes. 

• Approval by the agency 

Prior to the announcement of a takeover bid, the bidder must obtain an approval from the 

Agency. 

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The Agency will grant such approval if: 

• the prospectus and the takeover bid are legally made; 

• the bidder has deposited the cash amount required to pay for the securities or a bank guarantee 

for such amount or, if the bidder offers an exchange of securities, such securities have been 

deposited them with the Central Clearing Agency (the KDD); and 

• the bidder has concluded a contract with the KDD for services associated with the takeover 

bid and made advance payment for these services. 

The Agency must approve or deny the takeover bid within 5 days after its receipt. 

• Appointment of broker 

The bidder is obligated to appoint a registered brokerage company to submit the takeover bid 

and to carry out other legal transactions relating to the takeover bid on behalf of and for the account 

of the bidder. 


The management of the target company has to publish and substantiate its opinion regarding the 

takeover bid within 10 days after its announcement. The comments must include an evaluation 

of the bid with regard to the interests of the shareholders, creditors and employees of the target. 

The comments of the management must be submitted to the employee representatives’ council 

and the public. 


PURCHASE PRICE 

The bidder may offer either cash consideration or an exchange of securities for the shares being 

acquired in the takeover bid. The bidder may also offer a combination of cash and securities or 

may give the offerees the option to choose either cash or an exchange of securities (or a combination). 

However, a bidder that has exceeded a takeover threshold in violation of the provisions 

of the Takeover Act, or a bidder that has acquired more than 5% of the target’s shares in the 

12-month period prior to making a takeover bid, may only launch a cash bid. 

The price being offered or the conversion rate for securities being exchanged in the takeover bid 

must be the same for all securities of a particular class or type. The Takeover Act provides that 

the price provided for in the takeover bid must not be lower than the highest price at which the 

bidder acquired securities of the issuer in the 12-month period prior to the publication of the bid. 

If the bidder acquires securities within one year after the expiration of the time limit for accepting 

the successful takeover bid at a price that is higher than the price it paid in the bid, it must pay to 

the shareholders that accepted the offer the difference in price within eight days after its acquisition 

of the shares at a higher consideration. The purchase price may be paid in either cash or 

securities that meet certain criteria. 

BID TERM 

The offer must remain open for at least 28 days and cannot be longer than 60 days after the

prospectus and the takeover bid have been published. 

CONDITIONS 

Permissible conditions to an offer are extremely limited: 


• there can be no financing condition, since the bidder must deposit to a special cash account 

opened with the KDD the purchase price or a bank guarantee covering the full purchase price 

for the shares that are subject to the bid; 

• if the bid is conditioned upon the approval or consent of a regulatory authority, its text must 

explicitly contain a provision according to which the takeover bid will terminate if, by the lapse 

of the bid period, the competent body: 

- does not issue such an approval, 

- decides not to grant the approval, or 

- grants the approval for the acquisition of a share that is less than the share already acquired 

or for which the existing shareholders have accepted the offer; 

• merger clearance, if the necessary thresholds are met, is a mandatory condition to the 

successful completion of a bid. Obtaining such clearance can take an extended period. In order 

to prevent the termination of a bid in case of a delay in obtaining merger clearance, the bidder 

may resort to an increase in the purchase price per share in order to trigger a legitimate 

7-day extension. In the past, some bids were extended repeatedly through additional 7-day 

terms in order to extend the offer term past the date when merger approval was obtained. 

To be on the safe side, the bidder may consider such potential increases in the bid price for 

the overall bid price calculation in order to achieve an extension of the offer term. However, 

the offer term cannot be extended beyond the final term, that is, 60 days from the date of the 

announcement of the first takeover bid and, if the Competition Office has not issued its ruling 

within a 60-day term, the bid will be terminated; 

• the bid may stipulate that a certain minimum threshold of shares must be acquired by the 

bidder in the course of a takeover bid in order for the bid to be deemed successful and binding. 

WITHDRAWAL 

After the announcement of a takeover bid and prior to expiration of the time limit for acceptance, 

the bidder may, in so far as the prospectus provides for such possibility, withdraw its bid and annul 

any contracts concluded by accepting such bid. Such withdrawal is possible if another bidder 

makes a competitive bid or if circumstances arise that would make it so difficult for the bidder to 

comply with its bid that the purchase of securities would no longer meet the bidder’s expectations 

and it would be deemed unfair to maintain the validity of the contracts. 

The bidder must publicly announce the withdrawal of a takeover bid; the withdrawal takes effect 

on the day of such publication. The bidder is obliged to announce such withdrawal to the Agency 

and to KDD. As of the day of announcement of the withdrawal of a takeover bid, all contracts that 

had been concluded by acceptance of the withdrawn bid are considered terminated. 

AMENDMENTS 

After a takeover bid has been announced the bidder can amend its bid only by: 

• offering a higher price or a more favorable conversion rate; or 

• setting a lower threshold for the success of the bid, if any. 

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The other terms of the takeover bid cannot be revised. The bidder may revise the bid during the 

acceptance period of the initial bid, but not later than 14 days before the expiry of such period. 

For an amendment to be valid, the following acts must be completed no later than 14 days before 

the deadline for the acceptance of the initial offer expires: 

• the takeover bid must be published; 

• the Agency and the KDD must be notified; and 

• if a higher price or a more favorable conversion rate for substitute securities is offered, the 

difference in price or securities must be deposited into a special KDD account. 

After an amendment, the bid stays open for acceptance for 7 additional business days. Amendments 

to the bid are also valid in relation to the shareholders who accepted the initial bid. 





• the bidder may not purchase target shares, other than through the takeover bid; 

• the target may not, without a resolution of the general meeting: 

- increase the company’s share capital; 

- conclude a transaction that is outside of the day-to-day business of the company; 

- acquiretreasurysharesoranyothersecuritiesconferringsomerightsonthetreasuryshares; 

- take actions or conduct business that could seriously jeopardize the financial situation of the 

company; or 

- take any actions that might frustrate the bid, unless it has obtained the prior consent of the 

general meeting. 

Furthermore, the target may not take any action designed to prevent the shareholders from 

reaching an unbiased and informed decision on the offer. 


Under the Takeover Act, a competing bid must be published not later than 10 days prior to the 

time limit allowed for the acceptance of the first bid and not later than 28 days prior to the final 

date for acceptance. If those deadlines are not met, the competing bid does not have legal effect. 

The bidder may provide for a successful bid threshold in its competing bid only if the initial bid 

included a successful bid threshold and the threshold has not yet been reached before the date 

of publication of the competing bid. The successful bid threshold must not be higher than the 

successful bid threshold in the initial takeover bid. 


However, it is a principle of Slovenian corporate law that the management of the target must


consider the interests of all shareholders, employees and creditors of the target. The management 

of the target must therefore not withhold information from a bidder whose offer could be 

more favorable than the original offer. 

Shareholders that accepted the initial bid before the publication of the competing bid have the 

right to renounce the contracts concluded by accepting the initial bid and to accept the competing 

bid. 

The Agency may refuse to authorize a competing bid when it is obviously speculative and when 

it is clear that its sole purpose is to change the price of securities that are the object of the first 

takeover bid. 





to the Agency, the target’s 

management board, and 

to the Competition Office 


announcement 

and publication (“launch”) 

of the bid 


must 

Once the bidder’s management board has formally agreed 

to actually proceed with the bid. 

30 days. 

• enter into a service agreement (this is a standardized 

form agreement) with the KDD to act as intermediary for 

the transfer of the shares (if the bid is declared successful); 


bid) to be proposed under the bid terms with the KDD or, 

alternatively, provide the KDD with a bank guarantee for 

the same amount; 

• appoint a Slovene brokerage company to submit the bid 

to the Agency on behalf of the bidder; 

• the Agency must have approved the bid (approval must 

be granted or denied within 5 days of receiving the application); 

and 

• as part of the submission of the bid to the Agency, the 

bidder must confirm that it has submitted merger and other 

relevant regulatory filings. 

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Emergency Launch: 

Offer Launch: 

Subject to general privacy considerations, it is advisable to 

involve a Slovene securities broker before the announcement 

because it usually takes another 2–3 weeks to “clear” 

the bid-draft with such broker. 

The obligation to make an announcement will be 

triggered by: 

• undue fluctuations in the share price of the target, provided 

that the Agency has also initiated an inquiry with the 

bidder on whether such fluctuations are the result of its 

intention to submit a bid. In such case, the bidder would 

have to declare (“yes” or “no”) regarding whether it has 

such an intention. If the bidder‘s answer is “yes”, then this 

would qualify as the announcement. If the answer is “no”, 

then the bidder‘s bid would be time-barred for 1 year; or 

• the target notifying the Agency of “serious negotiations” 

with the bidder; as a result of such statement, the Agency 

may again approach the bidder and request a “yes/no” 

statement (the target must inform the Agency of “serious 

negotiations” concerning a takeover with a potential bidder; 

the assessment of whether such negotiations have 

reached the necessary level of “seriousness” is subject 

to the target’s discretion). This is the most likely case in 

which the bidder would engage in an emergency launch. 

According to the Takeover Act, the time allowed for acceptance 

of a bid must not be less than 28 days or more than 

60 days from the date of the publication of the offer. The final 

period for the acceptance of the first and other possible 

competing bids is 60 days after the date of the announcement 

of the first takeover bid (the final deadline). 



• + 7 days: if the bidder, during the offer term, improves 

the bid (that is, subject to the approval of the Agency, offers 

a higher price per share or waives a bid condition in 

relation to the minimum target threshold); such improvement 

cannot be made during the 14-day term preceding 

the expiry of the offer term; 

• + 14 days: if the intended approval threshold is reached 

14 days prior to the expiry of the offer term (minimum number 

of shares that the bidder wishes to acquire as a condition 

to the bid); and






Agency, the Competition 

Office and the KDD 


shareholders by the KDD 



• + [term]: in the event of a competing bid, until the lapse 

of the offer term of such bid. 

There is no other option to extend the offer term. 

Within 3 business days after the expiry of the bid period. 

The content of the announcement of the result of the bid 

must be provided to the Agency and to the Competition 

Office. In the event that the bid is conditioned upon the 

approval or consent of a regulatory authority, the bidder 

must forward such decision of the competent body to the 

Agency and to the Competition Office. In the event that the 

competent body does not issue its decision by the lapse 

of the bid period, the bidder must submit to the Agency a 

statement that such an approval has not been issued. 

Within 8 days after receipt of the decision of the Agency. 

The Agency is empowered to issue a decision on the approval of the takeover bid. The Agency 

is competent to supervise takeover procedures for transactions where: 

• the securities of the target company are being traded only on the organized market of the 

Republic of Slovenia; 

• the securities of the target company are being traded on organized markets in other EU 

member states with primary trading in the Republic of Slovenia or where the target 

company has designated the Agency as the competent body; or 

• the target company is considered as a non-public corporation required to make a public takeover 

bid. 

The Agency is particularly involved in monitoring unusual fluctuations in share price or other 

market activity and in ensuring that an emergency launch is made, when mandated. 

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An acquisition of target shares will require a notice to and approval from the Slovenian Competition 

Office if: 

• the combined aggregate annual turnover in Slovenia of all undertakings concerned, including 

affiliated undertakings, was more than EUR 35 million before taxes in the previous business 

year; and 

• the annual turnover in Slovenia of the target undertaking, including affiliated undertakings, in 

the previous business year exceeded the amount of EUR 1 million; in the case of a joint 

venture, the annual turnover in Slovenia of at least two undertakings concerned, including 

affiliated undertakings, in the previous business year exceeded the amount of EUR 1 million, 

then the Competition Authority may require notice of the concentration to be filed if the companies 

have a market share of more than 60%. 

If these thresholds are met, the acquisition must be approved by the Slovenian Competition 

Office. The Competition Office issues a decision confirming that the merger is in accordance with 

the Competition Act or that further procedures must be performed within 25 business days. 

The Competition Office issues its approval as a written decree. A final decision must be issued 

within a maximum period of 85 days after receiving the pre-merger notification (60 business 

days after issuing the order on commencing further procedures). 


Regardless of whether or not the thresholds for approval are met, a bidder has an obligation to 

inform the Competition Office under all circumstances of its intention to issue a public takeover 

bid. The concentration shall not be effected until the Competition Office issues a decree stating 

that the merger is in accordance with competition rules. 


A shareholder holding at least 90% of the registered share capital of a Slovenian company has 

the right to propose to the general meeting that it adopt a resolution requiring the transfer of all 

the remaining shares of the minority shareholders to the principal shareholder. If the general 

meeting adopts such a resolution within three months after the announcements of the results 

of the takeover bid, the purchase price for which the shares are being transferred to the main 

shareholder must be of the same kind and in the same amount as determined in the takeover bid.

The Takeover Directive 

Takeover Directive 

Directive 2004/25/EC of the european parliament and of the council of 21 April 2004 

on takeover bids (Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 44(1) 

thereof, 

Having regard to the proposal from the Commission(1), 

Having regard to the opinion of the European Economic and Social Committee(2), 

Acting in accordance with the procedure laid down in Article 251 of the Treaty(3), 

Whereas: 

(1) In accordance with Article 44(2)(g) of the Treaty, it is necessary to coordinate certain safeguards 

which, for the protection of the interests of members and others, Member States require 

of companies governed by the law of a Member State the securities of which are admitted to 

trad-ing on a regulated market in a Member State, with a view to making such safeguards equivalent 

throughout the Community. 

(2) It is necessary to protect the interests of holders of the securities of companies governed by 

the law of a Member State when those companies are the subject of takeover bids or of changes 

of control and at least some of their securities are admitted to trading on a regulated market in 

a Member State. 

(3) It is necessary to create Community-wide clarity and transparency in respect of legal issues 

to be settled in the event of takeover bids and to prevent patterns of corporate restructuring 

within the Community from being distorted by arbitrary differences in governance and management 

cultures. 

(4) In view of the public-interest purposes served by the central banks of the Member States, it 

seems inconceivable that they should be the targets of takeover bids. Since, for historical reasons, 

the securities of some of those central banks are listed on regulated markets in Member 

States, it is necessary to exclude them explicitly from the scope of this Directive. 

(5) Each Member State should designate an authority or authorities to supervise those aspects 

of bids that are governed by this Directive and to ensure that parties to takeover bids comply 

with the rules made pursuant to this Directive. All those authorities should cooperate with one 

another. 

(6) In order to be effective, takeover regulation should be flexible and capable of dealing with new 

circumstances as they arise and should accordingly provide for the possibility of exceptions and 

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derogations. However, in applying any rules or exceptions laid down or in granting any derogations, 

supervisory authorities should respect certain general principles. 

(7) Self-regulatory bodies should be able to exercise supervision. 

(8) In accordance with general principles of Community law, and in particular the right to a fair 

hearing, decisions of a supervisory authority should in appropriate circumstances be susceptible 

to review by an independent court or tribunal. However, Member States should be left to determine 

whether rights are to be made available which may be asserted in administrative or judicial 

proceedings, either in proceedings against a supervisory authority or in proceedings between 

parties to a bid. 

(9) Member States should take the necessary steps to protect the holders of securities, in particular 

those with minority holdings, when control of their companies has been acquired. The 

Member States should ensure such protection by obliging the person who has acquired control of 

a company to make an offer to all the holders of that company’s securities for all of their holdings 

at an equitable price in accordance with a common definition. Member States should be free to 

establish further instruments for the protection of the interests of the holders of securities, such 

as the obligation to make a partial bid where the offeror does not acquire control of the company 

or the obligation to announce a bid at the same time as control of the company is acquired. 

(10) The obligation to make a bid to all the holders of securities should not apply to those controlling 

holdings already in existence on the date on which the national legislation transposing this 

Directive enters into force. 

(11) The obligation to launch a bid should not apply in the case of the acquisition of securities 

which do not carry the right to vote at ordinary general meetings of shareholders. Member States 

should, however, be able to provide that the obligation to make a bid to all the holders of securities 

relates not only to securities carrying voting rights but also to securities which carry voting 

rights only in specific circumstances or which do not carry voting rights. 

(12) To reduce the scope for insider dealing, an offeror should be required to announce his/her 

decision to launch a bid as soon as possible and to inform the supervisory authority of the bid. 

(13) The holders of securities should be properly informed of the terms of a bid by means of 

an offer document. Appropriate information should also be given to the representatives of the 

company’s employees or, failing that, to the employees directly. 

(14) The time allowed for the acceptance of a bid should be regulated. 

(15) To be able to perform their functions satisfactorily, supervisory authorities should at all times 

be able to require the parties to a bid to provide information concerning themselves and should 

cooperate and supply information in an efficient and effective manner, without delay, to other 

authorities supervising capital markets. 

(16) In order to prevent operations which could frustrate a bid, the powers of the board of an 

offeree company to engage in operations of an exceptional nature should be limited, without 

unduly hindering the offeree company in carrying on its normal business activities.


(17) The board of an offeree company should be required to make public a document setting out 

its opinion of the bid and the reasons on which that opinion is based, including its views on the 

effects of implementation on all the company’s interests, and specifically on employment. 

(18) In order to reinforce the effectiveness of existing provisions concerning the freedom to deal 

in the securities of companies covered by this Directive and the freedom to exercise voting rights, 

it is essential that the defensive structures and mechanisms envisaged by such companies be 

transparent and that they be regularly presented in reports to general meetings of shareholders. 

(19) Member States should take the necessary measures to afford any offeror the possibility 

of acquiring majority interests in other companies and of fully exercising control of them. To 

that end, restrictions on the transfer of securities, restrictions on voting rights, extraordinary 

appointment rights and multiple voting rights should be removed or suspended during the time 

allowed for the acceptance of a bid and when the general meeting of shareholders decides on 

defensive measures, on amendments to the articles of association or on the removal or appointment 

of board members at the first general meeting of shareholders following closure of the bid. 

Where the holders of securities have suffered losses as a result of the removal of rights, equitable 

compensation should be provided for in accordance with the technical arrangements laid 

down by Member States. 

(20) All special rights held by Member States in companies should be viewed in the framework 

of the free movement of capital and the relevant provisions of the Treaty. Special rights held by 

Member States in companies which are provided for in private or public national law should be 

exempted from the «breakthrough» rule if they are compatible with the Treaty. 

(21) Taking into account existing differences in Member States’ company law mechanisms and 

structures, Member States should be allowed not to require companies established within their 

territories to apply the provisions of this Directive limiting the powers of the board of an offeree 

company during the time allowed for the acceptance of a bid and those rendering ineffective barriers, 

provided for in the articles of association or in specific agreements. In that event Member 

States should at least allow companies established within their territories to make the choice, 

which must be reversible, to apply those provisions. Without prejudice to international agreements 

to which the European Community is a party, Member States should be allowed not to 

require companies which apply those provisions in accordance with the optional arrangements 

to apply them when they become the subject of offers launched by companies which do not apply 

the same provisions, as a consequence of the use of those optional arrangements. 

(22) Member States should lay down rules to cover the possibility of a bid’s lapsing, the offeror’s 

right to revise his/her bid, the possibility of competing bids for a company’s securities, the disclosure 

of the result of a bid, the irrevocability of a bid and the conditions permitted. 

(23) The disclosure of information to and the consultation of representatives of the employees 

of the offeror and the offeree company should be governed by the relevant national provisions, 

in particular those adopted pursuant to Council Directive 94/45/EC of 22 September 1994 on 

the establishment of a European Works Council or a procedure in Community-scale undertakings 

and Community-scale groups of undertakings for the purposes of informing and consulting 

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employees(4), Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of 

the Member States relating to collective redundancies(5), Council Directive 2001/86/EC of 8 

October 2001 supplementing the statute for a European Company with regard to the involvement 

of employees(6) and Directive 2002/14/EC of the European Parliament and of the Council 

of 11 March 2002 establishing a general framework for informing and consulting employees in 

the European Community - Joint declaration of the European Parliament, the Council and the 

Commission on employee representation(7). The employees of the companies concerned, or 

their representatives, should nevertheless be given an opportunity to state their views on the 

foreseeable effects of the bid on employment. Without prejudice to the rules of Directive 2003/6/ 

EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and 

market manipulation (market abuse)(8), Member States may always apply or introduce national 

provisions concerning the disclosure of information to and the consultation of representatives of 

the employees of the offeror before an offer is launched. 

(24) Member States should take the necessary measures to enable an offeror who, following a 

takeover bid, has acquired a certain percentage of a company’s capital carrying voting rights to 

require the holders of the remaining securities to sell him/her their securities. Likewise, where, 

following a takeover bid, an offeror has acquired a certain percentage of a company’s capital 

carrying voting rights, the holders of the remaining securities should be able to require him/her 

to buy their securities. These squeeze-out and sell-out procedures should apply only under specific 

conditions linked to takeover bids. Member States may continue to apply national rules to 

squeeze-out and sell-out procedures in other circumstances. 

(25) Since the objectives of the action envisaged, namely to establish minimum guidelines for 

the conduct of takeover bids and ensure an adequate level of protection for holders of securities 

throughout the Community, cannot be sufficiently achieved by the Member States because of 

the need for transparency and legal certainty in the case of cross-border takeovers and acquisitions 

of control, and can therefore, by reason of the scale and effects of the action, be better 

achieved at Community level, the Community may adopt measures, in accordance with the 

principle of subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of 

proportionality as set out in that Article, this Directive does not go beyond what is necessary to 

achieve those objectives. 

(26) The adoption of a Directive is the appropriate procedure for the establishment of a framework 

consisting of certain common principles and a limited number of general requirements 

which Member States are to implement through more detailed rules in accordance with their 

national systems and their cultural contexts. 

(27) Member States should, however, provide for sanctions for any infringement of the national 

measures transposing this Directive. 

(28) Technical guidance and implementing measures for the rules laid down in this Directive 

may from time to time be necessary, to take account of new developments on financial markets. 

For certain provisions, the Commission should accordingly be empowered to adopt implementing 

measures, provided that these do not modify the essential elements of this Directive and 

the Commission acts in accordance with the principles set out in this Directive, after consulting 

the European Securities Committee established by Commission Decision 2001/528/EC(9). The 

measures necessary for the implementation of this Directive should be adopted in accordance


with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise 

of implementing powers conferred on the Commission(10) and with due regard to the declaration 

made by the Commission in the European Parliament on 5 February 2002 concerning the implementation 

of financial services legislation. For the other provisions, it is important to entrust 

a contact committee with the task of assisting Member States and the supervisory authorities in 

the implementation of this Directive and of advising the Commission, if necessary, on additions 

or amendments to this Directive. In so doing, the contact committee may make use of the information 

which Member States are to provide on the basis of this Directive concerning takeover 

bids that have taken place on their regulated markets. 

(29) The Commission should facilitate movement towards the fair and balanced harmonisation of 

rules on takeovers in the European Union. To that end, the Commission should be able to submit 

proposals for the timely revision of this Directive, 

HAVE ADOPTED THIS DIRECTIVE 

Article 1 

SCOPE 

1.This Directive lays down measures coordinating the laws, regulations, administrative provisions, 

codes of practice and other arrangements of the Member States, including arrangements 

established by organisations officially authorised to regulate the markets (hereinafter referred 

to as «rules»), relating to takeover bids for the securities of companies governed by the laws of 

Member States, where all or some of those securities are admitted to trading on a regulated market 

within the meaning of Directive 93/22/EEC (11) in one or more Member States (hereinafter 

referred to as a «regulated market» ). 

2.This Directive shall not apply to takeover bids for securities issued by companies, the object of 

which is the collective investment of capital provided by the public, which operate on the principle 

of risk-spreading and the units of which are, at the holders’ request, repurchased or redeemed, 

directly or indirectly, out of the assets of those companies. Action taken by such companies to 

ensure that the stock exchange value of their units does not vary significantly from their net asset 

value shall be regarded as equivalent to such repurchase or redemption. 

3.This Directive shall not apply to takeover bids for securities issued by the Member States’ 

central banks. 

Article 

DEFINITIONS 

1. For the purpose of this Directive: 

a) «takeover bid» or «bid» shall mean a public offer (other than by the offeree company itself) 

made to the holders of the securities of a company to acquire all or some of those securities, 

whether mandatory or voluntary, which follows or has as its objective the acquisition of control of 

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the offeree company in accordance with national law; 

(b) «offeree company» shall mean a company, the securities of which are the subject of a bid; 

(c) «offeror» shall mean any natural or legal person governed by public or private law making a bid; 

(d) «persons acting in concert» shall mean natural or legal persons who cooperate with the offeror 

or the offeree company on the basis of an agreement, either express or tacit, either oral or 

written, aimed either at acquiring control of the offeree company or at frustrating the successful 

outcome of a bid; 

(e) «securities» shall mean transferable securities carrying voting rights in a company; 

(f) «parties to the bid» shall mean the offeror, the members of the offeror’s board if the offeror is 

a company, the offeree company, holders of securities of the offeree company and the members 

of the board of the offeree company, and persons acting in concert with such parties; 

(g) «multiple-vote securities» shall mean securities included in a distinct and separate class and 

carrying more than one vote each. 

2. For the purpose of paragraph 1(d), persons controlled by another person within the meaning 

of Article 87 of Directive 2001/34/EC(12) shall be deemed to be persons acting in concert with 

that other person and with each other. 

Article 

GENERAL PRINCIPLES 

1. For the purpose of implementing this Directive, Member States shall ensure that the following 

principles are complied with: 

(a) all holders of the securities of an offeree company of the same class must be afforded equivalent 

treatment; moreover, if a person acquires control of a company, the other holders of securities 

must be protected; 

(b) the holders of the securities of an offeree company must have sufficient time and information 

to enable them to reach a properly informed decision on the bid; where it advises the holders of 

securities, the board of the offeree company must give its views on the effects of implementation 

of the bid on employment, conditions of employment and the locations of the company’s places 

of business; 

(c) the board of an offeree company must act in the interests of the company as a whole and 

must not deny the holders of securities the opportunity to decide on the merits of the bid; 

(d) false markets must not be created in the securities of the offeree company, of the offeror company 

or of any other company concerned by the bid in such a way that the rise or fall of the prices 

of the securities becomes artificial and the normal functioning of the markets is distorted;


(e) an offeror must announce a bid only after ensuring that he/she can fulfil in full any cash consideration, 

if such is offered, and after taking all reasonable measures to secure the implementation 

of any other type of consideration; 

(f) an offeree company must not be hindered in the conduct of its affairs for longer than is reasonable 

by a bid for its securities. 

2.With a view to ensuring compliance with the principles laid down in paragraph 1, Member 

States: 

(a) shall ensure that the minimum requirements set out in this Directive are observed; 

(b) may lay down additional conditions and provisions more stringent than those of this Directive 

for the regulation of bids. 

Article 

SUPERVISORy AUTHORITy AND APPLICABLE LAW 

1.Member States shall designate the authority or authorities competent to supervise bids for 

the purposes of the rules which they make or introduce pursuant to this Directive. The authorities 

thus designated shall be either public authorities, associations or private bodies recognised 

by national law or by public authorities expressly empowered for that purpose by national law. 

Member States shall inform the Commission of those designations, specifying any divisions of 

functions that may be made. They shall ensure that those authorities exercise their functions 

impartially and independently of all parties to a bid. 

2.(a) The authority competent to supervise a bid shall be that of the Member State in which the 

offeree company has its registered office if that company’s securities are admitted to trading on 

a regulated market in that Member State. 

(b) If the offeree company’s securities are not admitted to trading on a regulated market in the 

Member State in which the company has its registered office, the authority competent to supervise 

the bid shall be that of the Member State on the regulated market of which the company’s 

securities are admitted to trading. 

If the offeree company’s securities are admitted to trading on regulated markets in more than one 

Member State, the authority competent to supervise the bid shall be that of the Member State on 

the regulated market of which the securities were first admitted to trading. 

(c) If the offeree company’s securities were first admitted to trading on regulated markets in 

more than one Member State simultaneously, the offeree company shall determine which of the 

supervisory authorities of those Member States shall be the authority competent to supervise 

the bid by notifying those regulated markets and their supervisory authorities on the first day of 

trading. 

If the offeree company’s securities have already been admitted to trading on regulated markets 

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in more than one Member State on the date laid down in Article 21(1) and were admitted simultaneously, 

the supervisory authorities of those Member States shall agree which one of them shall 

be the authority competent to supervise the bid within four weeks of the date laid down in Article 

21(1). Otherwise, the offeree company shall determine which of those authorities shall be the 

competent authority on the first day of trading following that four-week period. 

(d) Member States shall ensure that the decisions referred to in (c) are made public. 

(e) In the cases referred to in (b) and (c), matters relating to the consideration offered in the 

case of a bid, in particular the price, and matters relating to the bid procedure, in particular the 

information on the offeror’s decision to make a bid, the contents of the offer document and the 

disclosure of the bid, shall be dealt with in accordance with the rules of the Member State of the 

competent authority. In matters relating to the information to be provided to the employees of the 

offeree company and in matters relating to company law, in particular the percentage of voting 

rights which confers control and any derogation from the obligation to launch a bid, as well as the 

conditions under which the board of the offeree company may undertake any action which might 

result in the frustration of the bid, the applicable rules and the competent authority shall be those 

of the Member State in which the offeree company has its registered office. 

3.Member States shall ensure that all persons employed or formerly employed by their supervisory 

authorities are bound by professional secrecy. No information covered by professional 

secrecy may be divulged to any person or authority except under provisions laid down by law. 

4.The supervisory authorities of the Member States for the purposes of this Directive and other 

authorities supervising capital markets, in particular in accordance with Directive 93/22/EEC, 

Directive 2001/34/EC, Directive 2003/6/EC and Directive 2003/71/EC of the European Parliament 

and of the Council of 4 November 2003 on the prospectus to be published when securities 

are offered to the public or admitted to trading shall cooperate and supply each other with information 

wherever necessary for the application of the rules drawn up in accordance with this 

Directive and in particular in cases covered by paragraph 2(b), (c) and (e). Information thus exchanged 

shall be covered by the obligation of professional secrecy to which persons employed 

or formerly employed by the supervisory authorities receiving the information are subject. Cooperation 

shall include the ability to serve the legal documents necessary to enforce measures 

taken by the competent authorities in connection with bids, as well as such other assistance 

as may reasonably be requested by the supervisory authorities concerned for the purpose of 

investigating any actual or alleged breaches of the rules made or introduced pursuant to this 

Directive. 

5.The supervisory authorities shall be vested with all the powers necessary for the purpose of 

carrying out their duties, including that of ensuring that the parties to a bid comply with the rules 

made or introduced pursuant to this Directive. 

Provided that the general principles laid down in Article 3(1) are respected, Member States may 

provide in the rules that they make or introduce pursuant to this Directive for derogations from 

those rules: 

(i) by including such derogations in their national rules, in order to take account of circumstances 

determined at national level

and/or 


(ii) by granting their supervisory authorities, where they are competent, powers to waive such 

national rules, to take account of the circumstances referred to in (i) or in other specific circumstances, 

in which case a reasoned decision must be required. 

6.This Directive shall not affect the power of the Member States to designate judicial or other 

authorities responsible for dealing with disputes and for deciding on irregularities committed in 

the course of bids or the power of Member States to regulate whether and under which circumstances 

parties to a bid are entitled to bring administrative or judicial proceedings. In particular, 

this Directive shall not affect the power which courts may have in a Member State to decline to 

hear legal proceedings and to decide whether or not such proceedings affect the outcome of a 

bid. This Directive shall not affect the power of the Member States to determine the legal position 

concerning the liability of supervisory authorities or concerning litigation between the parties to 

a bid. 

Article 

PROTECTION OF MINORITy SHAREHOLDERS, THE MANDATORy BID 

AND THE EqUITABLE PRICE 

1.Where a natural or legal person, as a result of his/her own acquisition or the acquisition by 

persons acting in concert with him/her, holds securities of a company as referred to in Article 1(1) 

which, added to any existing holdings of those securities of his/hers and the holdings of those 

securities of persons acting in concert with him/her, directly or indirectly give him/her a specified 

percentage of voting rights in that company, giving him/her control of that company, Member 

States shall ensure that such a person is required to make a bid as a means of protecting the 

minority shareholders of that company. Such a bid shall be addressed at the earliest opportunity 

to all the holders of those securities for all their holdings at the equitable price as defined in 

paragraph 4. 

2.Where control has been acquired following a voluntary bid made in accordance with this Directive 

to all the holders of securities for all their holdings, the obligation laid down in paragraph 1 to 

launch a bid shall no longer apply. 

3.The percentage of voting rights which confers control for the purposes of paragraph 1 and 

the method of its calculation shall be determined by the rules of the Member State in which the 

company has its registered office. 

4.The highest price paid for the same securities by the offeror, or by persons acting in concert 

with him/her, over a period, to be determined by Member States, of not less than six months and 

not more than 12 before the bid referred to in paragraph 1 shall be regarded as the equitable 

price. If, after the bid has been made public and before the offer closes for acceptance, the offeror 

or any person acting in concert with him/her purchases securities at a price higher than the 

offer price, the offeror shall increase his/her offer so that it is not less than the highest price paid 

for the securities so acquired. 

Provided that the general principles laid down in Article 3(1) are respected, Member States may 

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authorise their supervisory authorities to adjust the price referred to in the first subparagraph in 

circumstances and in accordance with criteria that are clearly determined. To that end, they may 

draw up a list of circumstances in which the highest price may be adjusted either upwards or 

downwards, for example where the highest price was set by agreement between the purchaser 

and a seller, where the market prices of the securities in question have been manipulated, where 

market prices in general or certain market prices in particular have been affected by exceptional 

occurrences, or in order to enable a firm in difficulty to be rescued. They may also determine 

the criteria to be applied in such cases, for example the average market value over a particular 

period, the break-up value of the company or other objective valuation criteria generally used in 

financial analysis. 

Any decision by a supervisory authority to adjust the equitable price shall be substantiated and 

made public. 

5.By way of consideration the offeror may offer securities, cash or a combination of both. 

However, where the consideration offered by the offeror does not consist of liquid securities 

admitted to trading on a regulated market, it shall include a cash alternative. 

In any event, the offeror shall offer a cash consideration at least as an alternative where he/she 

or persons acting in concert with him/her, over a period beginning at the same time as the period 

determined by the Member State in accordance with paragraph 4 and ending when the offer 

closes for acceptance, has purchased for cash securities carrying 5 % or more of the voting 

rights in the offeree company. 

Member States may provide that a cash consideration must be offered, at least as an alternative, 

in all cases. 

6.In addition to the protection provided for in paragraph 1, Member States may provide for further 

instruments intended to protect the interests of the holders of securities in so far as those instruments 

do not hinder the normal course of a bid. 

Article 

INFORMATION CONCERNING BIDS 

1.Member States shall ensure that a decision to make a bid is made public without delay and that 

the supervisory authority is informed of the bid. They may require that the supervisory authority 

must be informed before such a decision is made public. As soon as the bid has been made 

public, the boards of the offeree company and of the offeror shall inform the representatives of 

their respective employees or, where there are no such representatives, the employees themselves. 

2.Member States shall ensure that an offeror is required to draw up and make public in good 

time an offer document containing the information necessary to enable the holders of the offeree 

company’s securities to reach a properly informed decision on the bid. Before the offer 

document is made public, the offeror shall communicate it to the supervisory authority. When it 

is made public, the boards of the offeree company and of the offeror shall communicate it to the


representatives of their respective employees or, where there are no such representatives, to 

the employees themselves. 

Where the offer document referred to in the first subparagraph is subject to the prior approval of 

the supervisory authority and has been approved, it shall be recognised, subject to any translation 

required, in any other Member State on the market of which the offeree company’s securities 

are admitted to trading, without its being necessary to obtain the approval of the supervisory authorities 

of that Member State. Those authorities may require the inclusion of additional information 

in the offer document only if such information is specific to the market of a Member State 

or Member States on which the offeree company’s securities are admitted to trading and relates 

to the formalities to be complied with to accept the bid and to receive the consideration due at 

the close of the bid as well as to the tax arrangements to which the consideration offered to the 

holders of the securities will be subject. 

3.The offer document referred to in paragraph 2 shall state at least: 

(a) the terms of the bid; 

(b) the identity of the offeror and, where the offeror is a company, the type, name and registered 

office of that company; 

(c) the securities or, where appropriate, the class or classes of securities for which the bid is made; 

(d) the consideration offered for each security or class of securities and, in the case of a mandatory 

bid, the method employed in determining it, with particulars of the way in which that consideration 

is to be paid; 

(e) the compensation offered for the rights which might be removed as a result of the breakthrough 

rule laid down in Article 11(4), with particulars of the way in which that compensation is 

to be paid and the method employed in determining it; 

(f) the maximum and minimum percentages or quantities of securities which the offeror undertakes 

to acquire; 

(g) details of any existing holdings of the offeror, and of persons acting in concert with him/her, 

in the offeree company; 

(h) all the conditions to which the bid is subject; 

(i) the offeror’s intentions with regard to the future business of the offeree company and, in so 

far as it is affected by the bid, the offeror company and with regard to the safeguarding of the 

jobs of their employees and management, including any material change in the conditions of 

employment, and in particular the offeror’s strategic plans for the two companies and the likely 

repercussions on employment and the locations of the companies’ places of business; 

(j) the time allowed for acceptance of the bid; 

(k) where the consideration offered by the offeror includes securities of any kind, information 

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concerning those securities; 

(l) information concerning the financing for the bid; 

(m) the identity of persons acting in concert with the offeror or with the offeree company and, in 

the case of companies, their types, names, registered offices and relationships with the offeror 

and, where possible, with the offeree company; 

(n) the national law which will govern contracts concluded between the offeror and the holders of 

the offeree company’s securities as a result of the bid and the competent courts. 

4.The Commission shall adopt rules for the application of paragraph 3 in accordance with the 

procedure referred to in Article 18(2). 

5.Member States shall ensure that the parties to a bid are required to provide the supervisory authorities 

of their Member State at any time on request with all the information in their possession 

concerning the bid that is necessary for the supervisory authority to discharge its functions. 

Article 

TIME ALLOWED FOR ACCEPTANCE 

1.Member States shall provide that the time allowed for the acceptance of a bid may not be less 

than two weeks nor more than 10 weeks from the date of publication of the offer document. 

Provided that the general principle laid down in Article 3(1)(f) is respected, Member States may 

provide that the period of 10 weeks may be extended on condition that the offeror gives at least 

two weeks’ notice of his/her intention of closing the bid. 

2.Member States may provide for rules changing the period referred to in paragraph 1 in specific 

cases. A Member State may authorise a supervisory authority to grant a derogation from the 

period referred to in paragraph 1 in order to allow the offeree company to call a general meeting 

of shareholders to consider the bid. 

Article 

DISCLOSURE 

1.Member States shall ensure that a bid is made public in such a way as to ensure market transparency 

and integrity for the securities of the offeree company, of the offeror or of any other 

company affected by the bid, in particular in order to prevent the publication or dissemination of 

false or misleading information. 

2.Member States shall provide for the disclosure of all information and documents required by 

Article 6 in such a manner as to ensure that they are both readily and promptly available to the 

holders of securities at least in those Member States on the regulated markets of which the offeree 

company’s securities are admitted to trading and to the representatives of the employees


of the offeree company and the offeror or, where there are no such representatives, to the employees 

themselves. 

Article 

OBLIGATIONS OF THE BOARD OF THE OFFEREE COMPANy 

1.Member States shall ensure that the rules laid down in paragraphs 2 to 5 are complied with. 

2.During the period referred to in the second subparagraph, the board of the offeree company 

shall obtain the prior authorisation of the general meeting of shareholders given for this purpose 

before taking any action, other than seeking alternative bids, which may result in the frustration 

of the bid and in particular before issuing any shares which may result in a lasting impediment to 

the offeror’s acquiring control of the offeree company. 

Such authorisation shall be mandatory at least from the time the board of the offeree company 

receives the information referred to in the first sentence of Article 6(1) concerning the bid and 

until the result of the bid is made public or the bid lapses. Member States may require that such 

authorisation be obtained at an earlier stage, for example as soon as the board of the offeree 

company becomes aware that the bid is imminent. 

3.As regards decisions taken before the beginning of the period referred to in the second subparagraph 

of paragraph 2 and not yet partly or fully implemented, the general meeting of shareholders 

shall approve or confirm any decision which does not form part of the normal course of the 

company’s business and the implementation of which may result in the frustration of the bid. 

4.For the purpose of obtaining the prior authorisation, approval or confirmation of the holders of 

securities referred to in paragraphs 2 and 3, Member States may adopt rules allowing a general 

meeting of shareholders to be called at short notice, provided that the meeting does not take 

place within two weeks of notification‘s being given. 

5.The board of the offeree company shall draw up and make public a document setting out its 

opinion of the bid and the reasons on which it is based, including its views on the effects of implementation 

of the bid on all the company’s interests and specifically employment, and on the 

offeror’s strategic plans for the offeree company and their likely repercussions on employment 

and the locations of the company’s places of business as set out in the offer document in accordance 

with Article 6(3)(i). The board of the offeree company shall at the same time communicate 

that opinion to the representatives of its employees or, where there are no such representatives, 

to the employees themselves. Where the board of the offeree company receives in good time a 

separate opinion from the representatives of its employees on the effects of the bid on employment, 

that opinion shall be appended to the document. 

6.For the purposes of paragraph 2, where a company has a two-tier board structure «board» 

shall mean both the management board and the supervisory board. 

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Article 10 

INFORMATION ON COMPANIES AS REFERRED TO IN ARTICLE 1(1) 

1.Member States shall ensure that companies as referred to in Article 1(1) publish detailed information 

on the following: 

(a) the structure of their capital, including securities which are not admitted to trading on a regulated 

market in a Member State, where appropriate with an indication of the different classes of 

shares and, for each class of shares, the rights and obligations attaching to it and the percentage 

of total share capital that it represents; 

(b) any restrictions on the transfer of securities, such as limitations on the holding of securities or 

the need to obtain the approval of the company or other holders of securities, without prejudice 

to Article 46 of Directive 2001/34/EC; 

(c) significant direct and indirect shareholdings (including indirect shareholdings through pyramid 

structures and cross-shareholdings) within the meaning of Article 85 of Directive 2001/34/EC; 

(d) the holders of any securities with special control rights and a description of those rights; 

(e) the system of control of any employee share scheme where the control rights are not exercised 

directly by the employees; 

(f) any restrictions on voting rights, such as limitations of the voting rights of holders of a given 

percentage or number of votes, deadlines for exercising voting rights, or systems whereby, with 

the company’s cooperation, the financial rights attaching to securities are separated from the 

holding of securities; 

(g) any agreements between shareholders which are known to the company and may result 

in restrictions on the transfer of securities and/or voting rights within the meaning of Directive 

2001/34/EC; 

(h) the rules governing the appointment and replacement of board members and the amendment 

of the articles of association; 

(i) the powers of board members, and in particular the power to issue or buy back shares; 

(j) any significant agreements to which the company is a party and which take effect, alter or 

terminate upon a change of control of the company following a takeover bid, and the effects 

thereof, except where their nature is such that their disclosure would be seriously prejudicial to 

the company; this exception shall not apply where the company is specifically obliged to disclose 

such information on the basis of other legal requirements; 

(k) any agreements between the company and its board members or employees providing for 

compensation if they resign or are made redundant without valid reason or if their employment 

ceases because of a takeover bid.


2.The information referred to in paragraph 1 shall be published in the company’s annual report 

as provided for in Article 46 of Directive 78/660/EEC(13) and Article 36 of Directive 83/349/ 

EEC(14). 

3.Member States shall ensure, in the case of companies the securities of which are admitted to 

trading on a regulated market in a Member State, that the board presents an explanatory report 

to the annual general meeting of shareholders on the matters referred to in paragraph 1. 

Article 11 

BREAKTHROUGH 

1.Without prejudice to other rights and obligations provided for in Community law for the companies 

referred to in Article 1(1), Member States shall ensure that the provisions laid down in 

paragraphs 2 to 7 apply when a bid has been made public. 

2.Any restrictions on the transfer of securities provided for in the articles of association of the 

offeree company shall not apply vis-à-vis the offeror during the time allowed for acceptance of 

the bid laid down in Article 7(1). 

Any restrictions on the transfer of securities provided for in contractual agreements between the 

offeree company and holders of its securities, or in contractual agreements between holders of 

the offeree company’s securities entered into after the adoption of this Directive, shall not apply 

vis-à-vis the offeror during the time allowed for acceptance of the bid laid down in Article 7(1). 

3.Restrictions on voting rights provided for in the articles of association of the offeree company 

shall not have effect at the general meeting of shareholders which decides on any defensive 

measures in accordance with Article 9. 

Restrictions on voting rights provided for in contractual agreements between the offeree company 

and holders of its securities, or in contractual agreements between holders of the offeree 

company’s securities entered into after the adoption of this Directive, shall not have effect at the 

general meeting of shareholders which decides on any defensive measures in accordance with 

Article 9. 

Multiple-vote securities shall carry only one vote each at the general meeting of shareholders 

which decides on any defensive measures in accordance with Article 9. 

4.Where, following a bid, the offeror holds 75 % or more of the capital carrying voting rights, no 

restrictions on the transfer of securities or on voting rights referred to in paragraphs 2 and 3 nor 

any extraordinary rights of shareholders concerning the appointment or removal of board members 

provided for in the articles of association of the offeree company shall apply; multiple-vote 

securities shall carry only one vote each at the first general meeting of shareholders following 

closure of the bid, called by the offeror in order to amend the articles of association or to remove 

or appoint board members. 

To that end, the offeror shall have the right to convene a general meeting of shareholders at short 

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notice, provided that the meeting does not take place within two weeks of notification. 

5.Where rights are removed on the basis of paragraphs 2, 3, or 4 and/or Article 12, equitable 

compensation shall be provided for any loss suffered by the holders of those rights. The terms for 

determining such compensation and the arrangements for its payment shall be set by Member 

States. 

6.Paragraphs 3 and 4 shall not apply to securities where the restrictions on voting rights are 

compensated for by specific pecuniary advantages. 

7.This Article shall not apply either where Member States hold securities in the offeree company 

which confer special rights on the Member States which are compatible with the Treaty, or to 

special rights provided for in national law which are compatible with the Treaty or to cooperatives. 

Article 1 

OPTIONAL ARRANGEMENTS 

1.Member States may reserve the right not to require companies as referred to in Article 1(1) 

which have their registered offices within their territories to apply Article 9(2) and (3) and/or 

Article 11. 

2.Where Member States make use of the option provided for in paragraph 1, they shall nevertheless 

grant companies which have their registered offices within their territories the option, which 

shall be reversible, of applying Article 9(2) and (3) and/or Article 11, without prejudice to Article 

11(7). 

The decision of the company shall be taken by the general meeting of shareholders, in accordance 

with the law of the Member State in which the company has its registered office in accordance 

with the rules applicable to amendment of the articles of association. The decision shall be 

communicated to the supervisory authority of the Member State in which the company has its 

registered office and to all the supervisory authorities of Member States in which its securities 

are admitted to trading on regulated markets or where such admission has been requested. 

3.Member States may, under the conditions determined by national law, exempt companies 

which apply Article 9(2) and (3) and/or Article 11 from applying Article 9(2) and (3) and/or Article 

11 if they become the subject of an offer launched by a company which does not apply the same 

Articles as they do, or by a company controlled, directly or indirectly, by the latter, pursuant to 

Article 1 of Directive 83/349/EEC. 

4.Member States shall ensure that the provisions applicable to the respective companies are 

disclosed without delay. 

5.Any measure applied in accordance with paragraph 3 shall be subject to the authorisation of 

the general meeting of shareholders of the offeree company, which must be granted no earlier 

than 18 months before the bid was made public in accordance with Article 6(1).

Article 1 


OTHER RULES APPLICABLE TO THE CONDUCT OF BIDS 

Member States shall also lay down rules which govern the conduct of bids, at least as regards 

the following: 

(a) the lapsing of bids; 

(b) the revision of bids; 

(c) competing bids; 

(d) the disclosure of the results of bids; 

(e) the irrevocability of bids and the conditions permitted. 

Article 1 

INFORMATION FOR AND CONSULTATION OF EMPLOyEES’ 

REPRESENTATIVES 

This Directive shall be without prejudice to the rules relating to information and to consultation of 

representatives of and, if Member States so provide, co-determination with the employees of the 

offeror and the offeree company governed by the relevant national provisions, and in particular 

those adopted pursuant to Directives 94/45/EC, 98/59/EC, 2001/86/EC and 2002/14/EC. 

Article 15 

THE RIGHT OF SqUEEZE-OUT 

1.Member States shall ensure that, following a bid made to all the holders of the offeree company’s 

securities for all of their securities, paragraphs 2 to 5 apply. 

2.Member States shall ensure that an offeror is able to require all the holders of the remaining 

securities to sell him/her those securities at a fair price. Member States shall introduce that right 

in one of the following situations: 

(a) where the offeror holds securities representing not less than 90 % of the capital carrying 

voting rights and 90 % of the voting rights in the offeree company, 

or 

(b) where, following acceptance of the bid, he/she has acquired or has firmly contracted to acquire 

securities representing not less than 90 % of the offeree company’s capital carrying voting 

rights and 90 % of the voting rights comprised in the bid. 

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In the case referred to in (a), Member States may set a higher threshold that may not, however, 

be higher than 95 % of the capital carrying voting rights and 95 % of the voting rights. 

3.Member States shall ensure that rules are in force that make it possible to calculate when the 

threshold is reached. 

Where the offeree company has issued more than one class of securities, Member States may 

provide that the right of squeeze-out can be exercised only in the class in which the threshold 

laid down in paragraph 2 has been reached. 

4.If the offeror wishes to exercise the right of squeeze-out he/she shall do so within three months 

of the end of the time allowed for acceptance of the bid referred to in Article 7. 

5.Member States shall ensure that a fair price is guaranteed. That price shall take the same form 

as the consideration offered in the bid or shall be in cash. Member States may provide that cash 

shall be offered at least as an alternative. 

Following a voluntary bid, in both of the cases referred to in paragraph 2(a) and (b), the consideration 

offered in the bid shall be presumed to be fair where, through acceptance of the bid, 

the offeror has acquired securities representing not less than 90 % of the capital carrying voting 

rights comprised in the bid. 

Following a mandatory bid, the consideration offered in the bid shall be presumed to be fair. 

Article 1 

THE RIGHT OF SELL-OUT 

1.Member States shall ensure that, following a bid made to all the holders of the offeree company’s 

securities for all of their securities, paragraphs 2 and 3 apply. 

2.Member States shall ensure that a holder of remaining securities is able to require the offeror 

to buy his/her securities from him/her at a fair price under the same circumstances as provided 

for in Article 15(2). 

3.Article 15(3) to (5) shall apply mutatis mutandis 

Article 1 

SANCTIONS 

Member States shall determine the sanctions to be imposed for infringement of the national 

measures adopted pursuant to this Directive and shall take all necessary steps to ensure that 

they are put into effect. The sanctions thus provided for shall be effective, proportionate and 

dissuasive. Member States shall notify the Commission of those measures no later than the date


laid down in Article 21(1) and of any subsequent change thereto at the earliest opportunity. 

Article 1 

COMMITTEE PROCEDURE 

1.The Commission shall be assisted by the European Securities Committee established by Decision 

2001/528/EC (hereinafter referred to as «the Committee»). 

2.Where reference is made to this paragraph, Articles 5 and 7 of Decision 1999/468/EC shall 

apply, having regard to Article 8 thereof, provided that the implementing measures adopted in 

accordance with this procedure do not modify the essential provisions of this Directive. 

The period referred to in Article 5(6) of Decision 1999/468/EC shall be three months. 

3.Without prejudice to the implementing measures already adopted, four years after the entry 

into force of this Directive, the application of those of its provisions that require the adoption of 

technical rules and decisions in accordance with paragraph 2 shall be suspended. On a proposal 

from the Commission, the European Parliament and the Council may renew the provisions concerned 

in accordance with the procedure laid down in Article 251 of the Treaty and, to that end, 

they shall review them before the end of the period referred to above. 

Article 1 

CONTACT COMMITTEE 

1.A contact committee shall be set up which has as its functions: 

(a) to facilitate, without prejudice to Articles 226 and 227 of the Treaty, the harmonised application 

of this Directive through regular meetings dealing with practical problems arising in connection 

with its application; 

(b) to advise the Commission, if necessary, on additions or amendments to this Directive. 

2.It shall not be the function of the contact committee to appraise the merits of decisions taken 

by the supervisory authorities in individual cases. 

Article 0 

REVISION 

Five years after the date laid down in Article 21(1), the Commission shall examine this Directive 

in the light of the experience acquired in applying it and, if necessary, propose its revision. That 

examination shall include a survey of the control structures and barriers to takeover bids that are 

not covered by this Directive. 

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To that end, Member States shall provide the Commission annually with information on the takeover 

bids which have been launched against companies the securities of which are admitted to 

trading on their regulated markets. That information shall include the nationalities of the companies 

involved, the results of the offers and any other information relevant to the understanding of 

how takeover bids operate in practice. 

Article 1 

TRANSPOSITION 

1.Member States shall bring into force the laws, regulations and administrative provisions necessary 

to comply with this Directive no later than 20 May 2006 . They shall forthwith inform the 

Commission thereof. 

When Member States adopt those provisions, they shall contain a reference to this Directive or 

shall be accompanied by such reference on the occasion of their official publication. The methods 

of making such reference shall be laid down by the Member States. 

2.Member States shall communicate to the Commission the text of the main provisions of national 

law that they adopt in the fields covered by this Directive. 

Article 

ENTRy INTO FORCE 

This Directive shall enter into force on the 20th day after that of its publication in the Official 

Journal of the European Union.

Article 

ADDRESSEES 

This Directive is addressed to the Member States. 

Done at Strasbourg, 21 April 2004. 

For the European Parliament 

The President 

P. Cox 

For the Council 

The President 

D. Roche 

(1) OJ C 45 E, 25.2.2003, p. 1. 

(2) OJ C 208, 3.9.2003, p. 55. 


(3) Opinion of the European Parliament of 16 December 2003 (not yet published in the Official 

Journal) and Council decision of 30 March 2004 

(4) OJ L 254, 30.9.1994, p. 64. Directive as amended by Directive 97/74/EC (OJ L 10, 16.1.1998, 

p. 22). 

(5) OJ L 225, 12.8.1998, p. 16. 

(6) OJ L 294, 10.11.2001, p. 22. 

(7) OJ L 80, 23.3.2002, p. 29. 

(8) OJ L 96, 12.4.2003, p. 16. 

(9) OJ L 191, 13.7.2001, p. 45. Decision as amended by Decision 2004/8/EC (OJ L 3, 7.1.2004, 

p. 33). 

(10) OJ L 184, 17.7.1999, p. 23. 

(11) Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field 

(OJ L 141, 11.6.1993, p. 27). Directive as last amended by Directive 2002/87/EC of the European 

Parliament and of the Council (OJ L 35, 11.2.2003, p. 1). 

(12) Directive 2001/34/EC of the European Parliament and of the Council of 28 May 2001 on the 

admission of securities to official stock exchange listing and on information to be published on 

those securities (OJ L 184, 6.7.2001, p. 1). Directive as last amended by Directive 2003/71/EC 

(OJ L 345, 31.12.2003, p. 64). 

(13) Fourth Council Directive 78/660/EEC of 25 July 1978 on the annual accounts of certain 

types of companies (OJ L 222, 14.8.1978, p. 11). Directive as last amended by Directive 2003/51/ 

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EC of the European Parliament and of the Council (OJ L 178, 17.7.2003, p. 16). 

(14) Seventh Council Directive 83/349/EEC of 13 June 1983 on consolidated accounts (OJ L 

193, 18.7.1983, p.1). Directive as last amended by Directive 2003/51/EC.

Wolf Theiss contact information 

For further information about Wolf Theiss or this Wolf Theiss Guide to Takeovers of Public Companies 

in Central and Southeastern Europe, please contact: 

David Ayres 



186 00 Prague 8 


Tel.: +420 234 765 – 111 

Fax.: +420 234 765 – 110 


For further information about takeovers in the following jurisdictions, please contact David Ayres at the 

address above or the attorney listed below: 

Albania: 

Sokol Nako 

Wolf Theiss SH.P.K. 

“Eurocol” Business Center, 4th floor, “Murat 

Toptani” Street 

Tirana, Albania 

Tel.: +355 4 227 4521 – 4521 

Fax.: +355 4 2274 521 

Email: sokol.nako@wolftheiss.com 

Bosnia and Herzegovina: 

David Ayres 

Wolf Theiss d.o.o. za konsulting 

Fra Anđela Zvizdovića 1, Tower A/12 

71 000 Sarajevo 

Bosnia and Herzegovina 

Tel.: +387 33 29 6 – 444 

Fax.: + 387 33 29 64 – 25 


Croatia: 

David Ayres 



186 00 Prague 8 


Tel.: +420 234 765 – 111 

Fax.: +420 234 765 – 110 


Austria: 


Wolf Theiss Rechtanwälte GMBH 

Schubertring 6 

1010 Wien 

Austria 

Tel.: +43 1 515 10 - 0 

Fax.: +43 1 515 10 – 25 

Email: claus.schneider@wolftheiss.com 

Bulgaria: 

Richard Clegg 

Wolf Theiss Business Service E.O.O.D. 

Rainbow Centre 

29 Atanas Dukov Street 

1407 Sofia 

Bulgaria 

Tel.: +359 2 4215 - 600 

Fax.: +359 2 4215 - 625 

Email: richard.clegg@wolftheiss.com 

Czech Republic: 

Paul Sestak 



186 00 Prague 8 


Tel.: +420 234 765 – 111 

Fax.: +420 234 765 – 110 

Email: paul.sestak@wolftheiss.com 

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Wolf Theiss contact information 

Hungary: 

Zoltán Faludi 

Faludi Wolf Theiss Ügyvédi Iroda 

Kálvin tér 12-13., Kálvin Center 

1085 Budapest 

Hungary 

Tel.: +36 1 4848 - 800 

Fax.: +36 1 4848 – 825 

Email: zoltan.faludi@wolftheiss.com 

Serbia: 

Miroslav Stojanovic 

Wolf Theiss d.o.o. Beograd 

PC Ušće Bulevar Mihajla Pupina 6 

11070 Novi Beograd 

Serbia 

Tel.: +381 11 3302 - 900 

Fax.: +381 11 3302 – 925 

Email: miroslav.stojanovic@wolftheiss.com 

Slovenia: 


Wolf Theiss, svetovanje, d.o.o. 

Tivolska cesta 30 

1000 Ljubljana 

Slovenia 

Tel.: +386 1 438 00 - 00 

Fax.: +386 1 438 00 – 25 

Email: markus.bruckmueller@wolftheiss.com 

Romania: 

Bryan Jardine 

Wolf Theiss si Asociatii SCA 

Bucharest Corporate Center Building 58- 

60 Gheorghe Polizu St., Floor 13, Sector 1 

Bucharest 011062 

Romania 

Tel.: +40 21 3088 - 100 

Fax.: +40 21 3088 – 125 

Email: bryan.jardine@wolftheiss.com 

Slovakia: 

Ľuboš Frolkovič 

Wolf Theiss, organizačná zložka 

Laurinská 3 

81101 Bratislava 

Slovak Republic 

Tel.: +421 2 591 012 - 40 

Fax.: +421 2 591 012 – 49 

Email: lubos.frolkovic@wolftheiss.com

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