Takeover Bid

The Act introduces a new definition ``takeover bid'' which is defined as a public promise to acquire an interest in listed shares to which voting rights are attached or all listed shares issued by a joint stock company (``target company'') to which voting rights are attached, or interim certificates that substitute such shares or other securities that are connected with the right to acquire such shares through purchase or exchange for other securities.

The Act describes in detail duties, procedures and terms regarding the public bid.

Generally, the bid may be revoked only if it is expressly stated therein and no later than on the day when it is accepted by the first interested person in a manner prescribed therein.

The bid shall only be capable of change in the time and under the conditions stated by law.

Save for a voluntary takeover bid, the Act also regulates a mandatory bid that represents an institute similar to the public promise under the former Act on Securities.

In order to protect minority shareholders the Act stipulates for each natural and legal person or persons acting in concurrence who reach or exceed 33%, 50% or 66% interest in voting rights attached to listed shares of one joint stock company a duty to realise a bid to take over a complete joint stock company thus a public promise to purchase all listed shares of this company. The Act explicitly lists the cases that are exempt from this duty (e.g. acquisition of shares by inheritance).

In order to protect the bid recipients the procedure of determination of the offered share price at the mandatory bid is specified by the Act in a similar way as it was in the case in the former procedure connected with the public bid.

---

Next: Public Bid of Securities
Up: Protection of Financial Market
Previous: Protection of Financial Market