CMS Expert Guide to Public Takeovers in Poland

Yes, in Poland, regulations concerning tender offers are set forth in the Act of 29 July 2005 on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies (the “Act on Public Offering”) and in the Regulation of the Minister of Finance dated 23 May 2022 on templates of tender offer documents for subscription for the sale or exchange of shares in a public company, the procedures of submitting and receiving subscriptions in a tender offer and allowed types of security interests (the “Tender Offer Regulation”). These legal acts constitute, among others, an implementation of the European Takeovers Directive.  

The Act on Public Offering covers three types of tender offers,  namely a Voluntary Tender Offer, Mandatory Tender Offer and Delisting Tender Offer (described in detail below).  

• Threshold for Mandatory Tender Offer 

The Act on Public Offering imposes  an obligation on a person to announce a mandatory tender offer if it acquires shares with more than 50%  of the voting rights in the target company (“Mandatory Tender Offer”).  A person who acquires shares in a company listed on the Warsaw Stock Exchange S.A. (“WSE”) with more than 50% of the voting rights in the company is obliged to announce a Mandatory Tender Offer: 

1. for the sale or exchange of all remaining shares of that target company (i.e., in an amount that allows the shareholder to reach 100% of voting rights); and 
2. within 3 months from the date of exceeding the threshold of 50% of the voting rights in the target company. 

The above obligation to announce a Mandatory Tender Offer does not apply if, within a period of three months after exceeding the threshold of 50% of the voting rights, the investor’s total voting power decreases to not more than 50% as a result of a share capital increase, amendments to the target company’s articles of association or expiry of preference rights attached to shares. 

• Voluntary Tender Offer 

The Act on Public Offering also permits a person to announce a voluntary tender offer for all remaining shares in a listed target company (“Voluntary Tender Offer”). As a result, an investor (irrespective of the share package held in the target company) is authorised to announce the Voluntary Tender Offer. 

• Delisting Tender Offer (see Question 24 below). 

The offeror must appoint a licensed brokerage firm whose role is to announce and conduct the tender offer on behalf of the offeror (the “Broker”). 

A person who acquires shares in a target company listed on the WSE with more than 50% of the voting rights in the target company is obliged to announce a Mandatory Tender Offer: 

Under the Act on Public Offering there are certain exemptions from the obligation to announce a Mandatory Tender Offer. A tender offer does not need to be announced, for example, for the acquisition of shares: 

• from an entity in to the same  group;  
•  in line with the procedures stipulated in the bankruptcy law and/or in enforcement proceedings (in respect of judgements etc);  
•  as part of compulsory restructuring proceedings; 
•  as a result of execution of financial collateral;  
•  acquisition of pledged shares by a pledgee;  
•  as a result of inheritance (with certain exceptions); or  
•  a company whose shares are introduced only to an alternative trading system or are not traded on an organised basis. 

In addition, there is no need to announce a tender offer if the threshold of 50% of the voting rights in the target company was exceeded as a result of the announcement of a Voluntary Tender Offer.

Takeover offers are most commonly implemented by either a Voluntary Tender Offer or a Mandatory Tender Offer as outlined above. 

In Poland there is no equivalent takeover offer procedure to a scheme of arrangement.  

Generally, the obligation to make a public announcement of an intention to launch a takeover offer by an offeror that is not a public company arises when circumstances which give rise to an obligation to make a takeover offer occur. An offeror that is a public company is obliged to announce its intention to launch a takeover offer under the general rules regulating disclosure of inside information as specified in the MAR. 

The parties must also comply with the disclosure obligations under the MAR as well as under the applicable regulations. 

The Act on Public Offering and Tender Offer Regulation set out the following rules and timeline for making takeover offers: 

• Entities allowed to announce the tender offer 

A tender offer may be announced by a person, any of its controlled or controlling entities or persons acting in concert with it. Any of them can announce the tender offer and release the rest from this duty.  

• Collateral 

A tender offer is carried out through the Broker. Prior to announcing a tender offer, the offeror  collateral in respect of at least 100% of the value of all shares to be acquired in the course of the tender offer (e.g. blocked funds in the offeror’s bank account, a bank guarantee or banking surety). 

• Notification and announcement of the tender offer 

The tender offer is announced by the Broker who submits a notification of the intention to announce a tender offer together with the tender offer document to the Polish Financial Supervision Authority (“PFSA”) (“Notification”). The tender offer document is prepared in accordance with the detailed requirements set forth in the Tender Offer Regulation and should include details of the offeror, the price offered, a description of the collateral in respect of  the offer price and the acceptance period. Within 24 hours from the Notification, the Broker submits the contents of the tender offer document to a news agency in order to publish the key details regarding the planned tender offer. 

The Notification needs to be submitted at least 17 business days prior to the planned date of announcing the tender offer. Upon receiving the Notification, the PFSA may, not later than 10 business days from receiving the Notification, require that, within a specified period not less than two business days, certain changes be made to  the tender offer document.  

After 17 business days from the date of submitting the Notification, the Broker provides the tender offer document to at least one news agency in order to have it published to all target company shareholders on non-discriminatory terms (“Announcement of the Tender Offer”). After the news agency has published the tender offer document in a free and widely accessible information service, the Broker shall publish the contents of the tender offer document on its website.  

After the Announcement of the Tender Offer, the target company’s management board provides information on the tender offer, including the tender offer document itself, to the representatives of any employees’ associations active in the target company, and if there are no such associations – directly to the employees. 

• Management board opinion 

The target company’s management board has to issue its opinion on the announced tender offer within 14 days from the Announcement of the Tender Offer. The opinion should be announced publicly as well as submitted to the PFSA. The management board’s opinion should include in particular:  

1. an opinion on the envisaged effects of the tender offer on the target company’s interests, including its workforce;  
2. an opinion on the offeror’s strategic plans relating to the target company and their effect on the target company’s workforce and location of its business activity; and  
3. information on whether, according to the management board, the purchase price proposed in the tender offer reflects the fair market value of the target company, with the reservation that the fair value may not be measured solely on the basis of previous quotations on a regulated market.  

• Subscription period 

The subscription starts no earlier than on the first business day and no later than on the fifth business day after the Announcement of the tender offer.  

The subscription period may not be shorter than 30 days and no longer than 70 days.   

In addition, the subscription period in a Voluntary Tender Offer may be extended by/to up to 120 days, if a decision of the competent regulatory authority (for example on granting consent to the acquisition of shares or a decision granting consent to the concentration of entrepreneurs) is required and such consent or decision has not been provided in the original term.  

Also, the subscription period may be shortened if all remaining shares of the target company have been subscribed for. Subscriptions for the sale of shares are placed with and registered by the Broker. 

Once the subscription period has elapsed and all conditions set out in the tender offer document have been fulfilled, the offeror acquires the shares offered for sale in the tender within three days of the end of the subscription period, and are then recorded in the offeror’s securities account within three days of the acquisition of shares. 

The overall period for the execution of the tender offer is approximately seven weeks, assuming: (i) the shortest possible legal period between the Notification and Announcement of the Tender Offer and the beginning of the subscription period; and (ii) the shortest subscription period.   

A Mandatory Tender Offer and Delisting Tender Offer cannot be conditional. In the case of a Voluntary Tender Offer, the tender offer document may include the following conditions: 

• that the general meeting or the supervisory board of the target company adopts a resolution on a certain matter; 
• that a tender offer for the shares in a company belonging to the same group as the target company, announced in one of the OECD countries by an entity from the offeror’s  group, has been completed with a specific result; 
• the target company enters into a certain type of agreement, including an organisational agreement. 

A regulatory consent such as anti-monopoly approval can also be a condition of the tender offer. Furthermore, the offeror may specify in the tender offer the minimum number of shares, which, if reached, will oblige him to acquire all the shares subscribed for under the tender offer, but such minimum acceptance level may not be higher than 50% of the shares in the target company together with the shares already held by the offeror. If that minimum number is not reached, the offeror may withdraw from acquiring any of tendered shares. 

The offeror may waive the conditions specified in the tender offer, except for the regulatory consents required for the acquisition. 

Prior to announcing a tender offer, the offeror must establish collateral in respect of  100% of the value of all shares to be acquired in the course of the tender offer (e.g. blocked funds in the offeror’s bank account, bank guarantee or banking surety). 

The Act on Public Offering contains minimum purchase price requirements. 

As a rule, shares may be acquired for cash or exchanged for other shares.  

The price offered in the tender offer may not be lower than the average trading price on the WSE: 

• For the last three months (during which the shares were traded on WSE) prior to the date of filing by the Broker of the Notification; and  
• for the last six months (during which the shares were traded on WSE) prior to the date of filing by the Broker of the Notification. 

In addition, the price offered in the tender offer may not be lower than the highest price (or value of assets and rights) which was paid (or obliged to be paid) by the offeror or any entity from its group in the previous 12 months prior to the date of filing by the Broker of the Notification. 

The average market price is the price that is the arithmetic mean of average daily prices weighted by the trading volume. 

In addition, if the offeror acquired the target’s company shares indirectly in the period of last 12 months prior to the date of filing by the Broker of the Notification, the price offered in the tender offer cannot be lower than the price paid in such indirect shares acquisition. 

The above pricing limitations will not apply with respect to shares comprising at least 5% of all shares in the target company if an agreement between the offeror and a given person accepting the tender offer exists to that effect.  

Please note that there are also special regulations related to the minimum price in so-called low-liquidity companies or companies in a restructuring or bankruptcy processes. 

No, the price must be the same for each share of the same type, although special rules apply to shareholders holding at least 5% of all shares in the target company. These rules allow for limited exceptions to the rule that all shareholders must be offered the same deal. 

There are no regulations or case law requiring the provision  of due diligence in relation to a public takeover offer for a target company. Advice needs to be obtained on a case-by-case basis. The prevailing view is that the offeror may carry out due diligence relating to the target company in the following circumstances:  

• the target company’s management may permit the offeror to perform due diligence only after a non-disclosure agreement is executed;  
•  the target company’s management is under a general obligation to keep inside information confidential; 
• prior to an announcement of the offeror’s intention to launch a takeover offer, the target company and its employees involved in any due diligence exercise have a continuing duty of confidentiality. 

In practice, the following deal protection measures apply: 

• pre-launch stakebuilding by an offeror will generally be permissible under takeover law and insider regulations (which may have an impact on the offered price); and  
• irrevocable undertakings of shareholders are generally permissible but advice needs to be obtained on a case-by-case basis. 

The target company’s board of directors is under no obligation to engage with a potential offeror or facilitate its offer (such as by providing due diligence information). However, the target company’s directors remain subject to their general duties to act in the company’s and shareholders’ best interests and therefore may be in a position where those duties require them to engage to some extent. 

In the period between filing the Notification and the closing of the announced tender offer, the offeror, its controlling and controlled entities and parties acting in concert with the offeror may acquire shares in the target company only as part of the tender offer and in a manner defined therein and may not dispose of shares in the target company, or enter into any agreement under which they would be obligated to dispose of the shares during the tender offer. These entities are also prohibited from indirectly purchasing shares covered by the tender offer. 

Target company shareholders may give irrevocable commitments or statements of intent to accept an offer if made or once made. In the case of target company directors, these undertakings are limited to acceptance of the offer as a shareholder, and not to taking any action, as a director, to support the offer. 

As noted above and subject to the limitations set out there, it is possible for potential offerors to buy shares in the target company during the offer process either on-market, by private agreement or through acquiring an option to do so from the shareholder.  

Please see Question 15 above. 

Following any acquisition or disposal of shares, if the offeror has reached or exceeded, or reduced (directly or indirectly) its holding, to or below a holding with 5%, 10%, 15%, 20%, 25%, 33%, 33 1/3%, 50%, 75% or 90% of voting rights in the target company, it must notify both the PFSA and the target company of this fact within 4 working days as of the date on which it found out, or could have had found out if exercising due care, about the change in the total number of votes, and in the case of a change arising from the acquisition or disposal of shares in a public company in a transaction performed on a regulated market or in an alternative trading system – within 6 trading days as of the day of conclusion of the transaction. 

Please see Question 7, items 3 and 5 above. 

• Filing with the PFSA and publication of the Notification of the intention to announce a tender offer 
• Submission of the application for anti-trust clearance and/or other regulatory approvals (if required) 
• Announcement of the tender offer circular 
• Irrevocable shareholders’ undertakings to accept the offer (if applicable) 
• Offeror’s financing documentation 

There are no rules on competing offers, but it is possible to change the price and withdraw the offer if another competing offeror announces a tender offer for shares in the same target company or changed the previously offered price. (see Question 21 below). 

• Change of price 

During the subscription period, the offeror may change the tender offer price not more often than once every five business days. The first change of the tender offer price may take place no earlier than 5 business days after commencement of subscription. If the new price: 

1. is higher than the price determined in the tender offer prior to the change – the offeror is required to pay the new (higher) price to all persons who tendered their shares to the offer before the announcement of the new price, unless a share transfer transaction was completed earlier (partial settlement); 
2. is lower than the price determined in the tender offer prior to the change – the offeror is required to pay to all the persons who tendered their  shares to the offer before the announcement of the changed price the offer price at which they tendered their shares, unless a share transfer transaction was completed earlier (partial settlement – this is where an offer may be initially closed for acceptances already received and then a subsequent lower price is offered to any remaining shareholders). 

The price offered in the tender offer may be changed anytime if another competing offeror announces a tender offer for the shares in the same target company or changed the previously offered price. If another competing offeror announced a tender offer for the same target company shares, any person who has tendered their shares before such announcement is entitled to withdraw the acceptance of the original offer, provided that the rights under the shares have not been transferred (in partial settlement of the tender offer). 

• Other changes in the tender offer 

Under certain conditions it is possible, during the offer period, to implement other changes in the tender offer. In the case of a Voluntary Tender Offer, the offeror is authorised to change the dates of the share purchase transactions in the tender offer and procedures and dates of receiving acceptances in a tender offer. In the case of the Mandatory Tender Offer, the offeror is only authorised to change the dates of the share purchase transactions in the tender offer. 

• Withdrawal of the tender offer 

Once announced, the tender offer may not be withdrawn, unless another competing offeror announces an unconditional tender offer for shares in the same target company with a higher price. 

Yes. In accordance with Public Offering Act, a person who individually or jointly with other entities (subsidiaries or entities acting in concert) acquires shares with 95% or more of the total voting rights in the target company, has the right, within three months from reaching or exceeding that threshold, to require the other shareholders to sell all the shares held by them. 

No. 

Under Polish law, delisting of the target company’s shares from trading on the WSE requires:  

• launching of a tender offer for all the target company’s shares held by all the remaining shareholders (“Delisting Tender Offer”); 
• the target company’s corporate approvals (for a company with its registered seat in Poland, a resolution on delisting of the target company’s shares from trading on the WSE has to be adopted by a majority of 90% of the votes cast at a meeting of shareholders at which shareholders representing at least half of the share capital are present); and 
• the PFSA approval of the delisting.  

The Delisting Tender Offer has to be announced by a target company shareholder who holds at least 5% of the target company’s share capital. The Delisting Tender Offer is not required if a shareholder(s) who wants to delist the target company decides to proceed with a squeeze-out (in order to do that such shareholder(s) must hold at least 95% of shares in the target company) or if all shareholders of the company apply for the general meeting agree to delist the target company (as it is possible for the company to remain listed after the squeeze out process).