- Are takeovers of listed companies regulated?
- What transactions are regulated?
- Are the parties to a takeover required to engage any specific advisers?
- Are there circumstances where a mandatory offer is required? Are there any exceptions to this requirement?
- How are takeover offers most commonly implemented? In particular, is it also possible to carry out a scheme of arrangement allowing for an acquisition of 100% of the target?
- Can the parties maintain confidentiality in respect of a potential offer?
- Are there rules around how and when an offer may be made?
- To what extent can there be conditionality around an offer?
- Are there any requirements as to the financing of an offer?
- Are there rules governing the maximum/minimum price which must be offered and/or the type of consideration which must be offered?
- Can different shareholders be offered different deals?
- Is the target allowed to, or can it even be forced to, provide information for due diligence?
- What deal protection measures may a bidder implement?
- Do the target directors need to engage with a potential offeror? What defences may a target deploy if it does not support the offer?
- Are there any restrictions on a potential offeror dealing in shares of the target?
- Can target shareholders give commitments to accept the offer? Can target shareholders sell or agree to sell their shares to the potential offeror outside the offer process?
- Are there any special disclosure obligations in respect of share dealings during a takeover process?
- What would a typical timetable look like?
- What are the key documents required?
- Are there rules governing competitive bid situations?
- Is the offeror entitled to withdraw or modify the offer?
- Can minority shareholders who do not accept the offer be compulsorily bought out?
- Are there restrictions on an offeror if its offer is not successful?
- How does a company de-list? What are the requirements for de-listing?
jurisdiction
1. Are takeovers of listed companies regulated?
Yes, takeovers of listed companies are regulated by the Securities and Investment Services Act and the Act on Securities Exchange. Public takeover offers are rare in Slovakia because of the nature of the market. There are only a small number of listed companies with wide shareholder ownership in Slovakia.
2. What transactions are regulated?
- Takeover offers,
- Partial offers,
- Conditional offers,
- Exchange of share offers or part thereof for other securities.
3. Are the parties to a takeover required to engage any specific advisers?
The National Bank of Slovakia may decide that the takeover offer requires an expert's assessment. A company registered as an expert in the field of economics and business management, branch valuation and business valuation, can be appointed as an expert.
4. Are there circumstances where a mandatory offer is required? Are there any exceptions to this requirement?
Yes, there are. An entity that, individually or together with an entity acting in concert, achieves or exceeds a controlling share in the target company, is obliged to make a takeover offer for all the shares of that company. This obligation does not apply to:
- an entity which has acquired a controlling interest in the target company as a result of a takeover offer which was neither a partial offer nor a conditional offer with a minimum acceptance condition; in that case, the offeror must also indicate the manner and time limit within which it will notify persons who have accepted the takeover offer of the fulfilment or non-fulfilment of the condition;
- a general legal successor of a shareholder of the target company if that shareholder has made a mandatory takeover offer or if the shareholder's voting share in the target company is not increased as a result of the legal succession;
- an entity that acquires shares in the target company by purchasing an enterprise or part of it in accordance with a procedure under a Bankruptcy and Restructuring Act if, the entity’s voting shares in the target company have not increased;
- an entity acting in concert with another entity, provided that their total number of voting shares in the target company has not changed.
5. How are takeover offers most commonly implemented? In particular, is it also possible to carry out a scheme of arrangement allowing for an acquisition of 100% of the target?
Yes, there is the possibility to acquire 100% of the target company.
6. Can the parties maintain confidentiality in respect of a potential offer?
Until the takeover offer is made public, the target company’s board of directors and supervisory board members are obliged to keep confidential the information obtained from the offeror regarding the prospective takeover offer. The confidentiality obligation also applies to representatives of employees, employees and shareholders of the target company who have received information on the takeover offer.
7. Are there rules around how and when an offer may be made?
If the offeror has decided or becomes obliged to make a takeover offer, it must without delay announce this fact in writing to the board of directors of the target company and to the National Bank of Slovakia.
8. To what extent can there be conditionality around an offer?
The offeror can make a takeover offer conditional on it acquiring a minimum number of shares. The fulfilment of the condition must be announced within one month from the expiry of the takeover offer.
The terms of the takeover offer must be the same for all holders of fungible shares in the target company.
9. Are there any requirements as to the financing of an offer?
The Securities Act does not provide strict requirements as to the financing of a takeover offer, but the National Bank of Slovakia may require the offeror to prove it has the funds required to finance the offer and the origin of those funds. Where the consideration offered is an exchange of securities for the shares to be acquired, the offeror’s authorisation to use the securities offered as consideration must be provided.
The offeror may publish a takeover offer notice offering cash consideration only if it has sufficient funds to satisfy such consideration in full; if the offeror wishes to provide another form of consideration, it may publish a takeover offer notice only if it has made all arrangements to enable such consideration to be provided.
10. Are there rules governing the maximum/minimum price which must be offered and/or the type of consideration which must be offered?
There are no rules governing the maximum/minimum price which must be offered.
11. Can different shareholders be offered different deals?
No, the terms of the takeover offer must be the same for all holders of fungible shares in the target company.
12. Is the target allowed to, or can it even be forced to, provide information for due diligence?
The Securities Act does not impose an obligation on a target company to provide information to the offeror. The target company is obliged to treat all competing offerors equally. It follows that if a target company discloses information to one potential offeror, it must disclose the same information to all bona fide potential offerors who come forward.
13. What deal protection measures may a bidder implement?
The offeror, persons acting in concert with the offeror, members of their group of companies, if they are legal entities, the target company, members of the target company’s group of companies and its shareholders are obliged to act in such a way in the preparation of the takeover offer and during the takeover offer that the securities market is not adversely affected by the takeover offer, in particular by market manipulation, and to take measures to prevent premature dissemination of information, the dissemination of false information as well as the misuse of inside information in the takeover offer.
14. Do the target directors need to engage with a potential offeror? What defences may a target deploy if it does not support the offer?
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.
Moreover, the board of directors and supervisory board of the target company must, within five days from receiving the takeover offer, make a statement on the offer. The statement must set out the views of the target company’s board of directors on: (i) whether the offer is in the interests of shareholders, employees and creditors of the target company; (ii) the impact of offer on the interests of the target company and its shareholders, creditors, and employees; (iii) the offeror’s strategic plan. Within two days after the response to the takeover offer has been drafted, the board of directors of the target company must send it to the offeror and disclose it publicly.
15. Are there any restrictions on a potential offeror dealing in shares of the target?
The Securities Act does not impose any restrictions on a potential offeror dealing in the target company’s shares.
However, if the offeror buys shares in the target company for more than the takeover offer price, they must increase the takeover offer price to match the highest price paid for the shares.
16. Can target shareholders give commitments to accept the offer? Can target shareholders sell or agree to sell their shares to the potential offeror outside the offer process?
Yes, target company shareholders may give commitments to accept the offer from the offeror.
There is no legal restriction on target company shareholders selling or agree to sell their shares to the potential offeror outside the takeover offer process.
17. Are there any special disclosure obligations in respect of share dealings during a takeover process?
Following the publication of the takeover offer, the offeror is obliged to publish, at least once a week, the status of its share of voting rights in the target company and details on the takeover offer, in particular the number and nominal value of the target company shares in respect of which the takeover offer has been accepted.
18. What would a typical timetable look like?
The offeror is obliged to notify the decision to make a takeover offer or the occurrence of an obligation to make a takeover offer to the board of directors of the target company and the National Bank of Slovakia in writing without delay.
After the receipt of the notification, the target company’s board of directors must inform the supervisory board of the target company of its contents, and the board of directors of the target company and the offeror’s competent body (e.g. its board of directors if it is a legal entity), are obliged to inform the representatives of the employees of the target company and, if there are no employees' representatives in the target company, the employees directly, of its contents.
Within ten working days from the date the notification is published, the offeror is obliged to submit a written proposal of the takeover offer to the National Bank of Slovakia. The offeror must provide documents proving such notification. In the case of a takeover offer for which the National Bank of Slovakia has appointed an expert, the time limit of ten working days starts to run from the preparation of the expert's report.
After the delivery of the written proposal, the National Bank of Slovakia:
- may within ten business days, reject a takeover offer proposal that is in violation of the Securities Act.
- may, within five working days from the date of receipt of the written takeover offer proposal, instruct the offeror to give additional information in the takeover offer proposal. The time limit for the completion of the takeover offer proposal by the offeror may not exceed 15 working days.
- will approve a takeover offer proposal that complies with the Securities Act within five working days.
Following the National Bank of Slovakia’s approval of the takeover offer, the offeror must promptly deliver the approved offer to the target company and make the offer public. The effects of a takeover offer approved by the National Bank of Slovakia will take effect on its publication.
The target company’s board of directors and the offeror’s competent body (e.g. its board of directors if it is a legal entity) are obliged to inform the representatives of the employees of the target company and, if there are no employees’ representatives in the target company, the employees directly of the contents of the offer once it has been made public.
After the expiry of the takeover offer period, which the offeror has proposed in the written proposal (this period should be between 30 and 70 calendar days), the offeror is obliged to publish the result of the takeover offer.
19. What are the key documents required?
The offer document compliant with the Securities Act and, if required, the prospectus on the offeror’s consideration shares prepared in accordance with the EU Prospectus Regulation.
20. Are there rules governing competitive bid situations?
A takeover offer may not be launched by a person acting in concert with the offeror from the time the takeover offer is made public until the expiry of the offer period.
The target company is obliged to treat all competing offerors equally.
The board of directors of the target company must promptly inform the offeror of the original takeover offer in writing of the receipt of any competing takeover offers.
The offeror of the original takeover offer may withdraw the takeover offer up to five working days before the expiry of its offer.
Shareholders of the target company who accepted the original takeover offer may, until the expiry of the offer period of the original takeover offer, revoke their acceptance of the original takeover offer and withdraw from the contract concluded on the basis of the original takeover offer without penalty.
21. Is the offeror entitled to withdraw or modify the offer?
Yes.
Withdrawal of a takeover offer is only permitted if stated in the offer document, the requirements of the Securities Act are met, and for reasons outside the offeror's or a concert party's control. An acceptance of the offer cannot be withdrawn as per its specified terms.
Amendments to a takeover offer are only permissible if expressly stated, if the requirements of the relevant Act are met, and for reasons outside the offeror's or a concert party's control. However, amendments must not worsen the original terms of the takeover offer, unless they pertain to increasing the price, exchange ratio, or other favourable terms.
It's worth noting that the withdrawal or modification of a takeover offer requires the approval of the National Bank of Slovakia.
22. Can minority shareholders who do not accept the offer be compulsorily bought out?
An offeror which has made a non-partial or unconditional takeover offer can demand the transfer of all remaining shares in the target company for fair consideration if it holds at least 95% of the shares and voting rights. Additionally, under the same conditions, the offeror can demand redemption from the successors of remaining shareholders.
23. Are there restrictions on an offeror if its offer is not successful?
There are no legal restrictions on an offeror if its offer is unsuccessful.
24. How does a company de-list? What are the requirements for de-listing?
A company may decide to de-list through a resolution of its shareholders in general meeting.
In the case of a takeover offer, if a target company’s general meeting of shareholders resolves that its shares should cease to be listed, the target company is obliged to announce a mandatory takeover offer to purchase all listed shares from shareholders who did not vote in favour of the resolution for the shares to cease to be listed at the general meeting. This rule also applies to shareholders who did not attend the general meeting.
The board of directors of the target company is obliged to notify the National Bank of Slovakia and the stock exchange on whose market its shares are traded immediately after the general meeting passes a resolution to de-list the shares.
The stock exchange is then obliged to cease trading in the shares on the listed securities market after the target company notifies it of the fulfilment of its obligations under the mandatory takeover offer.
