Serbia Takeover Guide

Transcription

1 Serbia Takever Guide Cntact Marija Bjvic Bjvic & Partners

2 Cntents Page INTRODUCTION 1 ACTING IN CONCERT 2 JOINT STOCK COMPANIES (JSC) 3 MANDATORY AND VOLUNTARY TOB 4 TOB PROCESS 5 PRICE IN A TOB 7 COMPETITIVE TAKEOVER BID 8 SQUEEZE-OUT AFTER TAKEOVER BID 9 COMPETENT AUTHORITIES 9 LIMITATIONS IN APPLICATION OF THE LAW 10 serbia

3 INTRODUCTION The Serbian Law n Takever f Jint Stck Cmpanies (Takever Law), which regulates the takever bid (TOB) prcedure aims t: regulate the TOB prcess thrughly; prtect minrity sharehlders f a target cmpany; create a level playing field fr participants in a TOB. Takever Law regulates TOBs f jint stck cmpanies which have a registered seat in the territry f the Republic f Serbia, the shares f which are traded n the regulated capital market r multilateral trading facility in the Republic f Serbia r which have mre than 100 sharehlders n each last day f three cnsecutive mnths and share capital f ver EUR 3,000,000. The Takever Law regulates the cnditins and the prcedure f TOBs, rights and bligatins f participants in the prcess and prvides fr supervisin ver the prcess by cmpetent authrities, all in cmpliance with the Eurpean Unin (EU) criteria standards. The key principles f Takever Law include the fllwing: target entity s sharehlders have an equal psitin t the bidding party; bth minrity and majrity sharehlders have rights in the TOB prcess; management f the target entity acts in the best interest f the sharehlders; accurate, full and timely infrmatin must be submitted t the target entity s sharehlders; TOB prcedure must be perfrmed as quickly as pssible; the market disturbance which wuld result in a significant increase r decrease in the price f the target entity's shares is prhibited. When d the TOB rules apply? Takever Law applies t any takever f jint stck cmpanies which have a registered seat in the territry f the Republic f Serbia, prvided that shares issued by such a cmpany are traded n the rganised securities market r multilateral trading facility in the Republic f Serbia r which have mre than 100 sharehlders n each last day f three cnsecutive mnths and share capital f ver EUR 3,000,000. Currently, the nly rganised securities market in Serbia is Belgrade Stck Exchange (BSE). Takever prcedure is perfrmed thrugh the TOB as a public bid addressed t all sharehlders f the target entity fr the purchase f all vting shares. It may als be addressed fr the purchase f preferential shares. TOB rules may apply as mandatry r vluntary. The frmer applies if a legal r natural persn intends t acquire directly r indirectly, individually r jintly, shares in a target entity which tgether with the shares it already hlds in the target entity (slely r with a partner acting in cncert with it) exceeds 25% f the ttal number f shares with vting rights in that entity and in a few ther cases, as explained belw. The Law stipulates that a sharehlder wh, befre the Law came int frce, already acquired mre than 25% f the vting shares in a target entity, is exempted frm the serbia page 1

4 bligatin t launch a mandatry TOB. Hwever, if such a sharehlder expresses the intentin t cntinue acquiring shares in a target cmpany, it must act in accrdance with prvisins f Takever Law regulating a mandatry TOB. Additinally, based n the prvisins f Takever Law, the Security Exchange Cmmissin (SEC) expressed an pinin that in a case in which a majrity sharehlder f a jint stck cmpany decides t increase the share capital, the decisin n capital increase is cnsidered as an intentin t acquire shares in the target cmpany if it fulfils the abve cnditins fr the applicability f Takever Law. Therefre, fllwing the successful increase f share capital, the majrity sharehlder is bliged t launch a TOB. The exceptin t the rule related t an increase f capital is when capital is increased frm the net assets, in which case a TOB is nt required if apprved by a qualified vte f the assembly. A vluntary TOB may be launched by an entity which has acquired up t 25% f vting shares in the target cmpany. Applicable Laws and Regulatins Besides Takever Law, which is the key piece f legislatin gverning a TOB, the ther laws and regulatins relevant fr the TOB are the fllwing: Law n Capital Markets; Cmpany Law; Law n Investment Funds; By-laws gverning wrk f the Central Securities Depsitry and Brkerage Huse (CSD), SEC and BSE and by-laws and internal regulatins passed by these three institutins within the scpe f their cmpetencies. ACTING IN CONCERT The cncept f acting in cncert is relevant in situatins in which natural and/r legal persns act tgether in the prcess f acquiring shares in the target cmpany. Acting in cncert is generally defined as a situatin where persns are cperating mutually r with a target cmpany, based n an explicit r tacit, verbal r written agreement, the purpse f which is the acquisitin f vting shares, varying the exercise f vting rights r preventing ther peple in the takever bid prcess. Acting in cncert is deemed t exist in the fllwing cases: natural and/r legal persns linked with circumstances related t acquiring shares such as: time and perid f acquiring shares; place f acquiring; the manner f acquiring; agreement prvisins n acquiring; the value f acquired shares; serbia page 2

5 ther circumstances; members f the bard f directrs and supervisry bard f the cmpanies acting in cncert; members f the bard f directrs and supervisry bard acting in cncert with cmpanies in which they hld this capacity; persns prpsing appintment r discharge f bard f directrs and supervisry bard members r ther decisins requiring a qualified majrity f present vtes; natural and/r legal persns directly r indirectly cntrlling anther legal persn. A natural r legal persn shall be cnsidered cntrlling if ne f the fllwing circumstances apply: it hlds directly r indirectly 25% r mre f the capital f anther legal persn; it hlds directly r indirectly 25% r mre vting rights in anther legal persn; it hlds management rights in a legal persn based n authrity deriving frm crprate acts f that legal persn r based n a cntract/agreement/anther arrangement; it has a direct r indirect prevailing influence n the management and decisin-making prcess in the legal persn. A management cmpany, as defined in the Law n Investment Funds, manages investment r pensin funds. Cnsequences f acting in cncert In the case f acting in cncert, if an acquisitin by any persn invlved creates the bligatin t publish a TOB, such an bligatin extends t each persn acting in cncert. The bligatin t publish a TOB is deemed fulfilled if the TOB is published by any f the persns acting in cncert. Shares in the target cmpany acquired by a persn acting in cncert are t be included in the number f shares already held by the ther persn acting in cncert. JOINT STOCK COMPANIES (JSC) Intrductry infrmatin The new Cmpany Law has abandned the divisin f JSCs int clsed and pen categries. It nw has unified rules fr all JSC and recgnizes as public any JSCs which have been successfully funded by a TOB r thse where its shares are traded n the rganized market r multilateral trading facility in the Republic f Serbia. Any JSC may turn int a public jint stck cmpany. The minimum initial capital f a jint stck cmpany is RSD 3,000,000 (cca EUR 25,000). There are n limitatins as t the number f sharehlders. Shares issued by a JSC have t be inscribed in the CSD. serbia page 3

6 Applicability f TOB rules t JSCs In additin t the definitin f public JSCs in the Cmpany Law, in the definitin f a target cmpany under Takever law, a JSC is included where it has mre than 100 sharehlders n each day f three cnsecutive mnths and share capital f ver EUR 3,000,000. Cnsequently, all public JSC and all nn-public JSCs fulfilling these tw cnditins are subject t the Takever Law and a TOB fr the acquisitin f its shares. MANDATORY AND VOLUNTARY TOB Mandatry TOB Acquisitin f shares in a JSC must be dne thrugh a TOB prcedure (in the case f a mandatry TOB) if a legal r natural persn (acquirer) directly r indirectly, individually r acting in cncert, acquires vting shares in the target cmpany s that: acquired shares, tgether with the shares in the target cmpany, which the acquirer already hlds, exceed 25% f the ttal number f vting shares in the target cmpany (cntrlling threshld); after the acquisitin f less than 75% f vting shares acquired thrugh a TOB, the acquirer cntinues with the acquisitin f shares f the target cmpany; after the acquisitin f mre than 75% f vting shares acquired thrugh a TOB, the acquirer acquires an additinal 5% r mre vting shares in the target cmpany r 3% r mre vting shares f the target cmpany within 18 cnsecutive mnths. A TOB has t be addressed t all existing sharehlders f the target cmpany n equal terms and cnditins. Otherwise, it is deemed discriminatry under the law, and as such is prhibited. Vluntary TOB The acquirer intending t acquire nt mre than 25% vting shares in the target cmpany is nt bliged but is allwed, t launch a TOB (vluntary TOB). The rules gverning a mandatry TOB accrdingly apply t a vluntary TOB. Once the ntice f intentin fr a vluntary TOB is published, it cannt be withdrawn. In the case f a vluntary TOB, frm the day the ntice f intentin fr acquisitin is published until the final reprt n the TOB is published, n shares in the target cmpany held by the acquirer and persns acting in cncert with the acquirer carry vting rights. Cnditinal and Uncnditinal TOB Only a vluntary TOB may be cnditinal. Mandatry TOBs must be uncnditinal. A TOB is cnditinal if the Bidder requests the acquisitin f a predefined (by a TOB) minimum number f vting shares in the target cmpany. In this way, the bidder is bund by the TOB nly if the ffer fr at least a minimum predefined number f vting shares is accepted befre the expiry f the TOB. A TOB withut a predefined minimum number f vting shares in the target cmpany t be acquired is deemed uncnditinal. serbia page 4

7 TOB PROCESS Ntice f Intentin and the SEC Apprval Accrding t the SEC pinin, the relevant mment fr the cnstitutin f the bligatin t launch a mandatry TOB is the mment f registratin f wnership f shares with the CSD. The Bidder is bliged t publish a ntice f intentin t launch a TOB and, based n that ntice, must request the SEC s apprval t publish the TOB. Bth publishing f the ntice and requesting the SEC apprval have t be dne the next wrking day fllwing the day f the cnstitutin f the bligatin t launch the mandatry TOB. After the request is submitted t the SEC fr apprval f the TOB, the Bidder is nt allwed t change r withdraw the ntice f intentin. Dcuments t be submitted alng with the request t the SEC TOB; summary TOB; ntice f intentin; dcuments prving the status, available funds and ther data f the Bidder, apprvals f relevant authrities if needed, the average price f the shares and ther dcuments as defined by relevant regulatins. Change f a Launched TOB A submitted TOB can be changed nly in regards t: an increase f the ffered price; a change f a cnditinal ffer int an uncnditinal ffer. Apprval by the SEC f any changes t the TOB prpsed is mandatry. A TOB may be changed up t three days prir t its expiry. Opening and clsing f a TOB A launched TOB must be pen fr at least 21 days and may be pen fr 45 days at mst. The TOB is deemed pen frm the date f publicatin f the TOB in a daily newspaper. In case a launched TOB is changed, it remains pen fr an additinal 7 days. In n event may a TOB be pen fr mre than 60 days, except in the case f publicatin f cmpetitive TOBs in which case it may last up t 70 days. The Apprval f the TOB The SEC apprves the TOB within seven business days frm the day f submissin f the request and infrms the CSD f the launch f the TOB. The SEC apprves the TOB based n: cmpleteness and accuracy f data cntained in the TOB and accmpanying dcuments; price in the TOB being determined in accrdance with the Law; serbia page 5

8 The Funds whether the bidder has prvided sufficient funds fr payment fr the shares subject t the TOB. The SEC may request the Bidder t supplement r change the dcuments submitted. Befre submissin f the request t the SEC fr apprval t publish the TOB, the Bidder is required t secure funds fr the payment f shares which are the subject f TOB, in ne f the fllwing ways: depsit funds int a bank accunt r depsit securities int a separate accunt held with the CSD; have a Lan Agreement cncluded with a bank fr the TOB purpse; have a first call bank guarantee which must be valid fr at least five days fllwing expiry f the TOB. A Bidder is nt allwed t dispse f secured funds while a TOB is pen and is bliged t allw the SEC insight int the accunt balance. Withdrawal f TOB The Bidder may withdraw the TOB nly in the fllwing circumstances: publicatin f a cmpetitive TOB at a higher price; the bankruptcy f the target cmpany. Withdrawal shall be published in a daily newspaper. Clsing f the TOB The ffer made thrugh a TOB is deemed accepted by the target cmpany s sharehlder by depsiting shares n the accunt fr TOB held with the CSD. The Bidder must pay fr the depsited shares within three business days frm the date f clsing f the TOB. N payment fr depsited shares can be made prir t the clsing f the TOB. A sharehlder may withdraw depsited shares at any time prir t the clsing f the TOB. After clsing, depsited shares may be withdrawn nly if the Bidder fails t perfrm payment within the time perid prescribed by the Takever Law. Final TOB Reprt Upn clsing f the TOB and expiratin f the payment deadline fr the shares, the Bidder is bliged t publish a Final TOB Reprt within ne wrking day and t deliver the Final TOB Reprt t the BSE r the multilateral trading facility n which the shares are traded, t the SEC and t the target cmpany. Takever Law regulates the cntent f the Final TOB Reprt, which, inter alia, must cntain data n the ttal number f vting shares acquired thrugh the TOB and data n the vting shares held by persns acting in cncert with the Bidder. Target cmpany bligatins during a TOB The Bard f Directrs (BD) f the target cmpany is bliged t ntify in writing all emplyees f the target cmpany abut the TOB launched. serbia page 6

9 During a TOB, the Bidder s rights are safeguarded by the fllwing restrictins impsed by the Takever Law n the BD f the target: n new shares can be issued fr the purpse f capital increase; n additinal business r agreement which wuld have a material impact n the target cmpany s assets and/r liabilities may be undertaken/cncluded; n decisin n acquisitin/dispsal f its wn shares by the target cmpany can be passed; a TOB aimed at the acquisitin f anther JSC cannt be launched by the target cmpany. Frm the pening until the clsing f a TOB, n additinal restrictins regarding the number f vtes derived frm vting shares f a target cmpany can be intrduced by a target cmpany s Fundatin Act r Articles f Assciatin. PRICE IN A TOB Minimum price The minimum price is determined depending n whether the shares are cnsidered as liquid shares under the Takever Law. Fr Liquid Shares If the vlume f traded shares f the target cmpany in the perid f six mnths befre bligatin t launch TOB was at least 0.5% f the ttal number f vting shares and if the vlume f trade was at least 0.05% f the ttal number f vting shares in at least three mnths f that perid, the target cmpany shares shall be cnsidered liquid shares. If the shares f the target cmpany are liquid shares, the bidder is bliged t ffer at least the highest f the fllwing prices: the average weighted price f shares f the target cmpany fr the three mnths prir t publicatin f the ntice f intentin, determined n the basis f the reprts n trade n the regulated market, r multilateral trading facility; the latest market price f vting shares f the target cmpany n the regulated market r multilateral trading facility n which the shares are traded n the day befre publicatin f the ntice f intentin, with the vlume f trade equal t at least average daily trade fr the last three mnths; the price at which the bidder r persns acting in cncert with it acquired vting shares f the target cmpany in the last 12 mnths prir t publicatin f the ntice f intentin; the average weighted price at which the bidder r the persns acting in cncert with it acquired at least 10% f vting shares f the target cmpany, in the last tw years prir t publicatin f the ntice f intentin. serbia page 7

10 Fr Nn-Liquid Shares If the shares f the target cmpany are nn-liquid shares r nt included in trade n a regulated market r multilateral trading facility, the bidder is bliged t ffer at least the highest f the fllwing values: the highest price frm the listed prices related t liquid shares; the bk value f vting shares; appraised value f vting shares in accrdance with the Cmpany Law. Other relevant rules regarding price If the bidder r the persns acting in cncert with it, cntrary t the prvisins f the law, acquires r dispses f the vting shares f the target cmpany at a price higher than stipulated in Takever Law, the Bidder must ffer the higher price in the TOB. If, within ne year fllwing the clsing f the TOB, the bidder r the persns acting in cncert with the bidder acquire the vting shares f the target cmpany which was subject t the TOB, the bidder must cmpensate the sharehlders wh have accepted the takever bid fr the price difference, within seven days fllwing the acquisitin date. Payment fr shares which are the subject f the TOB may be made in mney, securities r bnds issued by the Republic f Serbia r Natinal Bank f Serbia. COMPETITIVE TAKEOVER BID Eligibility A cmpetitive TOB is ne which is launched during the curse f an already launched TOB (initial TOB) related t the same JSC. The rules and requirements gverning a TOB and a cmpetitive TOB are identical, apart frm thse related nly t a cmpetitive TOB, which are summarised belw. Any legal r natural persn is entitled t submit a cmpetitive TOB (Cmpetitr). The nly exceptins are thse wh are acting in cncert with the Bidder f the initial TOB and persns acting in the name f the Bidder f the initial TOB. Apprval f the SEC The SEC is in charge f apprving a cmpetitive TOB. It is t decide n the day the request is submitted. Immediately upn btaining the SEC s apprval, the Cmpetitr is bliged t publish the cmpetitive TOB. Intentin fr acquisitin Unlike in the case f an initial TOB, where the intentin fr acquisitin has t precede the publicatin f the TOB, in the case f a cmpetitive TOB, ntice f intentin shall nt be expressed, but the cmpetitive TOB launched immediately, that is, published immediately upn the SEC apprval. Other relevant rules Where a cmpetitive TOB fllws a cnditinal TOB, it cannt aim at the acquisitin f a higher number f shares than that f the initial TOB. serbia page 8

11 Cmpetitrs are allwed t change their bids under the same rules and within the same perid f time applicable t the changes f a TOB. Publicatin f the cmpetitive TOB at a higher price than that f the initial TOB entitles the initial Bidder t withdraw his bid. Publicatin f the cmpetitive TOB extends the initial TOB s that bth clse n the same day. Hwever, an initial TOB can in n event clse later than 70 days frm the date f pening. SQUEEZE-OUT AFTER TAKEOVER BID Takever Law changes in 2011 abandned a squeeze-ut right fr the majrity and minrity sharehlders after a successful TOB. The rules n squeeze-ut are regulated by the Cmpany law and may be triggered any time irrespective f a TOB, upn a request f a sharehlder hlding 90% f vting shares which als represent 90% f the share capital. COMPETENT AUTHORITIES Securities and Exchange Cmmissin The SEC is the authrity in charge f supervising and administering the TOB prcess. Cnsequently, all entities invlved in a TOB, that is, the target cmpany, sharehlders, Bidder, CSD and ther legal and natural persns invlved, shall at the request f the SEC, allw insight int relevant dcuments and prvide all infrmatin necessary during the curse f a TOB. Cmpetencies f the SEC in the TOB prcedure Apprving the request fr publishing f a TOB and cmpetitive TOB; apprving the request fr the change and withdrawal f a TOB and cmpetitive TOB; rdering a Bidder r target cmpany t publish additinal infrmatin, that is, crrectin f errrs with relatin t an nging TOB; rdering a Bidder t remve irregularities during a TOB; suspending a TOB and withdrawing previusly given apprval where the abve irregularities were nt remved within required perid f time. Decisins f the SEC and Remedies The decisins f the SEC are final in the administrative prcedure. An available remedy against the SEC decisins is a legal suit in an administrative dispute. Central Securities Depsitry and Brkerage Huse CSD is the authrity in charge f keeping the registry f issued securities and ther financial instruments and f clearing f securities transactins. serbia page 9

12 LIMITATIONS IN APPLICATION OF THE LAW The applicatin f TOB rules as stipulated in Takever Law is limited by a number f exceptins, the mst significant being listed belw: Acquisitin f shares f a bankruptcy debtr in bankruptcy prcedure; acquisitin f the target cmpany shares thrugh a merger f cmpanies if nly ne participant in the merger prcedure already hlds target cmpany shares; acquisitin f shares thrugh the change f legal frm f a cmpany; acquisitin f shares in a new cmpany funded thrugh merger r divisin f an already existing cmpany; acquisitin f shares fr the purpse f securing a creditr s receivables t the cmpany, in which case the creditr is nt allwed t exercise vting rights given by such shares; a sharehlder wh acquired mre than 25% f shares prir t the Takever Law cming int frce; trade with shares transferred t the Share Fund thrugh privatisatin and trade with shares ffered as a package with the Share Fund s shares; trade with shares held by the Pensin and Disability Fund; trade with shares held by the Develpment Fund f the Republic f Serbia; trade with shares held by the Republic f Serbia; trade with shares issued by cmmercial banks, whse legal and beneficial wner is the Agency fr Depsit Insurance; trade with shares issued by cmmercial banks, whse legal and beneficial wner authrises the Agency fr Depsit Insurance t sell shares n their behalf and fr their accunt; trade with shares issued by insurance cmpanies, whse legal and beneficial wner authrises the Agency fr Depsit Insurance t sell shares n its behalf and fr his accunt; in ther cases stipulated by the Law. serbia page 10