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Amendments to Act on takeover of joint stock companies

16/01/2014

On 29th November 2013 the Croatian Parliament enacted the new Act on takeover of joint stock companies. Below are the most important changes:

  1. The definition of the target company, i.e. the company that is the subject of takeover, has been changed. The definition no longer includes the company that has more than 100 shareholders and whose share capital amounts to at least 30,000,000.00 HRK, but only the company that is listed on the stock exchange.
  2. The procedure of publishing the takeover bid is simplified in a way that a single threshold of 25% is introduced and the additional and final thresholds of 10% and 75% are abolished.
  3. The price in the takeover bid is regulated in a more detailed way so that it determines the value of non-liquid shares in a fair way. The offeror has to offer the higher of:
    a) the highest price for which he bought the shares in the period of 1 year before the obligation to publish takeover bid arose; or
    b) weighted average price if it is higher than the price stated under a) above. For liquid shares, the weighted average price is calculated as a weighted average of all prices achieved on the stock exchange in the 3 months preceding the day on which the obligation to publish takeover bid arose. For non-liquid shares, meaning the ones which have been traded for less than 1/3 of the trade days in the period of 3 months preceding the day on which the obligation to publish takeover bid arose, the highest price for which the offeror bought shares in the period of 1 year before the obligation to publish takeover bid arose is compared with the price from the fair price study that has been audited by an independent official auditor.
  4. The announcement of takeover doesn't have to be done in daily newspapers anymore, only in the Official gazette and via stock exchange.
  5. Institute of loss of vote is moderated. The right to vote on the basis of target company shares is lost when the decree of the Agency in which it is decided if there is a duty to announce the takeover bid becomes binding and final.
  6. Administrative procedures against decrees of the Agency became urgent. The decision now needs to be reached within 6 months.
  7. The Agency receives a new power – it can decide with a decree that there is no exception as to the duty to announce the takeover offer or that the exception has been abused.

Authors

Portrait of Hrvoje Bardek
Hrvoje Bardek
Counsel
Zagreb