CMS Expert Guide to Public Takeovers in Austria

Yes. The Takeover Act (Übernahmegesetz, TA) regulates public takeover offers regarding shares of Austrian listed companies. The Takeover Commission (Übernahmekommission, TC) is the statutory body responsible for all matters relating to the TA.  

• Mandatory offers 
• Voluntary tender offers (including partial offers) 

Yes. Under the TA, the offeror has to appoint an independent and qualified expert, who will act as an adviser throughout the takeover offer and ensure that the offer circular complies with the legal regulations. Similarly, the target company is under an obligation to appoint an independent and qualified expert, who will act as an adviser, who shall oversee the actions taken by the management and supervisory boards of the target company. 

Yes, a mandatory offer to all holders of equity instruments is required, where the offeror (or a group of persons acting in concert) acquires a controlling shareholding in a target company, i.e. a stake representing more than 30% of the permanent voting rights. Substantial share acquisitions (3% or more within any calendar year) by a shareholder holding more than 30% but not more than 50% of the voting rights will also trigger a mandatory offer obligation (“creeping-in”).  

Certain statutory exceptions to the mandatory offer requirement apply. Where the ≥ 30% shareholding does not provide the offeror with effective control over the target company or where no change of control in terms of economic interest has occurred (e.g., in case of intra-group transfers of shares), the obligation to make a mandatory offer does not apply.  

Given the typical shareholding structure of Austrian listed companies, takeover offers are typically mandatory offers triggered by the acquisition of a controlling interest from one or from a small group of selling shareholder(s).  

Alternatively, a voluntary tender offer seeking control of the target company can be made. Tender offers are subject to a statutory acceptance condition in respect of shares representing more than half of the shares to which the offer relates (i.e. of all shares except for the shares held by the offeror or persons acting in concert with the offeror by the time the offer is launched).  

Schemes of arrangement are not generally available in Austria. The offeror will therefore have to meet the requirements for a squeeze-out in order to achieve an acquisition of 100% of the target company’s shares.  

The offeror, its concert parties and advisers have to ensure confidentiality regarding their intentions of making a takeover offer. The administrative bodies of the target company (management board and/or supervisory board) may be notified of the offeror’s intentions in which case the target company’s boards are subject to the same confidentiality obligations as the offeror.  

The offeror is required to publicly announce its offer intentions: 

• in the event of untoward price movements in the target company’s securities or rumours and speculation concerning an impending takeover offer caused by the offeror’s intentions 
• once a decision of the offeror’s supervisory and management boards (or equivalent corporate bodies) to make a takeover offer has been made 

The takeover offer and the offer circular must be submitted to the TC within 10 trading days after the announcement. The TC may grant an extension up to 40 trading days at the offeror’s request. A mandatory offer must be submitted to the TC within 20 trading days after the offeror has obtained the controlling shareholding. The TC has up to 11 trading days to review and approve the offer. Unless the TC has disapproved the offer, the offeror is under an obligation to publish the offer within 12 to 15 trading days after its submission to the TC. 

The offeror may, but is under no obligation to, approach the target company before submitting the offer to the TC.   

Offer period: 

The offer period must last at least 4, but not more than 10 weeks upon publication. At the end thereof, the offeror must immediately publish the results of the takeover offer. 

During the takeover offer, the target company shall not frustrate the takeover offer and not act in a way that could influence the decision-making of the shareholders or prevent the success of the takeover offer. 

For mandatory offers, only conditions that are required by law are permissible, such as regulatory approvals or merger control clearance.  

For other voluntary offers, certain conditions can be applied (in addition to conditions required by law), as long as these conditions are deemed objectively justified and their fulfilment is not within or at the discretion of the offeror. Examples of conditions which have been approved by the TC include: 

• Acceptance conditions exceeding the statutory threshold (e.g.: 75% or 90%); 
• Certain MAC clauses; 
• No insolvency; 
• Absence of material changes in the capital structure of the target company; 
• Absence of competing bids; and 
• Approval by the offeror’s shareholders. 

The offeror must ensure that, prior to launching the offer, financing for the entire cash offer (assuming full acceptance of the offer) is in place by way of free cash, open credit lines or a firm financing commitment from a financial institution. A bank guarantee will usually not be required.  

For a share exchange offer, the offeror must ensure that a sufficient number of its shares are available or can be issued by way of a capital increase or the utilisation of authorised capital. 

Availability of financing (as of the settlement date) must be confirmed by the offeror’s independent expert. 

For mandatory offers the minimum offer price is the higher of (i) the average volume-weighted share price of the target company’s shares during the six-month period preceding the announcement of the offeror’s intention to make a takeover offer, and (ii) the maximum consideration paid by the offeror (or parties acting in concert with the offeror) for the target company’s shares in past transactions during a one-year period preceding the filing of the offer circular. 

The weighted average share price may be disregarded by the TC if the relevant shares are not deemed sufficiently liquid. 

Transactions of the offeror (or parties acting in concert) will, within nine months after the end of the acceptance period and for consideration in excess of the offer price, lead to a retroactive increase in the offer price. 

Mandatory offers have to be for cash or include a full-cash alternative.   

The TA does not regulate the offer price for voluntary offers. Some restrictions may be derived from the principle of equal treatment, e.g., the requirement for the ratio of offer prices for different classes of shares or other equity instruments being reasonable.  

No. Due to the principle of equal treatment of all shareholders, the offeror is under an obligation to offer shareholders of the same class the same price. If individual shareholders are offered a better deal, this will lead to an automatic increase in the offer price.    

The target company’s management is under a general obligation to keep sensitive information confidential. 

The target company’s management may permit a due diligence process by the offeror if it deems this to be in the target company’s best interest, but it is under no obligation to permit an offeror to undertake due diligence. 

Prior to the announcement of the offeror’s intention to make an offer, the target company and its employees involved in any due diligence exercise have a continuing duty of confidentiality in relation to the offer.  

There is only limited Austrian case law relating to deal protection measures. 

Pre-launch stakebuilding by the offeror will generally be permissible subject to takeover law and insider regulations (but may trigger a requirement to disclose the offeror’s intention to make an offer).  

The stipulation of break fees payable by the target company is rare, as this must be disclosed in the offer circular and an excessive fee will generally be deemed in violation of the TA and therefore unenforceable. Protective undertakings in favour of a particular offeror are only permissible if they are in the best interest of the target company (subject to the board neutrality rule preventing the target boards from any actions which may jeopardise the success of the offer or influence the decision-making process of shareholders). 

Under the TA, the target company management and supervisory boards are under no obligation to engage with a potential offeror or facilitate its offer (such as by providing due diligence information). However, target company boards are subject to their general duties to act in the company’s and shareholders’ best interests which may require engagement with a particular offeror.  

As a general matter, the directors of a target company may not carry out frustrating actions. Any potentially frustrating measures, except for the search for competing offerors, require an affirmative vote of the target company’s shareholders.  

Any open market purchases of target company shares by the potential offeror prior to the announcement of the offer will be subject to the regulations of the MAR and the rules on disclosure of substantial shareholdings.  

Any purchases by a potential offeror (or its concert parties) during the 12-month period prior to the filing of the offer circular with the TC will set an (additional) floor on the consideration which may be offered by the offeror under the offer. 

The offeror and its concert parties are prohibited from selling shares in the target company during the offer period. See Question 16 for purchases during the offer period.  

Certain exceptions for the benefit of banks as offerors apply.  

Target company shareholders may give irrevocable undertakings or statements of intent to accept an offer prior to the offer being launched or during the offer period. This is also the case for target company directors, where giving an undertaking to accept a particular offer as a shareholder would not per se be a breach of the board neutrality rule. 

The offeror (or its concert parties) may acquire shares in the target company outside the offer process. If the terms are more favourable to the selling shareholder than the terms of the offer, the offer is to be improved simultaneously (in the absence of such improvement by the offeror the offer is deemed improved as a matter of law). 

The offeror is obliged to publicly disclose any dealings in target company shares during the offer period immediately. 

A typical timetable would look as follows: 

1. Announcement of intention of making a takeover offer 
2. Before filing of offer circular to the TC: Preparation of offer circular + preparation of expert’s report including a statement about the financial status of the offeror 
3. 10 days after announcement: Filing of offer circular and review thereof by the TC 
4. 12 - 15 days after filing: Publication of offer circular if permitted by the TC 
5. 10 days after publishment: Target company must publish a response with a report of their expert regarding the published offer circular 
6. Offer period for acceptance (lasting 4-10 weeks) 
7. Immediately after offer period: Publication of results 
8. Additional: further acceptance period, if necessary (e.g.: in the case of mandatory bids; 3 months after publication of results) 

Key documents required in the context of a public offer in Austria include: 

• Offer circular (Angebotsunterlage) in compliance with the requirements of the TC (including in the case of a paper offer certain information on the securities to be offered by the offeror) 
• Report of the offeror’s independent expert 
• Irrevocable undertakings and/or standstill agreements of target company shareholders 
• Financing documentation 
• Response (Äußerung) of the target company’s management and supervisory boards  

Report of the target company’s independent expert  

Yes. If a competitive offer is launched target company shareholders who have accepted the first offer are entitled to withdraw their acceptance at the latest 4 trading days prior to the end of the acceptance period of the first offer. Likewise, prior acceptances may be withdrawn, if one of several competing offers is improved. 

The offer period of the first offer is deemed extended until the end of the acceptance period of the first offer. 

Voluntary offers may be withdrawn, provided that the right of withdrawal is stipulated in the offer circular and the specified trigger events are outside the offeror’s sphere of influence. 

The offeror can only improve the offer, but the improvement of the offer will then be valid for everyone. 

Yes, if following the offer the offeror has at least 90% of the target company's voting share capital and at least 90% of the target company’s voting rights. 

In the context of a successful public takeover offer a simplified squeeze-out procedure is available, if the resolution on the squeeze-out resolution is adopted within three months after the end of the offer period; and the offeror has acquired 90% or more of the shares to which the offer relates. 

A rebuttable legal presumption of adequacy of the offer price per share as squeeze-out compensation applies. Minority shareholders cannot block the squeeze-out, but they may initiate judicial proceedings and request an independent review of the compensation offered to them. 

Following an unsuccessful offer, the offeror and its concert parties will generally be barred from making a public takeover offer for the same target company for a period of one year from the announcement of the lapse of the offer. The TC may shorten this exclusion period, if this is in the interest of the target company and its shareholders. 

A delisting can occur after a public takeover offer followed by a squeeze-out, if the minimum free float requirement under the relevant listing rules is no longer met. 

Furthermore, a delisting can be initiated if: 

• the target company’s shares have been listed for at least 3 years 
• the general meeting of the target company resolves with a majority vote of at least 75% that the listing shall be withdrawn  

Minority shareholders are adequately protected through a public takeover offer meeting the requirements of a mandatory offer.