Upcoming changes in the regulations regarding tender offers for shares of public companies

The main change in this respect is the liquidation of the provisions of Art. 73 and 74 of the Act on the obligation to announce a Tender Offer – both subsequent and prior – concerning exceeding the thresholds of 33% and 66% of the total number of votes at the general meeting, respectively, and replacing them with the sole obligation to announce a follow-up Tender Offer for the purchase of all remaining shares of the company (i.e. up to 100 %) if the threshold of 50% of the total number of votes has been exceeded. The new wording of Art. 73 sec. 1 of the Act, stipulates that if the threshold of 50% has been exceeded, it is required to publish a follow-up Tender Offer for all remaining shares of the company within 3 months of this exceeding.

Apart from establishing the threshold of 50% of the total number of votes as the threshold for taking control over a public company, resulting in the obligation to announce a Tender Offer for its remaining shares, significant changes introduced by the Amendment to the Act in the scope of the Tender Offer also include:

1) introducing a voluntary tender offer mechanism for all remaining shares of a public company;

2) taking into account the indirect purchase price of shares in a public company when determining the minimum price in the Tender Offer;

3) clarifying the provisions on securing the price for the shares acquired under the Tender Offer;

4) introducing joint liability of all entities obliged to announce the Tender Offer;

5) clarifying the liability rules of the entity acting as intermediary in the Tender Offer;

6) introducing an equalization mechanism by the summoner – to all entities that sold the shares in the Tender Offer – the price paid for the shares, in the event of a legally valid court decision requiring the shareholder to pay a higher price for shares than the price paid to them in the Tender Offer.

Undoubtedly, resigning from the intermediate threshold of 33% and setting a uniform threshold for taking over control of the company at a level lower than 66% ensures compliance with the regulatory standard that is generally applicable on the capital markets of European Union Member States. However, it should be borne in mind that such a change may have a significant impact on the situation of holders of large blocks of shares in public companies, the ownership of which was shaped under the provisions of the Act in the wording before the Amendment. The amendment, the provisions of which amending the Act will enter into force on 30 May 2022, regulates not only the cases where, from that date, an increase in the ownership of a given entity occurs in a way that exceeds the 50% threshold, but also in a special way in situations where this threshold was exceeded before that date or its exceeding results from previously occurring, specific events.

The above-mentioned issue is regulated by Art. 28 of the Amendment, which in the following cases – if a given entity (“Entity”) holds more than 50% of the total number of votes as at the date of entry into force of this provision, i.e. 30 May 2022 (“Date”) or earlier – requires the announcement of a Tender Offer for all remaining shares of a public company (pursuant to Art. 73 (1) of the Act in the new wording):

when, after the Date, the Entity increases its shareholding (in any scale, i.e. even by one share) after it has achieved more than 50% of the total number of votes after the Date as a result of the Tender Offer up to 66%, announced under the “old” regulations Act in connection with exceeding the threshold of 33% (Article 73 paragraph 1 or paragraph 2 point 1);

 when, after the Date, the Entity increases its shareholding after having exceeded the 33% threshold, it carried out a follow-up call up to 66%, announced under the “old” provisions of the Act (Article 73 (2) (1)), having over 50 % of the total number of votes both on the date of the Tender Offer announcement and on the Date;

 when, after the Date the Entity increases its shareholding after having held more than 50% but less than 66% of the total number of votes on the Date;

 when, after the Date, the Entity increases its shareholding after it held more than 50% but less than 66% of the total number of votes on the Date, and its share in the total number of votes increased after the Date as a result of an ordinary share capital increase, the notification of which to the registry court occurred before the Date.

 The amendment also determines that if before the Date, under the provisions of the Act before the Amendment, an obligation was imposed on the Entity to announce a follow-up call concerning exceeding the threshold of 33% or 66%, respectively, this obligation shall be performed after the Date according to these “old” provisions. Moreover, these provisions shall apply to any summons announced and outstanding before the Date.

It should be noted that the above specific provisions of Art. 28 of the Amendment, which creates the obligation of the Tender Offer, will also apply to cases where there is an agreement between the shareholders of a public company within the meaning of Art. 87 sec. 1 point 5 of the Act (concerning the acquisition of shares, conducting a permanent policy towards the company or consensual voting at its general meeting), where the votes from shares held by individual shareholders of the company (who are parties to the agreement) are summed up.