POLAND Law and Practice Contributed by: Agnieszka Janicka, Krzysztof Hajdamowicz and Jarosław Lorenc, Clifford Chance LLP
interests of the company, especially when it is not able to secure the final outcome of the transaction, as this is dependent solely on the individual decisions of the shareholders. Any agreements between a prospective bidder and the target company are therefore usually very soft and are primarily to enable access to the If a bidder does not seek 100% ownership of the tar - get company, they can secure additional governance rights by entering into agreements with other share - holders (eg, shareholder agreements) or requesting additional corporate rights to be included in the arti - cles of association of the target company. company for due diligence purposes. 6.8 Additional Governance Rights It must, however, be noted that in the context of listed companies in Poland the shareholder agreement must be drafted carefully in order to avoid the creation of an “acting in concert” situation, which could trigger disclosure and tender-offer obligations for the parties to the agreement. Under Polish law all entities bound by a written or oral agreement on: • the indirect or direct acquisition of shares in a pub - lic company or the taking up of shares as a result of an offer not being a public offering of shares of a public company; • voting in concert at the general shareholders’ meeting; or • conducting a long-term policy in respect of the company, are treated as parties “acting in concert”. Additional corporate rights included in the articles of association of publicly listed companies may include the individual personal right of a shareholder to appoint a member or members of the supervisory board or even a management board. 6.9 Voting by Proxy Voting by proxy is permissible in Poland but, given that a takeover transaction is generally a matter between the bidder and the target company’s shareholders, obtaining any shareholders’ resolution to launch and/
or complete a tender offer is usually not required. Vot - ing by proxy therefore has limited relevance for these types of transactions. 6.10 Squeeze-Out Mechanisms Polish law contains a procedure allowing a bidder to acquire compulsorily the shares in a listed target com - pany held by the minority shareholders. This can be done by acquiring 100% of the shares of the target company once the bidder has acquired 95% or more of the target company’s shares (or more precisely vot - ing rights from these shares). However, this procedure may only be applied to Polish public companies. In the case of a foreign issuer of shares this procedure, if used, would be regulated by the corporate laws in its jurisdiction of incorporation and may differ. In order to initiate a squeeze-out, a shareholder (indi - vidually or together with other shareholders) must hold at least 95% of the voting rights in the target company. It is important to note that this procedure may only be initiated within three months following the threshold being crossed. The squeeze-out procedure is a relatively quick and automatic process that sees the bidder acquire all of the outstanding shares from the minority sharehold - ers without their consent. The squeeze-out process typically lasts less than a month and comprises two stages: • the non-public stage, initiated by way of providing a squeeze-out document to the PFSA/KNF for its review (this lasts 14 business days); and • the execution phase, during which the squeeze-out document is published and the process is con - cluded. Unlike in a tender offer, the period during which a squeeze-out offer must remain open is not pre - scribed by law. Instead, it is generally up to the entity announcing the squeeze-out procedure to decide how long it will be open. This is because in this case the procedure is automatic and no action on the part of the minority shareholders is required. All the necessary actions are performed by the Nation - al Depository for Securities and the brokers holding
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