ROMANIA Law and Practice Contributed by: Lucian Bondoc, Bogdan Bunrau and Diana Ispas, Bondoc si Asociatii
• carry out a public offer, under the conditions stipu - lated under the Issuers’ Law; or • transfer a number of shares, for the purpose of los - ing the position unintentionally acquired. The acquisition is considered “unintentional” if it is the result of operations such as: • the reduction of the capital through the buy-back by the company of its own shares, followed by their cancellation; • the exercise of the preference right, subscription or conversion of the rights originally granted, as well as the conversion of preference shares into ordi - nary shares; or • merger/de-merger or succession. According to the Issuers’ Law, the FSA must suspend mandatory takeover bids in certain cases specifically laid down under the law, including when the issuer’s shares are suspended from trading due to the initiation of insolvency proceedings or if the issuer is subject to a reorganisation plan, confirmed by a bankruptcy judge, provided certain conditions are met. Should the circumstances that led to the suspension no longer apply, the FSA will issue a decision mandating the public takeover offer within 30 days of ascertaining that these circumstances have ceased. 6.3 Consideration Generally, in public M&A deals, the preference is for cash consideration, although the norms regulating takeover bids allow for the bidder to offer cash, or a combination of cash and securities. In the latter case, the bidder of a public exchange offer must also pro - pose a cash alternative for the securities offered in exchange, so that the investors can opt to receive either cash, securities or a combination of the two. Likewise, in non-public business combinations, the consideration is typically cash or, sometimes, shares swap. Valuing companies in the current global climate can present challenges, particularly in certain sectors, making it more difficult to bridge the valuation gap. Despite this added complexity and the challenges posed by higher inflation, deals have continued to
regain a higher degree of predictability over the past year. 6.4 Common Conditions for a Takeover Offer In public M&A deals, the relevant regulations may not explicitly address the use of conditional takeover offers. However, through interpretation, in practice, in connection with voluntary takeover bids, conditions such as achieving a minimum threshold in a volun - tary takeover bid or securing clearance/approval from the appropriate competition authorities may be con - sidered acceptable. Nevertheless, it is advisable to consult the competent authority for the most recent interpretations regarding the permissibility of submit - ting conditional offers in such deals. 6.5 Minimum Acceptance Conditions The key control thresholds in Romanian public com - panies are as follows. • The 33% Threshold – this triggers the bidder’s obligation to launch a mandatory tender offer; the threshold is also relevant for a voluntary takeover bid where the bidder intends to acquire more than this percentage of the voting rights in the target (see 6.2 Mandatory Offer Threshold ). • The 75% Threshold – if, following a takeover bid, the bidder holds 75% or more of the capital carry - ing voting rights, no restrictions on the transfer of securities or on voting rights, nor any extraordinary rights of shareholders concerning the appointment or removal of board members provided for in the articles of association of the target company shall apply. • The 90/95% Threshold – this enables the bidder to initiate the squeeze-out procedure (see 6.10 Squeeze-Out Mechanisms ). 6.6 Requirement to Obtain Financing In public M&A deals involving a takeover bid, the offer cannot be conditional upon obtaining financing, as the offer document to be submitted to the compe - tent authority for approval must include either proof of a deposited guarantee representing at least 30% of the total offer value in a bank account of the bidder’s broker (the amount to be blocked for the entire period of the offer), or a guarantee letter issued by a credit institution in the European Union or by a non-banking
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