ROMANIA Law and Practice Contributed by: Lucian Bondoc, Bogdan Bunrau and Diana Ispas, Bondoc si Asociatii
6.9 Voting by Proxy For companies listed on regulated markets, sharehold - ers can grant a valid proxy – general or specific – to their representatives. A general proxy may be granted for a maximum of three years (unless a longer period is expressly agreed upon) to vote on matters pertain - ing to the general meeting of shareholders (GMS) of a specific issuer or a category of issuers. General prox - ies can only be granted to an authorised intermediary or a lawyer. In non-public companies, voting by proxy is permit - ted, subject to certain limitations prescribed by law or the by-laws of the company in question (eg, power of attorney is granted for a single and specific share - holders meeting; the proxy may not be a member of the company’s managing bodies; and publicity rules must be observed). 6.10 Squeeze-Out Mechanisms Squeeze-out procedures are regulated in Romania and to date have been applied quite often in respect of publicly traded companies. Following a tender offer addressed to all shareholders and for all their shares, the bidder can compel those shareholders who have not subscribed to the offer to sell all their shares at a fair price, if one of the following conditions is met: • the bidder holds at least 95% of the total number of shares with voting rights and at least 95% of the exercisable voting rights; or • the bidder has acquired, within the takeover offer, shares representing 90% of the total number of shares with voting rights and at least 90% of the voting rights targeted in the offer. Current regulations stipulate a maximum three-month period from the completion of the tender offer for the “supermajority” shareholder to exercise their squeeze- out right. Sell-out procedures are also governed by regulations and apply when the bidder meets one of the condi - tions described above. Under a sell-out procedure, the minority shareholder who did not subscribe to the
financial institution registered in the special register kept by the National Bank of Romania covering the entire value of the offer, issued in favour of the bid - der’s broker and valid until the settlement date of the transaction related to the offer. A non-public business combination may be condi - tional on the bidder obtaining financing, although the condition usually consists of requiring the bidder to prove the financial capacity to ensure the payment of the consideration, whether or not with additional financing. Furthermore, for obvious reasons, sellers take a cautious approach to bidders who have not yet secured financing. 6.7 Types of Deal Security Measures During the bidding phase, buyers typically do not have the opportunity to utilise deal security meas - ures. However, there are frequent attempts to negoti - ate break-up fees and matching rights. With respect to managing the “pandemic risk” dur - ing the interim period, parties generally exclude pan - demic-related causes from activating hardship, force majeure, and material adverse change/event clauses. This is because the pandemic is no longer consid - ered the unforeseeable “wild card” that it was initially; instead, the responsibility for such risk is generally borne by the buyer. 6.8 Additional Governance Rights Beyond its shareholdings, a party may seek addition - al safeguards within the company’s decision-making process by ensuring representation for its appointee(s) on the managing bodies. This allows them to actively participate in decisions that could negatively impact the appointer’s interests. Pre-agreeing on the selec - tion of company auditor(s), among other things, can further enhance this protection. In companies listed on the regulated market, the members of the board of directors can be selected by applying the cumulative voting method, at the request of a significant shareholder. The cumulative voting is a means to strengthen the possibility of minority share - holders electing a director.
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