ROMANIA Law and Practice Contributed by: Lucian Bondoc, Bogdan Bunrau and Diana Ispas, Bondoc si Asociatii
11. Activism 11.1 Shareholder Activism
of shareholders to inform the shareholders of the board’s opinion and to seek approval for the imple - mentation of defensive measures. In taking these measures, the general duties of the directors apply, including observance of the legal pro - hibition against abuse of their position as directors by using disloyal or fraudulent measures, which may prejudice the shareholders. 9.5 Directors’ Ability to “Just Say No” Directors may not take measures aiming to affect a hostile bid without a decision of the EGM of share - holders. However, they can present a well-founded opinion to the shareholders and potentially prevent a business combination by persuading them of the adverse effects of the proposed transaction. 10. Litigation 10.1 Frequency of Litigation In Romania, litigation is not common in connection with M&A. 10.2 Stage of Deal M&A-related litigation is not common in Romania. 10.3 “Broken-Deal” Disputes Parties generally try to avoid actual disputes regard - ing broken deal scenarios. The degree to which this is achievable depends on the clarity of the conditions precedent and any pre-agreements that may be in place. It is crucial for companies involved in negotia - tions or deal signings to be cautious of the possibility of unforeseen and atypical situations that may impede the closure of the deal. In this regard, it may be more effective to focus less on listing additional force majeure events and similar provisions and more on being meticulous when defin - ing material adverse change events. An approach that takes into account the potential impact on the deal, rather than a specific cause of change, may be more appropriate.
While shareholder activism is not a universal phenom - enon, it has become increasingly prevalent in recent times. Activist shareholders still face significant hur - dles, including the challenge of accessing adequate resources and sufficient information. In this context, activist shareholders tend to concentrate on exam - ining intra-group and related-party arrangements, directors’ responsibilities towards the company, and potential conflicts of interest at the level of the main shareholder. 11.2 Aims of Activists Activists seek to encourage companies to enter M&A transactions as they look for opportunities to exit or consolidate their position. 11.3 Interference With Completion Activists do occasionally seek to interfere with the completion of announced transactions, but this is uncommon in Romania.
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