BULGARIA Law and Practice Contributed by: Yordan Naydenov, Mihail Vishanin and Hristian Gueorguiev, Boyanov & Co.
members of the management bodies and the public company’s staff, including any material changes in the terms and conditions of the employment contracts. In particular, the bidder’s strategic plans for the two merged companies and regarding the likely implica - tions of the tender offer on the employees must be included in the information provided. In addition, infor - mation about the locations of the companies’ places of business and potential withdrawal from trading on a regulated market must be included as well. Public companies are obliged to disclose a deal in accordance with the principles of Article 17 of the EU Market Abuse Regulation (Regulation (EU) No 596/2014) (MAR). Hence, an analysis on a case-by- case basis should be made as to whether and when the information about the deal is to be disclosed. In principle, a public company should inform the public as soon as possible of any inside information which directly concerns that public company. According to Article 148б of the Public Offering of Securities Act, a public company is obliged to announce to the public, within three days of its receipt, among other things, any notification for acquisition or transfer of shares, where the voting rights associated with such shares would go above the threshold of 5% or would fall below that threshold, or a multiple of 5% of the number of voting rights in the General Meeting of the public company. 5. Negotiation Phase 5.1 Requirement to Disclose a Deal There are no specific requirements regarding the dis - closure of a private M&A. In many cases, the general public learns about a planned transaction through the announcements made by the CPC or other regulatory authorities about the opening of a procedure for issu - ing of a concentration clearance or regulatory permit. 5.2 Market Practice on Timing Non-compliance with the disclosure requirements may lead to serious financial sanctions. Therefore, in theory, the timing of disclosure should not differ from the legal requirements. However, there might be cases
of discrepancies between the practice on timing and the legal requirements. 5.3 Scope of Due Diligence In private M&A transactions, there are standard areas which are covered in almost all legal due diligence processes, such as title over shares, arrangements with the management, contracts with clients and sup - pliers, employment, hybrid or remote working models, litigation, relationships with state authorities and data protection. Depending on the specifics of the sector in which the target operates, some other areas of focus may be added, such as title over real estate, IP rights, regulatory licences and permits, etc. In public M&A transactions, the legal due diligence process is usu - ally based on public information and more in-depth analysis, and if it is based on non-public information, this would be possible subject to the restrictions upon disclosure of information provided by the legislation and subject to compliance with the insider trading and anti-market abuse requirements imposed by the MAR legislation. 5.4 Standstills or Exclusivity Exclusivity and standstills are common in negotiated private M&A transactions. Standstills are also com - mon in private M&A transactions organised as auc - tions, but exclusivity is agreed at a later stage of the auction process, when one or a few of the bidders are shortlisted. The restrictions over the seller may cover the due diligence period through to the negotiation process until a definitive agreement is signed. Stand - still arrangements are not common in public M&A transactions. In the context of tender offers, the prin - ciple of ensuring equal treatment of the shareholders, enjoying equal status in the company subject to the tender offer, and protection of the other shareholders upon acquiring control of the company applies. The tender offer must specify the term for its acceptance, which must not be shorter than 28 days or longer than 70 days after the date of publication of the tender offer. If there is a competitive tender offer, then the term of the original tender offer is to be extended until expiry of the term for acceptance of the competitive tender offer.
221 CHAMBERS.COM
Powered by FlippingBook