BULGARIA Law and Practice Contributed by: Yordan Naydenov, Mihail Vishanin and Hristian Gueorguiev, Boyanov & Co.
5.5 Definitive Agreements It is permissible for tender offer terms and conditions to be documented in a definitive agreement. In pri - vate M&A transactions, this is the common way of documenting the terms and conditions of the offer. In public M&A transactions, the tender offer contains the terms and conditions of the offer. A tender offer is accepted by means of an express statement and the depositing of the documents certifying the shares with an investment firm or with the central securities depository. The transaction is considered concluded at the time of expiration of the term for acceptance of the offer, and payment should be effected within sev - en days as of conclusion of the transaction. It is also possible for OTC deals for shares in public companies to be executed via written agreements and exchange of buy/sell orders addressed to the central deposi - tory of securities, yet these deals are not considered concluded at the stock exchange and there are no tax benefits for the seller. 6. Structuring 6.1 Length of Process for Acquisition/Sale In public M&A transactions, the timeframe of the pro - cess, once the tender offer is launched, is generally regulated by law. As noted in 5.4 Standstills or Exclu- sivity , 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. In private M&A transactions, the timeframe depends on several factors, such as the type of the transac - tion (share deal vs going concern deal vs asset deal), the legal form of the target (limited liability company vs joint-stock company), the size and complexity of the business of the target, and the necessity of merg - er control or other regulatory clearance. In terms of allowing the possibility to carve out certain assets or liabilities from the scope of the deal, going concern/ asset deals may have an advantage over share deals. However, the finalisation of going concern/asset deals may be more time-consuming, in light of the require - ment for prior notification to the revenue authorities and to affected employees and the necessity of trans - fer or renewal of certain regulatory permits.
In both cases, the time needed to get concentration clearance/regulatory permit/FDI clearance needs to be factored in. 6.2 Mandatory Offer Threshold In public M&A transactions, any person that acquires more than one-third of the votes in the General Meet - ing of a public company, provided no other person holds more than 50% of the votes in the General Meeting, must make a tender offer to the voting share - holders for purchase of their shares. The tender offer must be made through registration with the Financial Supervision Commission within 14 days of the rel - evant acquisition, or within one month of the registra - tion of the reorganisation or decrease of the capital, if the threshold is passed due to reorganisation or can - cellation of shares. The obligation described in the paragraph above also arises for any person that acquires more than 50% of the votes in the General Meeting of a public company, as well as for any person that acquires more than two- thirds of the votes in the General Meeting of a public company. If a person simultaneously exceeds more than one of the thresholds referred to above, within 14 days of the relevant acquisition, or within one month of the registration of the reorganisation or decrease of the capital exceeding the lowest threshold, such person must register a single tender offer. The tender offer registration time limit is the period that would expire first, if an obligation arose to file separate tender offers upon exceeding each threshold. 6.3 Consideration In both public and private M&A transactions, cash consideration is the principle. In public M&A transac - tions, the law also provides the opportunity for the bidder to offer to the rest of the shareholders, instead of cash, exchange of the acquired shares for shares which will be issued by the bidder for this purpose. In private M&A transactions, combined considera - tion of cash and equity is sometimes also applied, especially if the acquirer is a public company (or has a parent company which is publicly traded), or if the management of the target is also the seller or one of
222 CHAMBERS.COM
Powered by FlippingBook