CROATIA Law and Practice Contributed by: Iva Basarić, Marija Gregorić and Matija Skender, Babic & Partners
• pre-emptive rights provisions; • provisions on reserved matters; and • the allocation of profit in ratios other than the share ratio, etc. Certain types of shareholders’ agreements made between shareholders of publicly traded joint stock companies which hold a 20% or larger share of the company must be reported to the respective com - pany, and the publicly traded joint stock company is required to notify the court registry of the fact that such shareholders’ agreement has been made, but the shareholders’ agreement is not required to be deposited with the court registry. 6.9 Voting by Proxy Shareholders are allowed to vote by proxy in Croatia. In joint stock companies (ie, corporations), the powers of attorney granted to the proxies must be made in writing, but additional formalities (such as notarisation requirements) may be imposed under the company’s Articles of Association. On the other hand, certain decisions in Croatian lim - ited liability companies may be voted on/made only on the basis of the notarised written power of attorney (although again, even where the law does not specifi - cally require the power of attorney to be notarised, such a requirement may be imposed under the Arti - cles of Association). 6.10 Squeeze-Out Mechanisms In Croatia, squeeze-outs are possible only in joint stock companies (which may be private or public). In private joint stock companies, a shareholder hold - ing at least a 95% share in the company may request the shareholders’ meeting to squeeze out the remain - ing minority shareholders, subject to the payment of adequate compensation. Relevant shareholders’ res - olutions cannot be challenged on the grounds that the compensation is not adequate, but the minority share - holder may request judicial review and request the competent court to determine the adequate amount. In addition, under the Croatian Takeover Act, an offer - or and persons acting in concert with the offeror which after the takeover offer hold at least a 95% sharehold -
ing are allowed to squeeze out the minority sharehold - ers in a public joint stock company, subject to provid - ing just compensation to the minority shareholders. The squeeze-out right may be exercised within three months from the date of expiry of the takeover offer. The request to implement the squeeze-out is filed with the SKDD, and is subject to the notification of minority shareholders, the target company and market opera - tor, and the local regulator of the fact that the request for the implementation of the squeeze-out has been made (this needs to be published as well). A deposit needs to be made or a bank guarantee provided in order to guarantee payment, and all the costs of the In general, irrevocable commitments to tender or vote are not frequent in Croatia but may most typically be used with respect to the acquisition of shares in companies where a smaller, limited number of share - holders hold a large portion of the company. It is not uncommon in those situations for such shareholders to be approached in advance, with the aim of securing their commitment. process are borne by the offeror. 6.11 Irrevocable Commitments This being said, the Croatian Takeover Act provides that the shareholder is allowed to withdraw from accepting the takeover offer at any time before the expiry of the takeover offer, and this right cannot be waived. Also, the offeror cannot rely on the state - ment of the shareholder waiving its right to withdraw from accepting the takeover offer. In this regard, with respect to publicly traded companies, an irrevocable commitment may be regarded as void if the share - holder decides not to go through with the sale to the offeror.
7. Disclosure 7.1 Making a Bid Public
If a transaction concerns the acquisition of shares in a private company, there is no requirement to make the bid public until the transaction is closed (although general information on the contemplated transaction will often be made public after signing if signing and closing do not occur on the same day, noting express -
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