CZECH REPUBLIC Law and Practice Contributed by: Petr Janů, Vladislav Klimeš and Leoš Vavřík, BADOKH
4.4 Dealings in Derivatives Derivatives transactions are permissible in the Czech Republic. Financial derivatives are traded either over the counter (OTC) or on traditional exchanges. 4.5 Filing/Reporting Obligations A person shall notify the company (and the Czech National Bank, in the case of a publicly traded com - pany) once such person reaches, exceeds or falls below the thresholds stated in 4.2 Material Share- holding Disclosure Threshold . Czech competition law further stipulates certain notification requirements if the acquisition of shares would establish control over the company. 4.6 Transparency When acquiring shares in private or public compa - nies, shareholders do not have to reveal their intention regarding the purpose of the acquisition. As an exception to the above, a bidder (shareholder) in the case of a public company shall publicly announce that the bidder has made a final decision to initiate the steps leading to a takeover bid or that circumstances have arisen that have given rise to a bid obligation. The bidder shall then include information regarding its intention with the company in the bid (such as chang - es to the current business, changes concerning the employees, and so forth). There is no obligation to disclose the details of the transaction (or any other information related thereto) to the public if the deal is private (ie, the parties to the transaction as well as the target company are private companies). If the deal is not private, the bidder shall disclose the deal without undue delay. Such disclosure shall include (i) information that the bidder has decided to make a takeover bid (voluntary takeover bid) or, in the case of a natural person, that they have taken a final decision to initiate the steps immediately leading to a takeover bid, or (ii) that circumstances have arisen 5. Negotiation Phase 5.1 Requirement to Disclose a Deal
tant to note that there are no triggers for private com - panies or for stakebuilding in a public company that remains below the mandatory offer threshold. 4.2 Material Shareholding Disclosure Threshold Under the relatively strict Czech implementation of the Transparency Directive (2004/109/EC), a person shall notify the company and the Czech National Bank if its direct or indirect share of voting rights of public com - panies reaches, exceeds or falls below the thresholds of 1% (or 3%, depending on the amount of registered capital), 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50% and 75%. The Czech National Bank publishes the notifications on its website, and the general public may access such data. The company, as the issuer, is also required to com - ply with the notification requirement if it acquires its own shares above the said thresholds. However, the company can fulfil this requirement by publishing the notification on its website. For private companies, there are no such thresholds, but information about shareholders and their respec - tive share amounts is publicly available in the Com - mercial Register in the case of limited liability com - panies. 4.3 Hurdles to Stakebuilding Companies operating in the Czech Republic have the ability to establish different rules regarding stakebuild - ing thresholds or other related aspects through their articles of incorporation or by-laws (such as notifica - tion to the supervisory board). Hurdles to stakebuilding generally include: • necessary approvals from authorities (including a merger control authority) in connection with stake - building; • voting limitations concerning different share classes available to the bidder; • the mandatory offer threshold; and • reporting obligations in the mandatory offer about the acquisition of shares (including the share price) in the target company during the 12 months pre - ceding the bid.
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