CZECH REPUBLIC Law and Practice Contributed by: Petr Janů, Vladislav Klimeš and Leoš Vavřík, BADOKH
• details of the supervisory authority that is compe - tent to oversee the takeover bid, including details of the approval of publication of the takeover bid. In the case of a mandatory takeover bid, the offer document shall also contain the reasons for which it is being made and a description of the methods used to determine the form and amount of the considera - tion, details of the type and amount of consideration given or agreed for each acquisition of shares of the target company by the offeror or a person co-oper - ating with it, and the number of shares acquired in each transaction if such transaction was negotiated in the last 12 months prior to the commencement of the offer (or else a statement that no such transaction was negotiated). 7.3 Producing Financial Statements Although financial statements are not expressly required to be disclosed along with the offer docu - ment, it is recommended that financial statements prepared in accordance with the Czech accounting principles, in particular an annual report with finan - cial statements, be disclosed in order to comply with the obligation to disclose the source and method of financing or other security (see below). The offer document shall contain, as a minimum, infor - mation on the sources and method of financing or other security for the consideration. In particular, the bidder shall indicate in the offer document whether it intends to finance the takeover exclusively from its own resources or from intra-group resources or whether it intends to finance the takeover entirely/partially from external resources. Furthermore, the Czech National Bank may require the bidder to demonstrate that it has sufficient resources to finance the takeover bid and to document the origin of these resources. 7.4 Transaction Documents The offer document shall be disclosed in full (see 7.1 Making a Bid Public and 7.2 Type of Disclosure Required ).
In the context of private M&A deals, no public disclo - sure of transaction documents is required.
8. Duties of Directors 8.1 Principal Directors’ Duties
Company directors (including members of a supervi - sory body) have to follow general fiduciary duties such as due care and loyalty. These general fiduciary duties prioritise the interests of the company over the inter - ests of the directors, shareholders or stakeholders. In other words, the directors shall act in the best inter - ests of the company as a whole, taking into account the long-term interests of the company, its sharehold - ers and other stakeholders. If a breach of directors’ duties has been committed, the court may rule that the directors must provide compensation for the loss of the company, and in some instances the directors may be personally liable toward the creditors. General fiduciary duties remain unaffected in private deals. In the process of a business combination of a public company, however, Czech law provides for certain additional duties. In the process of a business combination of a public company, the directors have to follow the same gen - eral fiduciary duties and prioritise the interest of the company as a whole. However, there is one notable modification to this rule. Czech law states that the directors may not frustrate the shareholders’ oppor - tunity to freely decide whether to accept or refuse the takeover bid – such an obligation being considered a duty of neutrality. In practice, the duty of neutrality means that once the directors become aware of the likelihood of receiving a takeover bid, the directors’ general fiduciary duties are modified to the extent that the directors may not (i) adopt measures that would adversely influence the shareholders’ opportunity to freely decide whether to accept or refuse the takeover bid (such as withhold - ing information from the shareholders) or (ii) under - take any actions that could stave off the takeover bid unless the company’s general meeting has sanctioned such actions, or the law requires such actions, or such
405 CHAMBERS.COM
Powered by FlippingBook