GERMANY Law and Practice Contributed by: Marc Löbbe, Michaela Balke, Oliver Schröder and Martin Kolbinger, SZA Schilling, Zutt & Anschütz
4. Stakebuilding 4.1 Principal Stakebuilding Strategies Stakebuilding in listed companies below the man - datory offer threshold is subject to strict notification requirements (see 4.2 Material Shareholding Disclo- sure Threshold ), so that it is in practice limited to a level of shareholding/instruments below the notifica - tion threshold (2.99% physical plus max 2% financial instruments). However, open stakebuilding above these levels is permissible, and agreements to tender or irrevocable commitments are possible (subject to their being disclosed as financial instruments at the time of conclusion). Reaching 30% of (directly held or attributed) voting rights triggers a mandatory takeover offer. If the 30% threshold is crossed as the result of the settlement of a voluntary takeover offer, the bidder is subsequently free to acquire additional shares without being required to issue another (mandatory) takeover offer. This allows the combination of package deals with a (voluntary) public offer. However, minimum pric - ing rules and post-offer most favoured treatment rules apply with respect to the initial (voluntary) offer. 4.2 Material Shareholding Disclosure Threshold Disclosure thresholds and filing obligations mainly concern companies listed on organised markets. Investors that build stakes (in shares or financial instruments such as derivatives, directly or through attribution) in companies listed on an organised mar - ket are required to notify the company and BaFin if their voting rights exceed or fall below 3%, 5%, 10%, 15%, 20%, 25%, 30%, 50% or 75% (with the 3% threshold not applying to financial instruments). The company is obliged to publish any notifications of its shareholders. In particular, voting rights held by subsidiaries and by different investors who co-ordinate their actions with respect to the company (“acting in concert”) are to be attributed. These rules can lead to unintentional violations in complex legal situations. It is advisable to examine these attribution rules thoroughly, since violations can lead not only to serious fines but also to
According to the German Co-Determination Act ( Mitbestimmungsgesetz ), certain companies (stock corporations, partnerships limited by shares, lim - ited liability companies and co-operatives) with more than 2,000 employees have to establish a supervisory board, in which half the members must be employee representatives. The same applies to companies with more than 500 employees, pursuant to the German One Third Participation Act ( Drittelbeteiligungsgesetz ), but only one third of the members are required to be employee representatives. 2.6 National Security Review See 2.3 Restrictions on Foreign Investments . 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments As noted in 2.3 Restrictions on Foreign Investments , German FDI rules have been significantly tightened, and the Foreign Subsidy Regulation has been intro - duced on an EU level (see 2.2 Primary Regulators ). 3.2 Significant Changes to Takeover Law In September 2018, the German Federal Supreme Court ( Bundesgerichtshof , or BGH) took a landmark decision on the definition of “acting in concert” under the German Securities Trading Act. The legal instru - ment of acting in concert has various impacts on the scope of co-operation between two or more share - holders of a public listed company. The BGH ruled that a one-time agreement between two shareholders regarding the exchange of the mem - bers of the supervisory board in order to achieve busi - ness realignment does not constitute acting in con - cert. Therefore, a co-operation does not lead to a mutual allocation of voting rights under the German Securities Trading Act. While the decision was issued in the context of voting rights notifications, the analy - sis applies to acting in concert potentially triggering a mandatory takeover offer as well.
494 CHAMBERS.COM
Powered by FlippingBook