GERMANY Law and Practice Contributed by: Marc Löbbe, Michaela Balke, Oliver Schröder and Martin Kolbinger, SZA Schilling, Zutt & Anschütz
6.11 Irrevocable Commitments It is possible under German law to obtain commitments to tender by principal shareholders or to conclude tender agreements. However, tender agreements and irrevocable commitments qualify as financial instru - ments and thus trigger disclosure obligations to the target company and the supervisory authority (see 4.2 Material Shareholding Disclosure Threshold ), so are usually only concluded immediately prior to or in con - junction with a public offer. In accordance with the German Securities Acquisi - tion and Takeover Act, the bidder has to publish its intention to submit an offer immediately following the respective decision, having communicated it to the stock exchanges’ management and BaFin. The announcement needs to contain information on the parties involved in the transaction, the offer’s nature and the offer price. It shall be disclosed in German by publication on the internet and via an electronic information distribution system. 7. Disclosure 7.1 Making a Bid Public Subsequently, the publication has to be sent to the management of the stock exchange and BaFin, and to the target company’s management board. Within four weeks of publication of the intention to submit an offer, the bidder has to submit the binding offer document to BaFin. As soon as BaFin permits the publication of the offer or if it does not prohibit it within ten days, the offer document needs to be published immediately online and in the German Fed - eral Gazette, or made available for public distribution Anyone who directly or indirectly acquires control of a target company – other than as a result of a takeover bid – has to publish this immediately, within seven days at the latest, stating the amount of their share in the voting rights. The publication must be made on the internet and via an electronic information distribu - tion system. without charge. Mandatory Bids
Within four weeks of the publication of the acquisition of control, the bidder has to submit an offer to BaFin and publish it immediately online and in the German Federal Gazette, or make it available for public distri - bution without charge. Under the German Securities Acquisition and Takeover Act, acquiring control means holding at least 30% of the voting rights in the target company. 7.2 Type of Disclosure Required See 7.1 Making a Bid Public and 6.3 Consideration in connection with public offers. Outside of public bids, any public issuance of shares in a business combi - nation has to be based on a prospectus available in printed form for distribution to the public or on the issuer’s website without charge. Under the German Securities Prospectus Act, the prospectus has to con - tain, inter alia, various pieces of information about the issuer and the shares to be issued. 7.3 Producing Financial Statements The offer document of a public offer has to contain a thorough analysis of the effects of the transaction on the asset, financial and earnings position of the tar - get, and thus will need to contain pro-forma combined financial statements as part of such analysis. If shares are issued in connection with a business combination, under EU Regulation No 2019/980 a prospectus has to precede a share issue, which must also include pro-forma financial statements about the companies involved in the transaction and, therefore, also about the bidder. These pro-forma financial state - ments need to be prepared in a manner consistent with the accounting policies applied by the issuer in Transaction documents in private transactions are generally non-public and subject to the agreed confi - dentiality restrictions. In public transactions, the offer document itself and the target’s reasoned statement are published (see 7.1 Making a Bid Public ), but ancillary agreements (such as business combination agreements or irrevocable undertakings) are generally not publicly available. recent annual financial statements. 7.4 Transaction Documents
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