AUSTRIA Law and Practice Contributed by: Clemens Hasenauer and Albert Birkner, CERHA HEMPEL
4. Stakebuilding 4.1 Principal Stakebuilding Strategies A bidder can acquire an initial stake in the target com - pany prior to launching an offer. Although pre-launch stakebuilding is generally permitted under Austrian takeover law, a shareholder must fulfil certain notifi - cation requirements if the thresholds described below are met or exceeded. As a consequence, stakebuild - ing involves the risk of generating publicity. The Transparency Directive Amending Directive (2013/50/EU) introduced stricter disclosure require - ments, including a reporting obligation regarding cash-settled equity swaps. This makes it harder to implement a creeping increase in control. 4.2 Material Shareholding Disclosure Threshold Under the Austrian Stock Exchange Act 2018, Sec - tion 130, any person directly or indirectly acquiring or selling shares in a company listed on a regulated mar - ket is required to inform the Austrian Financial Mar - ket Authority and the exchange operating company if their shares carrying voting rights reach, exceed or fall below the thresholds of 4%, 5%, 10%, 15%, 20%, 25%, 30%, 35%, 40%, 45%, 50%, 75% and 90%. These material shareholding disclosure thresholds apply only to shareholders who are interested in a company with a registered office in Austria. The per - sonal scope of the application includes individuals, legal entities, registered partnerships without legal personality and investment funds. The provision aims to ensure the functioning of the capital market and to provide a reliable basis for shareholders’ decisions about the acquisition and sale of shares. 4.3 Hurdles to Stakebuilding The material shareholding disclosure thresholds mentioned in 4.2 Material Shareholding Disclosure Threshold are compulsory. However, the Austrian Stock Exchange Act 2018, Section 130, paragraph 1, makes it possible to include a threshold of 3% in a company’s articles of incorporation (in addition to the other thresholds in Section 130, paragraph 1).
As has already been demonstrated, the principle of equal treatment constitutes one of the Takeover Act’s central concerns. Financial matters to which the principle of equal treatment relates are regulated (in particular) by those provisions governing transac - tions in the target company’s equities, in addition to the relevant provisions governing mandatory offers. Consequently, equal financial treatment should be guaranteed, meaning that the Takeover Act prohibits transactions in equities at more favourable terms: • during the offer phase (parallel transactions); and • after the offer has ended. However, these bans will not apply to credit institu - tions if certain conditions are met. From the moment the offer is announced, from the moment the offer would have had to have been announced or from the moment the offer is filed with the Takeover Commission, the bidder and those par - ties acting in concert with the bidder must not issue any legally binding declarations aimed at the acquisi - tion of equities in the target company at terms more favourable than those specified in the offer. Bidders will not violate this rule if they enhance the offer while conducting parallel transactions. This also applies to the acquisition of shares at terms no better than those set out in the offer. The Takeover Commission may also grant an exemption from the ban on parallel transactions if there is a good reason for doing so. 4.4 Dealings in Derivatives Dealings in derivatives are permitted in Austria. 4.5 Filing/Reporting Obligations Any financial instrument is subject to disclosure and/ or filing and reporting obligations as specified (see 4.2 Material Shareholding Disclosure Threshold ). There are no specific statutory competition rules covering derivatives, nor are there any for other financial instru - ments. National merger control will, in principle, only be trig - gered if an option right is exercised to acquire shares – unless the option right itself has considerable and material influence over the target entity and its man - agement.
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