GREECE Law and Practice Contributed by: Stefanos Charaktiniotis, Danai Falconaki, Stathis Orfanoudakis and Nadia Axioti, Zepos & Yannopoulos
der offer. The Greek legislature has implemented the board neutrality rule providing that, as of notification by the offeror of its intention to proceed with a tender offer and up to the publication of the tender offer’s result (or its revocation), the board of directors of the offeree company must obtain prior authorisation from the general meeting of shareholders before taking any action that might result in the frustration of the ten - der offer. Also, any decisions of the board of directors prior to such period that have not been put in place in whole or in part, require the consent or confirmation of the general meeting. The only exception directly applicable to the board of directors’ powers is its right to search for alternative offers. In light of this, decisions made by the board of direc - tors but previously specifically authorised by the gen - eral meeting of shareholders, resolving on defensive measures against the tender offer, could be appli - cable during a tender offer process. However, given the structure of the M&A market and subject to the applicable market abuse regulations, it seems highly unlikely that the existing shareholders will not be act - ing under an arrangement with the offeror for it to acquire the required shareholdings which will trigger a mandatory offer. 9.3 Common Defensive Measures As mentioned in 9.2 Directors’ Use of Defensive Measures , the applicable legislation does not allow directors to use defensive measures within a manda - tory or voluntary tender offer unless upon the prior authorisation or approval of the general meeting of shareholders of the target company. In practice, the main measure that may be used by the board of direc - tors of the target company as a defence is actively searching for alternative tender offers competitive to the one that has already been launched. However, in order for the recipients to be able to recall their acceptance declarations regarding the initial tender offer, a relevant right should have been provided for in the tender offer prospectus. The co-operation and arrangements between the board and the offerors are disclosed in the board’s justified opinion on the tender offer published with the HCMC. On the other hand, aside from the board of direc - tors’ use of defensive measures, Law 3461/2006 has
introduced provisions for the neutralisation of any pre-existing statutory defensive measures which had been included preventively in the target’s articles of association in order to secure the company from any future actions that could lead to its acquisition. The beneficiaries of any such neutralised statutory defen - sive measures are entitled to receive compensation for any damage they suffered due to such process. It should be noted, though, that it is highly unlikely for Greek listed companies to have included such statu - tory defensive measures in their articles of associa - tion. 9.4 Directors’ Duties See 9.2 Directors’ Use of Defensive Measures . Directors’ duties within a tender offer process are gen - erally the same as in 8.1 Principal Directors’ Duties and mainly consist of a duty of loyalty – including a duty of non-competition – which requires the directors to promote the company’s best interests, accomplish the company’s objectives and omit actions that could be harmful to the company’s interests, as well as a duty of secrecy safeguarding any information relating to the company’s operations and any tender offer- specific information which may not be disclosed until the official launch of the tender offer. 9.5 Directors’ Ability to “Just Say No” Under the applicable framework, the board of direc - tors of a Greek entity is not entitled to “just say no” to a business combination. The board of directors is only entitled to resolve on day-to-day issues which concern the operation of the company and seek alter - native offers while they may make only the decisions they have been specifically authorised to make by the general meeting.
10. Litigation 10.1 Frequency of Litigation
In general, litigation is not very common in Greek M&A transactions. In practice, duration of proceed - ings, bureaucracy and costs are the main deciding factors that influence parties’ decision to opt for or initiate litigation proceedings in Greece or seek other
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