AUSTRIA Law and Practice Contributed by: Clemens Hasenauer and Albert Birkner, CERHA HEMPEL
Standstills provide an incentive to successfully con - clude the envisaged transaction on the first attempt. Therefore, standstills prohibiting interested parties from acquiring or selling securities in the target com - pany or the bidder from making another offer for a certain period, even after a takeover has failed, are regularly requested and, in most cases, constitute a legal consequence of the prohibition of insider deal - ing. Exclusivity arrangements vary depending on the takeover structure and the underlying transaction. In general, exclusivity arrangements tend to be made in connection with negotiated deals rather than auction sales. Exclusivity arrangements restricting the future scope of management discretion are not generally allowed. 5.5 Definitive Agreements The bidder can unilaterally specify the terms and con - ditions of the agreement in its offer document. Individ - ual recipients of the offer cannot negotiate or change the terms and conditions. The bidder makes a tender offer to all shareholders to conclude an agreement regarding the target company. The Austrian Takeover Act assumes that a contract will only be concluded with respect to the offer aimed at the target company’s shareholders by means of the publication of the offer document if a declaration of acceptance is received. Essentially, a takeover offer fulfils the key requirements of a contract offer if its terms are adequately defined and it expresses the applicant’s willingness to enter into an agreement. Therefore, the terms and conditions of the tender offer are documented according to the described proce - dure. 6. Structuring 6.1 Length of Process for Acquisition/Sale In general, the timetable for M&A transactions may be subject to various drivers. The duration primarily depends on, inter alia: • the target’s size; • complexity of the transaction structure;
• organisation and co-operativeness of the parties; • the industry the target company operates in; and • regulatory aspects. Public takeovers, which are governed by a strict regu - latory framework including prescribed steps within a prescribed timeframe, usually take a minimum of three months and up to six months from the announcement of the offer to closing (excluding any time require - ments for preparatory work). Private small- to medi - um-sized transactions structured as share or asset deals may typically be manageable from a minimum of three months to six months onwards. Particularly in the area of distressed M&A and small, simple trans - action structures where no material due diligence of the target is performed, quite swift transactions (even below three months) are common. The foregoing assumes no need for merger control clearance or other regulatory approval issues. For larger international M&A transactions, time periods may extend up to approximately 12 months or even 18 months from the first preparatory steps through to closing. 6.2 Mandatory Offer Threshold Essentially, the Takeover Act regulates public offers aimed at gaining or expanding control by acquiring shares issued by a stock corporation with its corpo - rate seat in Austria and listed on a regulated mar - ket on the Vienna Stock Exchange. Furthermore, the Takeover Act also applies (partially) where only the requirement of a corporate seat or listing is fulfilled in Austria and the other requirement is fulfilled in another jurisdiction. The Takeover Act distinguishes between three types of offers: • mandatory offers; • voluntary offers; and • voluntary offers aimed at obtaining control. Furthermore, the Takeover Act also foresees an offer to delist securities from the Official Market of the Vienna Stock Exchange. Such an offer is subject to the provisions governing mandatory offers, whereby certain modifications apply.
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