AUSTRIA Law and Practice Contributed by: Clemens Hasenauer and Albert Birkner, CERHA HEMPEL
Mandatory Offers Generally, the obligation to launch a mandatory offer is triggered if a bidder (be it an individual or parties acting in concert) seeks to acquire a controlling share - holding, which is defined by statute as a direct or indi - rect controlling interest of more than 30% of the voting stock. A shareholding that gives the holder between 26% and 30% of the voting rights must, however, be notified to the Takeover Commission. An exception to this rule applies in certain cases where an obligation to launch an offer would exist in principle due to the acquisition of a controlling interest. In the following cases, the Takeover Commission only needs to be notified: • for a passive acquisition of a controlling interest (ie, where a controlling interest is obtained without any action having been taken by the acquirer, pro - vided that the acquirer could not reasonably have expected to obtain control at the time at which ownership of the respective shares was acquired); • for an acquisition of a controlling interest which does not enable the acquiring party to exert a deci - sive influence over the target; or • in other defined exceptional situations (such as certain “creeping in” situations). “Creeping-In” The Takeover Act also addresses the issue of “creep - ing-in” acquisitions by shareholders. If a shareholder who holds a controlling interest – though not nec - essarily a majority of the voting rights – acquires at least an additional 3% of the voting rights (on a netted basis) within a single calendar year, such shareholder must notify the Takeover Commission. In such cases, a mandatory offer must be made, although in certain defined situations, simply notifying the Takeover Com - Based on experience, cash is the most common form of consideration, whereas offering shares is rather rare, as are combinations of the two. However, sell - ers occasionally explore alternative ways, such as the assumption of debt by a buyer, sometimes in com - bination with a cash payment. In deal environments or industries with high valuation uncertainty, closing mission may suffice. 6.3 Consideration
accounts are commonly used and earn-out models are frequently discussed to bridge value gaps. Regarding takeover transactions, mandatory offers always require cash consideration but may have a paper alternative in addition. The same applies to voluntary takeover offers aimed at obtaining control. Only purely voluntary offers (not aimed at obtaining control) may be in cash or securities. 6.4 Common Conditions for a Takeover Offer In general, mandatory offers may not be conditional on acceptance or any internal approvals by the bidder. They may solely be subject to obtaining regulatory clearance (eg, merger control). With regard to purely voluntary offers (ie, not aimed at obtaining control) and voluntary takeover offers aimed at obtaining control, the completion may be subject to objectively justified conditions, including: • minimum or maximum acceptance thresholds; • clearance by merger control and other regulatory authorities; or • the absence of a material adverse change. However, the fulfilment of a condition or a right to withdraw may not depend on the buyer’s discretion. The Takeover Commission may declare an offer unlawful if conditions are unjustified, discretionary or not objectively determinable. As a result, the lat - ter may prohibit its launch. Therefore, it is advisable to consult the competent authority prior to submit - ting an offer that includes conditions that are unusual, not precise enough or where their justification is not clearly evident. 6.5 Minimum Acceptance Conditions Again, a distinction must be drawn between manda - tory offers, voluntary offers aimed at obtaining control and purely voluntary offers. • Mandatory offers may not be conditional on acceptance or any internal approvals by the bidder. They may be subject solely to obtaining regulatory clearance (eg, merger control).
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