AUSTRIA Law and Practice Contributed by: Horst Ebhardt, Philipp Kapl, Hartwig Kienast and Matija Bernat, Kinstellar
7.6 Acquiring Less Than 100% Post-Offer Governance, Debt Push-Down and Squeeze-Out in Austria If a PE bidder does not obtain 100% ownership, additional governance rights (eg, board representa - tion, veto rights) require shareholder agreements or amendments to the articles of association, subject to Austrian corporate and capital markets laws. A debt push-down is subject to certain restrictions and typi - cally requires the bidder to obtain at least 75% of the voting rights to implement key structural measures such as mergers or upstream loans. The possibility to perform a squeeze-out is set forth in the Austrian Squeeze-Out Act (GesAusG). A squeeze- out is generally possible if a shareholder (together with affiliated companies, if any) holds at least 90% of a company’s share capital. The articles of a company may prohibit a squeeze-out in its entirety or set an even higher threshold. Such squeeze-out requires shareholder resolutions and provides for severe minority shareholder protections such as the possi - bility of minority shareholders to let a court examine the appropriateness of the cash compensation paid to them. 7.7 Irrevocable Commitments Irrevocable tender or voting commitments by princi - pal shareholders are not uncommon in Austrian pub - lic M&A transactions, including PE-backed takeovers. Negotiations typically take place before the public announcement of the offer and may form part of pre- launch structuring. Such undertakings are generally structured as hard irrevocables, meaning the shareholder commits to tender or vote in favour of the offer regardless of com - peting bids. However, in practice, it is not unusual to include fiduciary outs, particularly for institutional investors, allowing withdrawal if a clearly superior competing offer is made. These undertakings are subject to disclosure require - ments under the ATA and must not conflict with the principles of equal treatment and transparency includ - ed in the ATA.
common control, portfolio companies or parties act - ing in concert – may be attributed to the bidder. This can trigger a mandatory offer obligation even where no single entity formally exceeds the 30% threshold. Bidders may apply for an exemption in limited cases (eg, inadvertent control due to restructuring). 7.4 Consideration In Austria, cash is the predominant form of considera - tion in public tender offers. While share consideration is legally permitted, it is rarely used in practice due to valuation complexities. Minimum price rules under the ATA require the offer price to be at least equal to the higher of: • the highest consideration paid by the bidder (or parties acting in concert) for target shares within the 12 months prior to the filing with the Austrian Takeover Commission ( Übernahmekommission ); or • the average stock exchange price over the six months preceding the day the bidder announced its intention of a takeover offer. These rules ensure equal treatment and protect minor - ity shareholders. 7.5 Conditions in Takeovers Offer Conditions and Transaction Security Measures in Austria Takeover offers may include conditions, but these are strictly limited under the ATA. Conditions must be objective, clearly defined and not dependent solely on the bidder’s discretion. As a result, conditions relating to financing, due diligence or internal approvals are not permitted. The bidder must have secured financ - ing before launching the takeover offer. Common permissible conditions include minimum acceptance thresholds (for voluntary takeover bids) and regulatory approvals. Transaction protection measures such as non-solici - tation clauses, matching rights and break fees are not prohibited but must comply with Austrian corporate law (corporate benefit rules) and must not frustrate competing offers.
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