ROMANIA Law and Practice Contributed by: Ileana Glodeanu, Andreea Cărare, George Ghitu and Delia Dumitrescu, Wolf Theiss
The mandatory takeover is not required for exempted transactions, such as the following acquisitions: • carried out as part of a privatisation process; • from the Ministry of Public Finance or any other authorised entities within the foreclosure of budg - etary receivables; • between the parent company and its subsidiaries, or between subsidiaries of the same parent com - pany; or • under a voluntary takeover offer addressed to all shareholders for all their shareholdings. Moreover, an additional rule applies if the 33% thresh - old is exceeded by “unintentional operations” that result from: • a share capital reduction through the buy-back by the company of its own shares, followed by their cancellation; • exercising a preference right, subscription or conversion of rights originally granted, as well as the conversion of preference shares into ordinary shares; or • a merger/spin-off or inheritance. In the case of such unintentional transactions, share - holders may choose between conducting a manda - tory takeover and selling the shares in excess of the 33% threshold. Romanian takeover regulations set forth that a bid - der’s holdings must be aggregated with those of any persons “acting in concert”, significantly affecting pri - vate equity-backed bidders. The law defines persons acting in concert as those who co-operate – through express or silent agreement – in order to adopt a com - mon policy regarding an issuer. This includes funds or entities under the same control, such as affiliated/ co-investment vehicles, subsidiaries or portfolio com - panies, whose holdings may be attributed to the lead bidder. This broad concept of concerted action means that even where individual acquisitions are made by sepa - rate legal entities, they may be treated as a single acquiring person for the purpose of calculating wheth - er the 33% threshold has been crossed. As a result,
private equity bidders must carry out careful mapping of direct and indirect exposure, at the fund level and across any co-investment platforms or SPVs used in the acquisition structure. Furthermore, private equity funds must also take into account any synthetic or derivative instruments held by affiliated vehicles that could be deemed equivalent to voting rights, and may thus trigger attribution or aggregation under takeover rules. Failure to properly identify consolidated holdings could result in inadvert - ent triggering of the mandatory offer obligation and the suspension of voting rights, with potential regula - tory and transactional consequences. 7.4 Consideration By far the most common consideration for takeovers is cash, even though Romanian law allows the bidder to establish the price in cash or securities, or a com - bination of the two. Generally, no minimum pricing regulations or cash requirements are to be observed; however, certain specific pricing rules are applicable to mandatory and voluntary takeover offers. 7.5 Conditions in Takeovers Romanian law does not explicitly prohibit the use of conditions in a voluntary takeover offer, nor does it provide a closed list of permitted conditions. While the law is silent on conditionality in express terms, market practice suggests that conditions such as regulatory clearances or minimum acceptance thresholds may be accepted, provided they do not breach the princi - ple of equal treatment of shareholders. However, there is no express legal framework or published FSA policy that formally regulates or endorses the inclusion of offer conditions. A bidder may choose to amend the initial offer terms (price, closing date, etc) provided that the FSA approves such amendment, the amendment would not entail less advantageous terms than the initial ones and the amendment is publicly announced, simi - larly to the initial offer. In the context of Romanian public takeovers, offer financing must be fully committed and unconditional at the time the bid is launched. While the law does not expressly prohibit conditions related to financ -
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