ROMANIA Law and Practice Contributed by: Ileana Glodeanu, Andreea Cărare, George Ghitu and Delia Dumitrescu, Wolf Theiss
ing, the structure of the regulatory regime – including the requirements for offer documentation and mar - ket conduct – effectively means that bidders must demonstrate funding certainty upfront. The bidder is expected to disclose the source, amount and terms of the funds used, along with the settlement mechan - ics proposed for the acquisition. As a result, public offers in Romania cannot be made subject to financ - ing or the later satisfaction of drawdown conditions. This framework ensures transactional transparency and reinforces the principle that public sharehold - ers should not bear the execution risk of the bidder’s financing arrangements. For private equity-backed bidders, this translates into a need for firm equity commitments and executed financing packages at the time the offer is cleared for launch. Under Romanian law, deal protection measures such as break fees, match rights, exclusivity clauses and force-the-vote provisions are not expressly prohibit - ed, but they are generally incompatible with standard public takeover bids addressed to a dispersed share - holder base. However, in privately negotiated scenarios involving anchor shareholders or block trades – sometimes referred to as “deal-based offers” or private market transactions – certain limited protections may be agreed between the bidder and a selling sharehold - er. For example, cost reimbursement or exclusivity arrangements may be included as part of a bilateral commitment. These are essentially workable only in tailored one-to-one contexts, and do not translate to widely held targets or standard tender offers. Romanian takeover law does not recognise force-the- vote provisions, as the target board has no power to approve or reject the offer. Likewise, support commit - ments cannot be made by the board on behalf of the company or its shareholders, although shareholders themselves may enter into pre-offer arrangements (eg, undertakings to tender or sell), particularly in negoti - ated transactions or block trades. 7.6 Acquiring Less Than 100% Governance Rights Below 100% Ownership If a private equity bidder does not seek or obtain 100% ownership of a target, the governance rights with
respect to the target outside of the bidder’s sharehold - ings very much depend on the rights granted to such bidder by law and under the target’s existing articles of association. The shareholder should carefully review the articles of association of the company, as special corporate governance rules may be in place. If that is not the case, the law will apply – particularly regarding basic minority shareholders’ rights such as information rights, the right to call a shareholders’ meeting, voting requirements in connection with corporate and capital restructurings, and the entitlement to dividends. Debt Push-Down Considerations Romanian law does not offer a statutory mechanism for a debt push-down following a successful acquisi - tion. However, a debt push-down may be achieved through post-acquisition restructurings, typically involving: • a merger between the acquisition vehicle and the target; or • intra-group financing. Such post-acquisition measures generally require corporate approvals at the target level. In this case, minority protections under Romanian company law remain relevant, especially for significant structural actions (eg, mergers, asset transfers), and may con - strain execution or increase litigation exposure. An important legal constraint relates to financial assis - tance rules. Romanian law prohibits a company from granting loans, guarantees, advances or security to facilitate the acquisition of its own shares. These restrictions apply regardless of the bidder’s level of control and cover both direct and indirect forms of assistance, such as upstream loans or intra-group guarantees used to refinance acquisition debt. If the target remains listed following the takeover, additional regulatory considerations arise. Any mate - rial post-acquisition transaction may trigger: • disclosure obligations under capital markets rules;
542 CHAMBERS.COM
Powered by FlippingBook