BULGARIA Law and Practice Contributed by: Nikolay Zisov, Svetlina Kortenska, Deyan Terziev and Teodora Peycheva, BOYANOV & Co.
capital of the target, it is entitled within the three- month period after the tender offer completion to acquire the remaining shares for fair consideration under a forced (squeeze-out) sale procedure – please refer to 6.8 Squeeze-Out Mechanisms . Where a bidder fails to acquire the necessary share- holding for a squeeze-out, contractual arrangements can be employed to enhance governance rights. These may involve entering into specific agreements with other shareholders which may secure specific governance privileges. However, given the strictly regulated nature of listed companies, contractual instruments may not always be possible to secure governance rights. 6.12 Irrevocable Commitments The offeror is not explicitly restricted under law from entering into deals with minority shareholders to pur- chase their shares or secure commitments for tender offer acceptance or voting. Therefore, agreements with shareholders in the target company that provide for irrevocable commitment of shareholders to tender their shares, subject to the fulfilment of specific condi- tions (particularly regarding the offered compensation amount), are not uncommon. However, such deals must comply with the tender offer regulations, mar- ket abuse rules and general legal principles, ensuring equal treatment of all shareholders in similar positions. 6.13 Securities Regulator’s or Stock Exchange Process The tender offer process involves registration with the FSC, including the submission of a disclosure docu- ment containing key information about the offer. The FSC may impose temporary or final prohibitions on the tender offer if the documentation is insufficient or if investor interests are at risk. Once approved, the tender offer is announced publicly, and the target company’s management body is required to provide a reasoned opinion on the offer. The timelines are dis- cussed in more detail in 6.14 Timing of the Takeover Offer . During the tender offer period, a shareholder holding at least 5% of the target company’s shares may make a counterbid to acquire more than one third of the issued share capital, provided the offer price exceeds
the original tender offer price and is approved by the FSC. A counterbid triggers an extension of the offer period and allows the original offeror to improve its offer. While counterbids are legally permissible, they are rare in Bulgaria and specific regulations governing them are limited. 6.14 Timing of the Takeover Offer Acquiring more than one third, 50% or two thirds of the total number of votes in a public company will typi- cally trigger an obligation of the acquiring shareholder to register with FSC a tender offer for the purchase or exchange of all the remaining shares, within 14 days after the date of exceeding the threshold. The review of the mandatory tender offer documenta- tion usually takes around 80 days for the FSC to com- plete, but in practice the approval procedure may last longer. After the approval of the tender offer the spe- cific offer period starts to run. It cannot be shorter than 28 days nor longer than 70 days. The exact length of the offer period is specified in the MTO disclosure document. The payment and delivery of shares is usually com- pleted within one week after the publication of the final results of the tender offer. 7. Overview of Regulatory Requirements 7.1 Regulations Applicable to a Technology Company Start-ups in Bulgaria are set up by registration in the Commercial Register and Register of Non-Profit Legal Entities. The incorporation process typically includes: • preparing the documents (resolutions, articles of association, declarations, etc); • opening a bank account in Bulgaria and transfer- ring the share capital to it; • registering the new company in the Commercial Register; and • registering the ultimate beneficial owner in the Commercial Register within seven days (where relevant).
63 CHAMBERS.COM
Powered by FlippingBook