SLOVAKIA Law and Practice Contributed by: Lukáš Michálik, Peter Makýš and Šimon Hora, Ments s.r.o.
6.2 Mandatory Offer Under Slovak legislation, a person who, alone or together with persons acting in concert with them, reaches or exceeds the threshold share- holding of 33% in a publicly traded target com- pany, is obliged to make a takeover bid for all the shares of that company. Threshold shareholding means a holding of at least 33% of the voting Despite the low volume of shares traded on the Slovak stock exchange and also the small number of titles traded, the typical transaction structure for the acquisition of a public company in Slovakia would look something like the fol- lowing. rights attached to the shares. 6.3 Transaction Structures • Initially, the acquirer would aim to secure a sufficiently large position in the target com- pany in order to be able to place its nominees in the company’s bodies. • The acquirer (either alone or together with other shareholders) would make an offer to take over the shares of the company. • If the acquirer (or persons acting in concert with it) had a stake of at least 33%, it would have to make a mandatory takeover bid. • Subsequently, if the acquirer succeeded in acquiring at least 95% of the target com- pany, the whole takeover process could be concluded by a squeeze-out in order to take control of the entire company. 6.4 Consideration and Minimum Price In the Slovak jurisdiction, the acquisition of a company (or part of it) in the technology indus- try for a consideration in the form of cash is still common. Sales of companies with stock-for- stock consideration are not common in Slovakia, although their popularity among entrepreneurs is gradually growing.
On the other hand, in the case of a business combination, the situation is reversed. Gener- ally, in business combinations (eg, in the form of a merger) it is assumed that all shareholders of the ceasing company become shareholders of the remaining company – carrying out a stock- for-stock deal. However, Slovak law allows either the sharehold- ers of the closing company or the shareholders of the enduring company to decide that they are not interested in remaining shareholders of the company remaining after the merger has been carried out. In this case, the law provides for specific procedures which determine the value of consideration to be paid to shareholders who opt out. Under the procedure, firstly, shareholders who do not agree to the business combination and who are interested in a cash payment of their shareholding must make clear their intention not to remain in the surviving company. Such share- holders then have the right to require the surviv- ing company purchase their shares from them for an appropriate cash consideration. The value of the appropriate cash consideration must not be less than: • the highest consideration given to individual eligible shareholders for the same share; • the value of the net assets per share deter- mined according to the last annual accounts before the preparation of the business com- bination agreement, increased by the value of the intangible assets not shown in the balance sheet as valued by an independent expert; and • the average share price of the companies involved in the merger, whose shares are traded on a stock exchange during the 12
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