UKRAINE Law and Practice Contributed by: Illya Tkachuk, Igor Krasovskiy and Inna Kostrytska, INTEGRITES
tions and warranties thereunder. Normally, this is done by the selling party. 6.7 Minimum Acceptance Conditions Ukrainian law does not establish minimum acceptance conditions for tender offers. 6.8 Squeeze-Out Mechanisms The acquisition of a dominant controlling stake (more than 95%) of shares in a joint stock com- pany entitles the acquirer – or group of acquir- ers acting jointly – to request minority sharehold- ers to sell their shares at a fair price. Subject to certain exceptions, launching the squeeze-out procedure is only allowed once the mandatory offer procedure has been exercised or has not been applicable. The squeeze-out mechanism entails the follow- ing main steps: • the acquirer must notify the company and the regulator (National Securities and Stock Market Commission) about the acquisition of the dominant controlling stake of shares; • the company must disclose the notice on its website and in the database of a certified disclosing agency; • the company must evaluate and approve the market value of the shares, and notify the acquirer accordingly; • the acquirer must determine the purchase price; • the acquirer must file the public irrevocable demand to the company; • the regulator and shareholders must be noti- fied of this by the company; • minority shareholders are given 20 business days to file a competing demand if they want; • funds in consideration for minority shares must be transferred by the shareholder(s)
whose demand was the last one to the escrow account opened by the acquirer; and • the National Depositary of Ukraine must transfer the shares to the securities account of the acquirer. An instrument of a competing demand is a nov- elty introduced by the new Law “On Joint Stock Companies”, which entered into force on 1 Jan- uary 2023. The purchase price offered in a com- peting demand must be at least 5% higher than the price of the initial public irrevocable demand. The competing demands may be submitted by shareholders under the same procedure until there are no counter offers anymore. The minority shareholders are given five years to receive money from the escrow account. 6.9 Requirement to Have Certain Funds/ Financing to Launch a Takeover Offer It is not necessary to prove the availability of certain funds or financing to launch a takeover offer. Usually, the buyer makes the offer even if the transaction is financed by a bank or another financial institution. At the same time, proof that financing is avail- able might be requested by the terms and condi- tions of the auction. 6.10 Types of Deal Protection Measures Privately negotiated deals may provide for cer- tain deal protection measures, such as break-up fees or matching rights. The usual practice is to reserve exclusivity for a certain period of time. However, providing for deal protection measures in auction deals is not that common. 6.11 Additional Governance Rights The scope of the governance rights granted by law to bidders varies according to shareholding
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