BULGARIA Law and Practice Contributed by: Nikolay Zisov, Svetlina Kortenska, Deyan Terziev and Teodora Peycheva, BOYANOV & Co
ther the converting nor the receiving company can change its legal form simultaneously. The specific requirements for a post-spin-off business combination depend on the nature of the transaction. Typical requirements may include adherence to applicable tax regulations, filing with the National Revenue Agency (NRA), obtaining merger clearance from the Commis- sion for Protection of Competition (if necessary), registering relevant changes with the Bulgarian Commercial Register, and conducting due dili- gence on the business transaction. 5.4 Timing and Tax Authority Ruling A spin-off typically takes at least four months to complete. The timeline is influenced by statu- tory notification requirements to relevant authori- ties, preparation of necessary documentation, and obtaining certificates from foreign company registers, including notarisation and apostille. Before initiating the spin-off, parties must notify the NRA. The NRA issues a certificate within 60 days of the notification submission. 6. Acquisitions of Public (Exchange-Listed) Technology Companies 6.1 Stakebuilding There is no sufficient publicly available infor- mation to conclude whether it is customary for an investor to approach the acquisition of a public company by way of gradually building and acquiring a stake prior to making a volun- tary or mandatory takeover bid. However, it is not unusual for a potential investor to acquire minority stakes of shares in a public company before proceeding with the acquisition of larger stakes of shares, which would enable either (i) a voluntary takeover offer (in case the investor
acquires more than one-third of the shares in a company which has a controlling shareholder) or (ii) which would trigger a mandatory offer plac- ing requirements (in case of acquisition of more than one-third of the shares in a company which does not have a controlling shareholder or more than 50% of the voting rights absent controlling shareholder). Strategies for use of “creeping” minorities may also apply to the extent an investor has acquired more than one-third but less than two-thirds of the voting rights and is generally prohibited from acquiring more than 3% of the shares within one year. On such occasions, the investor may acquire up to 3% per annum until mandatory offer threshold is reached and a mandatory offer is placed (please consider 6.2 Mandatory Offer ). The POSA also provides for the option for a per- son who has acquired more than 90% of the vot- ing rights to register a tender offer with respect to the outstanding shares. If it does not wish to register a tender offer within 14 days of the acquisition of 90% of the voting rights, it will be required to notify the shareholders, the regulated market and the FSC on its intent to register a tender offer at least three months in advance of such future tender offer. Finally, a person who holds at least 5% of the shares in a public com- pany and wishes to acquire more than one-third of the voting rights will be entitled to publish a tender offer after clearance of the draft tender offer by the FSC. The calculation of the thresholds above is based on the compliance with mandatory disclosure of participation requirements under the POSA. The applicable thresholds for regulatory disclosure of voting right participations in the general meeting of the shareholders under the POSA are set to 5% of the voting rights and percentages multiple
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