BULGARIA Law and Practice Contributed by: Nikolay Zisov, Svetlina Kortenska, Deyan Terziev and Teodora Peycheva, BOYANOV & Co
to five (10%,15%, etc). These disclosure require- ments apply to both direct and indirect partici- pation and to acquisitions of multiple investors acting in concert or under mutual control, so far as such participation shall entitle the investors to vote their rights in concert, directly and indi- rectly. Respectively, disclosure requirements apply to divesting shareholders whose participation falls below the thresholds multiple to 5%. The details on the determination of the participation which require disclosure, and the disclosure proce- dures are set out in a special Ordinance of the FSC. 6.2 Mandatory Offer As a rule, a mandatory offer will need to be registered with the FSC and published (absent prohibition by the FSC) in the following cases: (i) when an investor or shareholder acquires a controlling stake of more than 50% of the vot- ing rights (directly and indirectly) or of more than two-thirds of the voting rights, unless the excess shares are transferred within 14 days of the acquisition, so that the percentage falls below the mandatory offer thresholds. In case both thresholds are reached, only one tender offer is filed; or (ii) when an investor or shareholder acquires directly or indirectly more than one- third of the votes in a public company, which does not have a controlling shareholder with more than 50% of the voting rights, unless the excess shares are transferred within 14 days of the acquisition. The obligation to file a mandatory offer shall occur in all cases of direct and indirect acquisi- tion of voting rights including by related parties or parties acting in concert. The filing for regis- tration of the offer will need to be made within 14 days of the acquisition of participation or within
one month from the date on which the reorgani- sation or the capital decrease of the public com- pany have been registered in the Commercial Register, in the cases where the thresholds for mandatory offer were reached as a result of the company reorganisation or invalidation of shares due to capital decrease. 6.3 Transaction Structures The typical transaction structures are direct acquisitions either at the regulated market (the Bulgarian Stock Exchange) or off the floor of the exchange in OTC transactions. Complicat- ed acquisition approaches (such as mergers or other forms of business combinations) are not typical, although legally feasible and practicable. 6.4 Consideration and Minimum Price Public company acquisitions in the technology industry are typically structured as cash rather than as stock-for-stock transactions, although the consideration may well be discharged by way of stock-for-stock exchange (typically in the context of public company reorganisation). Cash is permissible and can be used in a merger transaction structure as well. It is typically used in cases of voluntary or mandatory takeover/ten- der offers. However, this will largely depend on the reorganisation procedures. Pricing rules exist for the determination of the tender offer prices in the POSA and in a special FSC Ordinance. The price or the exchange value of the shares in the mandatory tender offer can- not be lower than the highest value among (i) the fair value of shares determined in the substantia - tion made in accordance with FSC Ordinance; (ii) the average weighing market value for the last six months before registration of the tender offer; and (iii) the highest value per share paid by the offeror and/or the parties related to the offeror during the last six months before registration of
50
CHAMBERS.COM
Powered by FlippingBook