BOSNIA & HERZEGOVINA Law and Practice Contributed by: Bojana Bošnjak-London and Ezmana Turković, Marić & Co
6.2 Mandatory Offer Threshold All three applicable takeover laws set a manda - tory offer threshold: 25% in the Federation of Bosnia and Herzegovina and Brčko District, and 30% in Republika Srpska. 6.3 Consideration Cash is the most commonly used method of consideration in takeover bids. Although the law provides for an option to deposit shares to be used as consideration, this is rarely used in practice. 6.4 Common Conditions for a Takeover Offer The offeror cannot condition the obligation to purchase shares that are the subject of a man - datory takeover offer, except that the shares that are encumbered will not be purchased. A volun - tary takeover offer can be conditioned on reach - ing a specific success threshold, which cannot be lower than the controlling threshold. 6.5 Minimum Acceptance Conditions There are no minimum acceptance conditions for tender offers in Bosnia and Herzegovina. 6.6 Requirement to Obtain Financing Financing for the tender offer must be fully secured prior to launching it and the regula - tors will not approve a tender offer unless the funds for the acquisition of the entire outstand - ing shares of the target are deposited with the authorities, or an adequate bank guaranty pro - vided. 6.7 Types of Deal Security Measures Deal security measures are not governed by the laws of Bosnia and Herzegovina, and therefore the parties may agree on them at their own dis - cretion. Although they are not commonly used,
instances of non-solicitation and break-up fees have been observed in practice. 6.8 Additional Governance Rights If a bidder does not seek 100% ownership of a target company, it can negotiate various govern - ance rights to influence the company’s opera - tions. These rights may include board represen - tation (allowing the bidder to appoint members to the board and participate in strategic deci - sions) or protective provisions requiring a super - majority for significant changes. Additionally, pre-emptive rights allow the bidder to purchase additional shares before they are offered to oth - ers, thereby maintaining or increasing their own - ership stake. Tag-along and drag-along rights further ensure security if other investors become involved. 6.9 Voting by Proxy Shareholders can vote by proxy in Bosnia and Herzegovina. The form and content of the proxy are regulated by the law and form requirements must be adhered to. 6.10 Squeeze-Out Mechanisms In the Federation of Bosnia and Herzegovina and Brčko District, squeeze-out mechanisms apply only to certain joint stock companies, and only if the bidder holds 95% or more shares follow - ing a takeover offer. In Republika Srpska, the squeeze-out threshold is set at 90% and applies to both joint stock and limited liability compa - nies. 6.11 Irrevocable Commitments It is not common in Bosnia and Herzegovina to obtain irrevocable commitments to tender.
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