BULGARIA Law and Practice Contributed by: Yordan Naydenov, Mihail Vishanin and Hristian Gueorguiev, Boyanov & Co.
4.6 Transparency If a takeover bid is made, the bidder is obliged to include in its tender offer certain information. This information must include the intentions of the bidder regarding the future operations of the public company subject to the tender offer and of the bidder, if it is a legal entity, to the extent the latter is affected by the tender offer. Further - more, said tender offer must include informa - tion regarding retention of the members of the management bodies and the public company’s staff, including any material changes in the terms and conditions of the employment contracts. In particular, the bidder’s strategic plans for the two merged companies and regarding the likely implications of the tender offer on the employees must be included in the information provided. In addition, information about the locations of the companies’ places of business and potential withdrawal from trading on a regulated market must be included as well. Public companies are obliged to disclose a deal in accordance with the principles of Article 17 of the EU Market Abuse Regulation (Regulation (EU) No 596/2014) (MAR). Hence, an analysis on a case-by-case basis should be made as to whether and when the information about the deal is to be disclosed. In principle, a public company should inform the public as soon as possible of any inside information which directly concerns that public company. 5. Negotiation Phase 5.1 Requirement to Disclose a Deal According to Article 148б of the Public Offering of Securities Act, a public company is obliged to announce to the public, within three days of its receipt, inter alia, any notification for acquisi - tion or transfer of shares, where the voting rights
associated with such shares would go above the threshold of 5% or would fall below that thresh - old, or a multiple of 5% of the number of vot - ing rights in the General Meeting of the public company. 5.2 Market Practice on Timing Non-compliance with the disclosure require - ments may lead to serious financial sanctions. Therefore, in theory, the timing of disclosure should not differ from the legal requirements. However, there might be cases of discrepan - cies between the practice on timing and the legal requirements. 5.3 Scope of Due Diligence In private M&A transactions, there are standard areas which are covered in almost all legal due diligence processes, such as title over shares, arrangements with the management, contracts with clients and suppliers, employment, litiga - tion, relationships with state authorities and data protection. Depending on the specifics of the sector in which the target operates, some other areas of focus may be added, such as title over real estate, IP rights, regulatory licences and per - mits, etc. In public M&A transactions, the legal due diligence process is usually based on public information and more in-depth analysis, and if it is based on non-public information, this would be possible subject to the restrictions upon dis - closure of information provided by the legislation and subject to compliance with the insider trade and anti-market abuse requirements imposed by the MAR legislation. In recent years, some of the additional require - ments that became regular practice during the pandemic, such as the hybrid or remote work - ing model, have persisted amongst the elements subject to employment-related review and anal - ysis.
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