BULGARIA Law and Practice Contributed by: Yordan Naydenov, Mihail Vishanin and Hristian Gueorguiev, Boyanov & Co.
capital, if the threshold is passed due to reor - ganisation or cancellation of shares. The obligation described in the paragraph above also arises for any person that acquires more than 50% of the votes in the General Meeting of a public company, as well as for any person that acquires more than two-thirds of the votes in the General Meeting of a public company. If a person simultaneously exceeds more than one of the thresholds referred to above, within 14 days of the relevant acquisition, or within one month of the registration of the reorganisation or decrease of the capital exceeding the lowest threshold, such person must register a single tender offer. The tender offer registration time limit is the period that would expire first, if an obligation arose to file separate tender offers upon exceeding each threshold. 6.3 Consideration In both public and private M&A transactions, cash consideration is the principle. In public M&A transactions, the law also provides the opportunity for the bidder to offer to the rest of the shareholders, instead of cash, exchange of the acquired shares for shares which will be issued by the bidder for this purpose. In private M&A transactions, combined consid - eration of cash and equity is sometimes also applied, especially if the acquirer is a public company (or has a parent company which is publicly traded), or if the management of the tar - get is also the seller or one of the sellers (used as an incentive for the management to continue working for the target together with additional earn-out provisions or alone). The latter mecha - nism is also applied to bridge the gap in a deal environment or industry with high valuation
uncertainty, together with other tools, such as closing accounts. 6.4 Common Conditions for a Takeover Offer The law does not regulate the possibility to include conditions in a takeover offer. Based on the legal framework, we may conclude that a takeover offer is to be unconditional. Exceptions are possible to the extent that a competition clearance or other type of regulatory approval is required for the takeover. 6.5 Minimum Acceptance Conditions As noted in 6.4 Common Conditions for a Take- over Offer , mandatory offers cannot be subject to conditions, save for the conditions for obtain - ment of regulatory clearance. Furthermore, in those cases where a person holding at least 5% of the votes in the General Meeting of any public company seeks to acquire more than one-third of the votes in the General Meeting of said com - pany, that person may publish a tender offer to all voting shareholders – but in such case the offeror is obliged to purchase or to exchange, as the case may be, all voting shares held by any shareholder that has accepted the offer. Purely voluntary offers may contain conditions for any minimum threshold of acceptance. The relevant control thresholds in respect of Bul - garian public companies are: • a shareholder of more than one-third, more than 50% or more than two-thirds of the votes in the General Meeting of a public company is obliged to make a tender offer to the voting shareholders for purchase of their shares; • the holding of more than 50% of the votes in the General Meeting enables a shareholder to take most of the decisions in the General
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