BULGARIA Law and Practice Contributed by: Yordan Naydenov, Mihail Vishanin and Hristian Gueorguiev, Boyanov & Co.
voting on the subject. However, disputes relating to conflicts of interest rarely end up in court.
reasoned opinion on the proposed transaction to the Financial Supervision Commission, to the bidder, and to the representatives of the employ - ees, or, where there are no such representatives, to the employees themselves, inter alia as to the repercussions on the company and the employ - ees from accepting the tender offer and the stra - tegic plans of the bidder for the target company and their likely implications for the employees and the place of business. In taking defensive measures, the general obli - gations of the directors of due care and loyalty to the company and to the shareholders still apply. 9.5 Directors’ Ability to “Just Say No” The directors are not entitled to “just say no” . However, they can influence the takeover pro - cess by seeking an alternative, more favourable offer or by delivering a well-justified and con - vincing negative opinion on the takeover. Litigation relating to M&A deals is not frequent. Prudent parties, especially in private M&A deals, would typically agree on reasonable protective measures aiming at sparing unnecessary court disputes (eg, reasonable de minimis and basket amounts). During the recent years, we have been seeing more and more cases of representation and warranties insurance, thus further reducing, if not eliminating, the risk of litigation between the parties to the deal. Another factor that may influence a decision to litigate is the cost. Appar - ently small amounts of damages, which could be even lower than the cost of the litigation (if not caught by a de minimis clause), would not justify the commercial and administrative effort to start a lengthy and expensive trial with uncer - 10. Litigation 10.1 Frequency of Litigation
9. Defensive Measures 9.1 Hostile Tender Offers
Bulgarian law does not provide for the classifica - tion of takeovers that may be defined as friendly or hostile. 9.2 Directors’ Use of Defensive Measures As mentioned in 8.1 Principal Directors’ Duties , the management body of the target company may not perform any acts aiming at frustration of the acceptance of the tender offer or inflic - tion of material difficulties or material additional expenses on the bidder. However, the directors are expected to issue a motivated statement on certain aspects of the tender offer, and as men - tioned in 7.1 Making a Bid Public , the public company is to make a disclosure of such state - ment. In addition, the management body may seek a competitive tender offer containing more favourable terms. Hence, the management body has its means to oppose a takeover attempt, should, in its motivated view, this be in the inter- ests of the company and the shareholders. 9.3 Common Defensive Measures The most common defensive measure is the entitlement of the management body to search for an alternative, more favourable tender offer and to express negative views on the presented tender offer. 9.4 Directors’ Duties Upon enacting defensive measures, the direc - tors must comply with the law. Within seven days after receipt of any tender offer, the management body of the affected company must present a
340 CHAMBERS.COM
Powered by FlippingBook