CZECH REPUBLIC Law and Practice Contributed by: Petr Janů, Vladislav Klimeš and Leoš Vavřík, BADOKH
4.5 Filing/Reporting Obligations A person shall notify the company (and the Czech National Bank, in the case of a publicly traded company) once such person reaches, exceeds or falls below the thresholds stated in 4.2 Mate- rial Shareholding Disclosure Threshold . Czech competition law further stipulates certain notifi - cation requirements if the acquisition of shares would establish control over the company. 4.6 Transparency When acquiring shares in private or public com - panies, shareholders do not have to reveal their intention regarding the purpose of the acquisi - tion. As an exception to the above, a bidder (share - holder) in the case of a public company shall publicly announce that the bidder has made a final decision to initiate the steps leading to a takeover bid or that circumstances have arisen that have given rise to a bid obligation. The bid - der shall then include information regarding its intention with the company in the bid (such as changes to the current business, changes con - cerning the employees, and so forth). 5. Negotiation Phase 5.1 Requirement to Disclose a Deal There is no obligation to disclose the details of the transaction (or any other information related thereto) to the public if the deal is private (ie, the parties to the transaction as well as the target company are private companies). If the deal is not private, the bidder shall disclose the deal without undue delay. Such disclosure shall include (i) information that the bidder has decided to make a takeover bid (voluntary take - over bid) or, in the case of a natural person, that
they have taken a final decision to initiate the steps immediately leading to a takeover bid, or (ii) that circumstances have arisen which have given rise to a bid obligation (mandatory takeo - ver bid). This disclosure should be done transparently and in such a way as to prevent a selective announcement in terms of who is being noti - fied (as would be the case, for example, if the announcement is made via regional publication only). Publication with national reach is recom - mended, whereas the contents of the announce - ment should be relevant to the actual intention of the bidder. To protect inside information and prevent mar - ket distortions, the bidder must take measures to avoid premature or unequal dissemination of information regarding the fact that it is consid - ering or intending to launch a takeover bid. The same shall apply in relation to steps that will result in the creation of a bid obligation. There - fore, the offeror shall instruct all persons who carry out activities for it in connection with the takeover bid of their duty of confidentiality and the prohibition on the use of inside information and shall take measures to prevent the dissemi - nation of inside information and its use. The rules on the disclosure of inside information in accordance with the Market Abuse Regulation may apply. 5.2 Market Practice on Timing Obligatory public disclosures in M&A deals are rare since the vast majority of deals in the Czech Republic are private (see 5.1 Requirement to Disclose a Deal ). Market practice tends towards an active approach of the parties. They usually disclose
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