CZECH REPUBLIC Law and Practice Contributed by: Petr Janů, Vladislav Klimeš and Leoš Vavřík, BADOKH
general rule, voluntary takeover offers may not be launched within one year after the announce - ment of the results of a mandatory takeover offer or after a previous voluntary takeover offer. 6.5 Minimum Acceptance Conditions While the bidder may determine the minimum acceptance threshold in its voluntary takeover offer, the mandatory takeover offer shall be unre - stricted and unconditional in this respect. The thresholds usually considered by bidders are: • over 50% of voting rights (simple majority), which usually enables the shareholder to make simple majority decisions such as the appointment of board members or dividend distributions; • two-thirds of voting rights, which usually enables the shareholder to make decisions such as increasing the registered capital and issuance of new shares; • three-quarters of voting rights, which usually enables the shareholder to make even more serious decisions such as decisions on merg - ers; and • 90% of voting rights, which gives the share - holder the right to start a squeeze-out pro - cess (while also giving the minority sharehold - ers the right to sell their shares to the majority shareholder). 6.6 Requirement to Obtain Financing It is legally possible to structure a private M&A transaction so that the settlement is depend - ent on the purchaser obtaining the financing. However, this is usually not accepted by the seller. Quite to the contrary: sellers usually seek some sort of reassurance that the purchaser has secured the financing before entering into the
later stages of the negotiation, prior to entering into binding agreements at the latest. For public offers, financing shall be secured upfront and the Czech National Bank may request the bidder to prove that it has sufficient funds to finance the bid. 6.7 Types of Deal Security Measures The bidder may generally seek any kind of deal security measure that is commercially negotia - ble. The general freedom of contract applies. A notable trend that has gained momentum since the COVID-19 pandemic is the increasing fre - quency with which purchasers are negotiating material adverse change clauses, more often than they did before the pandemic, to protect themselves against unforeseen events that may adversely affect the target (including disruptions such as the COVID-19 pandemic). 6.8 Additional Governance Rights Where there is a multitude of shareholders, it is common to extend the protection and instru - ments afforded under statutory corporate law either by entering into a shareholders’ agreement or at least by extending the articles of associa - tion. These documents usually contain clauses addressing the right to appoint/dismiss board members, reserved matters with veto rights of the minorities, restrictions on share transfers, anti-dilution protection, escalation/deadlock Shareholders may vote by proxy and this is com - mon practice. Simple written power of attorney is usually sufficient. In some cases, a certified signature of the shareholder on the power of attorney is required (ie, notarised and apostilled or even super-legalised, where applicable). clauses and exit rights. 6.9 Voting by Proxy
579 CHAMBERS.COM
Powered by FlippingBook