CZECH REPUBLIC Law and Practice Contributed by: Petr Janů, Vladislav Klimeš and Leoš Vavřík, BADOKH
7. Disclosure 7.1 Making a Bid Public
Even though it is generally possible for a share - holder to give power of attorney to a board member, this is not common practice at public companies. Public companies usually offer their shareholders long-distance voting (eg, per rol - lam voting, voting via email or post). Proxy fights are practically non-existent. 6.10 Squeeze-Out Mechanisms A squeeze-out mechanism is available for joint- stock companies (but not for limited liability companies). Once the shareholding of a single shareholder (as opposed to a group of share - holders, even if they are members of one and the same group of companies) reaches 90%, that shareholder has a right (but not the obligation) to buy out the minority shareholders. The same result can be achieved by transferring assets to the majority shareholder. The only substantial difference is that the target company is conse - quently liquidated. The minority shareholders are entitled to receive fair compensation for their shares. However, dis - putes over whether compensation was fair do not in and of themselves lead to cancellation of the squeeze-out process. 6.11 Irrevocable Commitments Irrevocable commitments to tender or vote by principal shareholders of the target company are rare. From the negotiation standpoint and depending on the shareholder structure, the bid - der would usually approach the main sharehold - er first, to try and privately negotiate some kind of commitment to sell its shares before launch - ing a public offer.
The takeover bid itself (not the announcement – see 5.1 Requirement to Disclose a Deal ) can be made public only by publication of an offer document. A draft of the offer document has to be announced to the Czech National Bank within 15 days from the announcement of the offeror’s intention to make a takeover bid. The offeror may publish the announced offer docu - ment unless the Czech National Bank prohibits the publication. Note that different rules apply in the case of a mandatory takeover bid. The offer document (for details, see 7.2 Type of Disclosure Required ) shall be published in at least one nationally distributed daily newspa - per and at the same time in a manner allowing remote access; publication in a manner allowing remote access shall not be required if the offer document is made available to the public in writ - ten form free of charge at the registered office of the target company and at the registered office of the offeror. Where the offer document is pub - lished in a manner allowing remote access and where the offeror or the target company has a website, it shall be published on that website. The articles of association of the target company may specify additional means of publication of the offer document. Where the target company’s shares are admitted to trading on a foreign regu - lated market, the offer document shall also be published in the state of such foreign regulated market. At least ten working days before the publica - tion of the offer document, the offer document shall be delivered by the offeror to the board of management and the supervisory board of the target company.
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