GERMANY Law and Practice Contributed by: Marc Löbbe, Michaela Balke, Oliver Schröder and Martin Kolbinger, SZA Schilling, Zutt & Anschütz
11. Activism 11.1 Shareholder Activism
( Freigabeverfahren ) – and now considerably reduces the potential for interference by minor - ity shareholders. 11.2 Aims of Activists Activist shareholders in Germany pursue a wide variety of objectives. In recent years, share - holder activism has increasingly focused on corporate strategy and restructuring/spin-off measures (eg, Bilfinger, ThyssenKrupp and more recently Fresenius) as well as takeover bids (eg, Deutsche Börse, Stada, Daimler and Celesio). This upward trend is expected to continue. 11.3 Interference With Completion Activist shareholders with a reasonable direct and/or proxy majority may be in a position to determine the satisfaction of a minimum accept - ance condition and thus influence the success of the offer. Often, respective positions are required immediately prior to or even during a pending transaction to exert influence on the offer price. Due to the already existing frequency and the current trend regarding the objectives of share - holder activism as well as the expected increase of such shareholder activism (not least due to the EU Shareholders’ Rights Directive), public transactions are increasingly exposed to risk in this respect. In addition, activist shareholders often intervene in corporate and restructuring measures subse - quent to a transaction, which can also influence the decision to make an offer in the first place.
Shareholder activism has increased in recent years in Germany. To achieve their goals, activ - ist shareholders make use of their minority rights under the German Stock Corporation Act (eg, the right to request an addition to the agenda or sub - mit counterproposals at shareholders’ meetings, or to initiate legal disputes with board members or majority shareholders), as well as the pos - sibilities to challenge shareholders’ resolutions (see below). The motives of activist shareholders are manifold, and their approach varies accord - ingly, ranging from limited activism to aggressive interaction with the company. The latter cases, in particular, have increased considerably in recent years (see 11.2 Aims of Activists ). Shareholders can file actions for rescission against resolutions of the general meeting on major structural measures such as statu - tory mergers, control and profit transfer agree - ments or squeeze-outs, to block the entry in the commercial register that is mandatory for them to become effective, and these actions have become a common tool for certain hedge funds (to be distinguished from activist inves - tors in the narrow sense). This practice of pro - fessional minority shareholders to use such legal proceedings to their own advantage is impor - tant for companies and investors to take into account. However, a court procedure has been introduced specifically to overcome this block - ing effect more quickly – the release procedure
739 CHAMBERS.COM
Powered by FlippingBook