GREECE Law and Practice Contributed by: Stefanos Charaktiniotis, Danai Falconaki, Stathis Orfanoudakis and Nadia Axioti, Zepos & Yannopoulos
9.2 Directors’ Use of Defensive Measures
that may be used by the board of directors of the target company as a defence is actively search - ing for alternative tender offers competitive to the one that has already been launched. Howev - er, in order for the recipients to be able to recall their acceptance declarations regarding the initial tender offer, a relevant right should have been provided for in the tender offer prospectus. The co-operation and arrangements between the board and the offerors are disclosed in the board’s justified opinion on the tender offer pub - lished with the HCMC. On the other hand, aside from the board of direc - tors’ use of defensive measures, Law 3461/2006 has introduced provisions for the neutralisation of any pre-existing statutory defensive measures which had been included preventively in the tar - get’s articles of association in order to secure the company from any future actions that could lead to its acquisition. The beneficiaries of any such neutralised statutory defensive measures are entitled to receive compensation for any dam - age they suffered due to such process. It should be noted, though, that it is highly unlike - ly for Greek listed companies to have included such statutory defensive measures in their arti - cles of association. 9.4 Directors’ Duties See 9.2 Directors’ Use of Defensive Measures . Directors’ duties within a tender offer process are generally the same as in 8.1 Principal Direc- tors’ Duties and mainly consist of a duty of loyal - ty – including a duty of non-competition – which requires the directors to promote the company’s best interests, accomplish the company’s objec - tives and omit actions that could be harmful to the company’s interests, as well as a duty of secrecy safeguarding any information relating to
Law 3461/2006 does not allow directors to use defensive measures within a mandatory or vol- untary tender offer. The Greek legislature has implemented the board neutrality rule providing that, as of notification by the offeror of its inten - tion to proceed with a tender offer and up to the publication of the tender offer’s result (or its revocation), the board of directors of the offeree company must obtain prior authorisation from the general meeting of shareholders before tak - ing any action that might result in the frustration of the tender offer. Also, any decisions of the board of directors prior to such period that have not been put in place in whole or in part, require the consent or confirmation of the general meet - ing. The only exception directly applicable to the board of directors’ powers is its right to search for alternative offers. In light of this, decisions made by the board of directors but previously specifically authorised by the general meeting of shareholders, resolv - ing on defensive measures against the tender offer, could be applicable during a tender offer process. However, given the structure of the M&A market and subject to the applicable mar - ket abuse regulations, it seems highly unlikely that the existing shareholders will not be acting under an arrangement with the offeror for it to acquire the required shareholdings which will trigger a mandatory offer. 9.3 Common Defensive Measures As mentioned in 9.2 Directors’ Use of Defen- sive Measures , the applicable legislation does not allow directors to use defensive measures within a mandatory or voluntary tender offer unless upon the prior authorisation or approval by the general meeting of shareholders of the target company. In practice, the main measure
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