Lately, domestic and international financial and corporate
players have been looking to the Athens Exchange for safe yet
high return investment opportunities in Greece and south east
Europe. They are seeking to make takeover bids on securities of
companies established in Greece and listed on the local
exchange with significant presence in the wider region. It is
common knowledge that M&As are the most transparent and
efficient way to gain control of the desired target company,
following a public offer on all or a part of the target's
capital. However, this does not seem to be their unique
advantage in the Greek legal order. The speed of their
conclusion, with an average duration of two months, allows the
investor to begin their business quickly and efficiently. The
investor will be in a position to choose a board of his own
preference within a few days of the expiry of the public offer,
and to focus on what matters: building the business.
The Greek legal framework on takeover bids (mainly 3461/2006
as in force – the Law) harmonises local law with the
relevant EU Directive 2004/25/EC. The Law distinguishes between
mandatory and voluntary offers. The former is necessary
whenever an investor gains direct or indirect control of more
than a third of the voting rights in a company, and as a result
the control of that company. In this case, the investor is
obliged, within 20 days of the acquisition, to make a public
offer (mandatory bid) for the remaining shares of the company.
The same obligation lies with every shareholder who holds more
than a third but less than half of the voting rights of the
target company, if within six months said shareholder acquires
(alone or with others), securities of the target company which
represent more than three percent of the voting rights.
Voluntary offers can be submitted at any time, and refer not
only to voting, but also to non-voting shares. The bidder can
stipulate a minimum and a maximum quantity of shares that the
bidder is willing to acquire.
Within those 20 days, or when the bidder plans a voluntary
offer, they must inform the Hellenic Capital Market Committee
(HCMC) with the submission of the bid's offer document. Within
10 days, the HCMC has to approve it, or return it for
adjustments. The offeree's period of acceptance of the bid can
vary from four weeks to eight weeks after the publication of
the approved bid's offer document. Competitive bids can be
submitted within seven days before the expiry of the bid. Also,
five days before the expiration of the initial offer, the
bidder can submit a revised offer with improved terms.
During this period, the target's management may adopt a
hostile or friendly attitude towards the bid. The management
must prepare in writing (and make public) its opinion on the
bid and the reasons on which it is based, including its views
on the effects of implementation of the bid on all the
company's interests, with special attention on the impact on
the company's employees, and on the bidder's strategic plans
for the target company.
Finally, if the bidder gains more than 90% of the voting
shares, they are entitled to squeeze out the minority
shareholders, whereas a sell-out right is also ensured for the
initially dissenting shareholders. Both rights can only be
exercised within three months of the takeover.
The three main advantages of the legal framework are:
transparency in the process through the offer document; speed,
so that the target's activities are not postponed and their
financial and credit position is not affected; and protection
of minority shareholders' rights.
As Greece appears to be emerging from a dramatic six years'
recession, with the need for new direct foreign investments,
opportunities in the Athens Exchange have been created, where
leadership and know-how in business is equally important as
capital. Public M&As may prove to be the ideal vehicle for
investors who wish to establish their position in the south
east European market.
Panagiotis Drakopoulos and Evangelos Margaritis