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On June 16 the Ministry of Justice submitted a Draft Takeover Code introducing a mandatory public tender offer to all shareholders of listed target companies (excluding companies whose shares are traded in the over-the-counter market [Sonstiger Wertpapierhandel]). The Draft Code provides that the mandatory offer will be triggered by the acquisition of shares representing 30% or more of the voting rights in the target, irrespective of whether this acquisition of de facto control occurs through a voluntary public offer, a private purchase of a block of shares or multiple purchases in the market.

The mandatory offer must be extended to all equity securities (including non-voting preference shares) that have been issued and are listed in Austria. The discount implied in the public offer price relative to the price paid for the control block must not be greater than 15%. According to the Draft, the bidder must submit an offer document which is to be reviewed by a newly established Takeover Commission (Übernahmekommission) at the Vienna Stock Exchange. Furthermore, the parties may appeal to a new Takeover Authority (Übernahmebehörde). Both the Takeover Commission and the Takeover Authority will be independent bodies made up of specialists.

The Draft Takeover Code is designed to comply with the forthcoming EU Takeover Directive. It is expected to come into force on January 1 1998.

Peter Huber

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