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Editorial

M&As in Greece: Stellar opportunities for profits of emerging markets in the most mature market in..

Lately, domestic and international financial and corporate players are looking closely on the Athens Exchange seeking for safe yet high return investment opportunities in Greece and the wider South East Europe through 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 consist 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 Greek legal order. The speed of their conclusion, with an average duration of two months, allows the investor to begin with his businesses without considerable waste of time and resources. As of this, he is in position to choose a board of his own preference almost the very following day of the expiry of the public offer's time and to focus on what he primarily intended and is good at - making business.

 

The Greek legal framework on takeover bids (mainly 3461/2006 as in force, hereinafter "the Law") is indeed the harmonization instrument of local law with the pertinent 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 the 1/3 of the voting rights in a company and in result the control of that company, in which case said investor is obliged, within 20 days from the acquisition, to make a public offer (mandatory bid) for the remaining shares of the company. The same obligation burdens every shareholder who holds more than 1/3 but less than ½ of the voting rights of the target company, if within six months said shareholder acquires, alone or with persons with whom said shareholder is acting in concert, securities of the target company which represent more than 3% 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 said bidder is willing to acquire.

Within those 20 days, or when he plans a voluntary offer, the bidder has to inform the Hellenic Capital Market Committee ("HCMC") with the submission of the bid's offer document. Within 10 days HCMC has to approve it, or return it for adjustments. The offeree's period of acceptance of the bid can vary from 4 weeks to 8 weeks after the publication of the approved bid's offer document., competitive bids can be submitted can be submitted within 7 days before the expiry of the bid. Also, 5 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 is obliged  to 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, said bidder is entitled to "squeeze out" the minority shareholders whereas , a "sell out" right is also ensured for the initially dissented shareholders. Both rights can be exercised only within three months from 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 financial and credit position is not affected, and protection of the rights of the minority shareholders. As Greece seems to start recovering from a dramatic 6 years' recession and with the need for new direct foreign investments, have created several opportunities in the Athens Exchange where leadership and know-how for solid business is equally important as capital public M&As can prove to be the ideal vehicle for investors who wish to to establish their position in the South East European market in the years to come .

 

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