Takeover Commission Rulings On Distressed Situations

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Recent rulings by the Austrian Takeover Commission (TC) reflect the special challenges presented by the financial crisis. The TC has granted exceptions from the mandatory offer requirements in cases of targets or target shareholders in distress. The TC is flexible in interpreting the takeover rules, provided the specific solution is in the best interest of the free-float shareholders.

Introduction

In times of economic crisis, the special rules of the Austrian Takeover Act (TA) applicable to distressed companies would be expected to gain in importance. For takeovers of such targets, the obligation by a bidder to launch a mandatory offer can be suspended (sec 25/1/2 Austrian Takeover Act). Alternatively, exceptions to the minimum price rules can be granted (sec 26/3/3