CHANGES ON MANDATORY BID IN TAKEOVER TRANSACTIONS IN PUBLIC COMPANIES IN TURKEY
Offers for the sale of shares made during the takeover of publicly traded companies are divided into two as voluntary and mandatory. Within the scope of the mandatory offer, the shareholder who has sufficient shares to control the management in the takeover transactions of the publicly traded companies is obliged to make a takeover offer to the other partners on the date when the takeover of voting rights is announced to the public or on the date when the written agreement between the shareholders in order to seize the management control of the company is announced to the public. The Capital Markets Law regulates this situation in detail in the Communiqué on Takeover Bids numbered II-26.1 (“Communiqué”). In this legal memorandum, the changes made within the scope of the relevant Communiqué will be examined.
DETERMINATION OF SHARES SUBJECT TO THE MANDATORY OFFER
In the amendments made regarding the date to be taken as basis in determining the amount of shares subject to the mandatory takeover offer, it is envisaged that the moment when the private written agreement is disclosed to the public will be taken as the basis, in case the shareholders take control of the management by making a special written agreement among themselves. Likewise, when management control is acquired as a result of a voluntary takeover offer or by any other method, the moment when the controlling shares or voting rights are disclosed to the public will be taken as the basis.
In addition, the Central Securities Depository will list the determined share amounts and shareholders and submit them to the investment institution one day before the takeover bid is made.
CHANGES REGARDING INFORMATION FORM
In case of a voluntary or mandatory takeover offer, certain changes have been made to the information form, which includes the matters to be disclosed to the public. Accordingly, the scope of the persons responsible for the information form has been expanded and investment companies have also been included in the scope of responsibility. This means that in case there is incomplete, incorrect or misleading information in the information form, the liability of investment companies may arise, as well as the offeree parties who are already included in the scope of liability.
CONDITIONS OUT OF THE SCOPE OF THE MANDATORY OFFER
In this context, the relevant clauses have been amended as follows, and the cases that do not fall within the scope of the obligation have been expanded.
- “Obtaining the voting rights that ensure the management control, due to the transfer transactions made among themselves, by real or legal persons who are accepted to act together in accordance with the third paragraph of Article 12 or who have made a takeover offer in the target company due to the declaration that they act together.
- The person who becomes a shareholder by acquiring some of the shares of the existing shareholders who have the management control of the partnership alone or jointly, or by acquiring a share from the capital increase made by the partnership; for the first time, sharing the management control of the partnership with an equal or lesser share within the framework of a written agreement between the shareholder or some of the shareholders who have management control before the share transfer, provided that the partnership has 50% or less of the voting rights.
- With the takeover of management control, the right to exit and sell the partnership arises.”
In such cases, the mandatory bid will not be applied. In addition, in the event that one of the above-mentioned situations arises, those who gain management control within 2 workdays at the latest following this situation are required to make a public statement, including the information under which subparagraph of the first paragraph does not arise.
SITUATIONS WHERE THE CAPITAL MARKETS BOARD PROVIDES EXEMPTION
The Capital Markets Board has foreseen some exemptions regarding the mandatory bid.
With the relevant amendments, this scope includes the acquisition of shares that led to the seizure of the control of the board of directors;
- Inheritance sharing
- Originating from the provisions of the property regime between spouses
In case of being provided with their conditions, the right of exemption may be granted from the obligation to make a takeover offer.
CHANGES TO THE EXCHANGE AND INTEREST RATES RELATED TO THE MANDATORY SHARE PURCHASE OFFER
In the event that the actual takeover bid is not realized within the stipulated time, no interest will be charged unless the party presenting the takeover bid is at fault. TLREF will be applied instead of TRLIBOR reference interest currently applied to Turkish Lira and In the event that these reference interest rates cease to apply, the rates deemed appropriate by the CMB will be used.
Regarding the mandatory bid made during the takeover transactions in publicly traded companies, various changes have been made regarding the determination of the shareholders who can benefit from the mandatory bid, the liability arising from the information form, the determination of the obligatory takeover price, and the exemptions. In this context, some issues have been clarified, while the scope of responsibility has been expanded in some issues.