• It is the spirit and not the form of law that keeps justice alive.
    Earl Warren


The shareholders of a public company who are controlling such company are obliged to launch a mandatory tender offer (MTO) to purchase the shares of the minority shareholders or shareholders who are not in control of the company under certain circumstances, as per the Turkish Capital Markets law and its regulations. Since certain acquisitions of shares of public companies may trigger the MTO requirement, this should be taken into account before investing in a public company. The procedures and principles regarding the execution of an MTO are set out in the Communiqué on Tender Offer Serial No. II-26.1 (the “Communiqué”) issued by the Capital Markets Board of Turkey (the “CMB”) in 2014.

The CMB now introduced its Amendments in the Communiqué on Tender Offer (or Takeover Bids) Serial No. II-26.1.b on June 5th, 2018 with the Official Gazette No. 30442 (the “Amendment”).

As a general rule, mandatory tender offer is triggered when a person or persons acting together would acquire shares of a publicly-held company in part or in whole, which results in the acquisition of the control over such company. In that case, the acquiring persons are obliged to make a mandatory tender offer with respect to the mandatory acquisition of the remaining shareholders’ shares.

Article 18 of the Communiqué foresees those cases to which the CMB may grant exemption from the obligation to make a mandatory tender offer; and in the Amendment, the following instances are included to the CMB’s exemption:

1. When the bank becomes the owner of shares which were given to the bank as a security of a credit pursuant to Article 47 of the Capital Markets Law, or when the third parties’ purchase of the shares from the bank or special purpose vehicle (SPV), the founders of which include the bank.

2. When the share transfer is made for the compliance with a legal provision that determines the qualification of the shareholding.

While the Amendment clarifies the definition of SPV by referring to the Turkish Accounting Principles, the scope of the second paragraph seems to capture the interest of the markets due to its wide drafting.

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