The Communiqué Amending the Communiqué on Tender Offers No. II-26.1 (II-26.1.ç) (“New Communiqué”), the draft of which was published by the Capital Markets Board (the “Board”) on 1 February 2021 on its official website, entered into force on 16 October 2021 through publication in the Official Gazette.
1. Persons Benefiting from Tender Offers
With the New Communiqué, persons who will benefit from tender offers are limited to the shareholders of the target company at the date of the disclosure of the acquisition of the shares or voting rights triggering the tender offer.In that respect, a list showing the shareholders who are entitled to benefit from the tender offer and the amount of shares that they hold in the target company shall be shared by the Central Registry Agency one business day prior to the commencement date of the tender offer.
2. Brokerage Agreement/Information Form
It is prohibited to include provisions in the brokerage agreement to be executed with the brokerage firm for the tender offer and/or the information form to be prepared in that respect preventing the shares on which there are transaction restrictions, legal disputes or any other claims, from participating to the tender offer.The purchase price of the said shares should be deposited in an interest bearing account until the finalization of the legal dispute or the elimination of the transaction restriction.
3. Events where the Mandatory Tender Offer is not Triggered
With the New Communiqué, in addition to the current exceptions, the mandatory tender offer obligation will also not be triggered in the following cases:
- Triggering of squeeze-out and sell-out rights as a result of gaining management control;
- In the case of capital increases where preemption rights have not been restricted, change of management control through acquisition of shares by the existing shareholders;
- Gaining management control unintentionally due to reasons, which are listed under the New Communiqué.
In addition to the above, the exception regarding sharing of the management control of the target company, equally or to a lesser extent and for the first time, through acquisition of a portion of shares of the existing shareholder(s) holding the management control of the target company through a written contract, provided that they own 50% or less of the voting rights of the target company, is expanded to include capital increase. Additionally, intragroup share transfers are also included in the exceptions.
With the New Communiqué, acquisition of management control as a result of inheritance, portion of inheritance or due to matrimonial property regime provisions or legal requirements are also considered among the exemptions.
5. Mandatory Tender Offer Price
With the New Communiqué, in case the Board takes a decision on (i) the implementation of the provisions of relevant provisions of the Capital Markets Law due to market abuse; or (ii) acknowledgment of extraordinary events affecting the economy or sector with respect to period taken as a basis for the determination of the mandatory tender offer, the periods in the said decision shall not be taken into account during the calculation of the mandatory tender offer price and those periods shall be added to the beginning of the base period.
Additionally, no interest shall accrue due to failure to initiate the tender offer in the designated periods, in case no fault can be attributed to the bidder. On the other hand,TRLEF shall apply instead of TRLIBOR in the cases where interest will accrue.
6. Mandatory Tender Offer Process
An application shall be made to the Board within 6 business days as of the delivery of the resolution of the Board determining the triggering of the mandatory tender ex officio.
Additionally, the period to be taken into account for the due completion of the mandatory tender offer within the designated periods shall be the latest date stipulated under the Communiqué.
7. Liability for the Information Form
With the New Communiqué, brokerage firms, in addition to the signatories of the brokerage firms, are also included within the persons who are liable for the inaccuracy or insufficiency of the information form.
Our evaluations within the scope of this newsletter do not constitute any legal opinion or legal advice and Pekin Bayar Mizrahi cannot be held responsible for such evaluations. Should you request further information on what the new amendments bring, please contact our team.