This memorandum provides a short summary of offer procedures in Germany pursuant to the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und  Übernahmegesetz) with respect to companies listed on a regulated stock exchange in the EEA. 

Types of offers/bids

Different procedures apply to takeover bids for listed companies: The aim of ordinary offers is to acquire shares in a target company without gaining control over the company or to increase a controlling position (control meaning the holding of at least 30% of the voting rights). No minimum price is prescribed for this and partial offers are permissible. 

Takeover bids (freiwiliges Übernahmeangebot) are intended to acquire "control", which is defined as 30 % of the voting rights. Such bids can be made conditional (e.g. minimum acceptance rate) and must be made at a minimum price based on the weighted average market price over the previous three months and the highest consideration paid by the bidder six months prior to the publication of the offer (on- and off-market). Mandatory offers (Pflichtangebot) have to be made after acquiring control. Minimum price rules apply in these cases too.

Process of a takeover or mandatory bid

Making an offer or obtaining control

The procedure is always initiated by the decision of a bidder to make an offer or by exceeding the 30% control threshold, in which case the bidder must inform BaFin and the stock exchange without undue delay, followed by other publications, and the management of the target company and the employees of the bidder.

Preparation and submission of offer documents

Within four weeks after publication of the decision to make an offer, the offer document has to prepared and submitted to BaFin containing necessary details of the offer and on the bidder, its plans with regard to the target company and its employees.  Based  on the offer documentation, the shareholders of the target company are to decide whether or not to accept the offer. 

Review of the offer documents by BaFin 

Within ten working days, BaFin must conduct an examination of the offer documentation, i.e. whether it complies with statutory requirements, and may either permit or prohibit the publication of the offer document.

Offer phase

In the case of permission being granted, the offer documents must be published on the internet and via an electronically operated distribution system, e.g. the Electronical Federal Gazette, without undue delay. At the same time, the bidder has to provide the offer document to its employees and the management of the target company (which in turn has to provide it to its employees). The management board and the supervisory board of the target company have to give a statement on the offer (which in turn needs to be published).

The publication of the offer triggers the start of the acceptance period during which the shareholders can accept the offer (4 to 10 weeks). The bidder has to regularly inform the public of the status of the offer (weekly  during the acceptance period,  daily  in the last week of the acceptance period as well as immediately after the end of the acceptance period).

Timeline

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