Completing the transaction

Hostile transactions

What are the special considerations for unsolicited transactions for public companies?

Unsolicited takeovers are rare on the Polish market. Polish law does not distinguish between hostile or recommended takeovers and, as a result, anti-takeover devices are not broadly regulated. In addition to encouraging the shareholders not to subscribe to the tender offer in the management board opinion on the bid, the articles of the association of public companies might contain certain limited anti-takeover provisions, including among other things, the certain corporate rights like the voting privileges attached to shares or limitations like the restrictions to exercise the voting rights do not bind in the event of an unsolicited tender offer. The execution of the above anti-takeover measures requires the approval of shareholders meeting given during the unsolicited tender offer.

The management board acting alone or with the assistance of the supervisory board or the major shareholders may take certain measures to protect the company against a hostile takeover bid before it is announced as well as after its announcement. These measures may include:

  • agreeing on high severance payments for dismissed management board members;
  • making agreements with the major shareholders under which the shareholders undertake not to sell shares to anyone other than the signatories of the agreement;
  • conferring upon an individual shareholder specific rights, in particular, the right to appoint or remove members of the management or supervisory board;
  • increasing the share capital by issuing new shares to increase the cost of acquisition – the discouraging effect may be reinforced if new shares are issued to shareholders least likely to accept the tender offer (by depriving other shareholders of their pre-emptive rights);
  • selling valuable company assets to decrease the company’s value;
  • purchasing shares in the acquiring company in a number granting the right to adopt a resolution suspending the further acquisition of the company’s shares;
  • acquiring companies or businesses in the acquiring company’s sector to create antitrust law obstacles; or
  • acquiring and redeeming the company’s own shares. Redemption raises the price of the remaining shares, thereby making the bid less favourable for the shareholders.


In practice, if the management board supports a takeover bid, it is more willing to disclose to the bidder the company’s documents during the due diligence process. On 30 September 2015, the Act on Control of Certain Investments came into force to protect Polish companies in strategic sectors from hostile takeovers. 

Break-up fees – frustration of additional bidders

Which types of break-up and reverse break-up fees are allowed? What are the limitations on a public company’s ability to protect deals from third-party bidders?

Break-up and reverse break-up fees are not regulated in Poland and are permissible as long as they are not excessive and do not breach generally applicable legal principles, such as the principle of social coexistence. A break-up fee may be reduced by a court if it is found to be grossly excessive. In practice, the management board of the target is unlikely to agree to pay a transactional break-up fee because it would be difficult for it to justify that it was in the best interests of the target.

Government influence

Other than through relevant competition regulations, or in specific industries in which business combinations or acquisitions are regulated, may government agencies influence or restrict the completion of such transactions, including for reasons of national security?

Government agencies may influence business combinations in relation to certain strategic companies.

Golden shares, which governments use to maintain a certain level of control of privatised companies, especially those operating in strategic sectors, are still widespread among EU countries, and Poland is no exception. However, as these shares are an obstacle to the free movement of capital within the European Union, they may only be maintained in certain justified circumstances, such as national security.

Moreover, new legislation aimed at protecting strategic Polish companies from hostile takeovers was introduced by the Polish parliament in the form of the Act on Controlling Specific Investments dated 24 July 2015. The need for this legislation was recognised in 2012, after the Russian company Acron bid for the Polish chemicals conglomerate Grupa Azoty. The Act obliges investors to notify Poland’s Minister of Energy or the Prime Minister of their intention to buy shares in a strategic company. The relevant authority then has 90 days to either allow or block the deal. The list of strategic companies has been determined by the Council of Ministers with the ordinance dated 23 December 2019 and includes nine Polish private and public companies in the TMT, energy, oil, gas, fuel and chemicals sectors.

Conditional offers

What conditions to a tender offer, exchange offer, merger, plan or scheme of arrangement or other form of business combination are allowed? In a cash transaction, may the financing be conditional? Can the commencement of a tender offer or exchange offer for a public company be subject to conditions?

Generally, business combinations may be subject to conditions agreed by the parties. There is no explicit list of permissible conditions but all conditions should comply with the general principles of law, such as good faith and fairness, and the fulfilment of a condition should not be subjective or at the sole discretion of one of the parties.

Under Polish law, a share or asset acquisition agreement can either be: preliminary in nature and require the execution of a second agreement transferring the shares or assets, or final in nature and only subject to the fulfilment of conditions precedent (if any). However, as the transfer of real estate under Polish law cannot be conditional, when real estate is one of the assets to be transferred and the transaction is subject to conditions, a preliminary acquisition agreement is executed followed by a final transfer agreement.

Tender offers can be conditional or unconditional. The most common tender offer conditions are the adoption of a shareholder or supervisory board resolution, the execution of a specified agreement by the target, regulatory clearance, or the bidder acquiring a minimum number of shares. However, the financing of the tender offer cannot be conditional (it must be secured at the time the tender offer is announced).


If a buyer needs to obtain financing for a transaction involving a public company, how is this dealt with in the transaction documents? What are the typical obligations of the seller to assist in the buyer’s financing?

In most situations involving a public company, the seller does not assist in the buyer’s financing. When a tender offer is announced the bidder must already have committed funding for all the tendered shares. This committed funding must be documented by a certificate issued by a bank or other financial institution that granted the funding or acted as an intermediary in the granting of the funding.

Minority squeeze-out

May minority stockholders of a public company be squeezed out? If so, what steps must be taken and what is the time frame for the process?

A squeeze-out procedure applies to the minority shareholders of a public company. A majority shareholder of a public company who individually or together with its group companies and concert parties reaches or exceeds 95 per cent of the target’s total vote, may purchase the remainder of the shares within three months from the date the 95 per cent threshold is reached or exceeded. In general, the tender offer price rules also apply to the squeeze-out price. Prior to the announcement of the squeeze-out, the offeror obtains collateral for the total squeeze-out price, documents the collateral with a certificate issued by a bank or other financial institution, and retains a brokerage house. The brokerage house notifies the Financial Supervisory Authority and the Warsaw Stock Exchange of the planned squeeze-out and its terms not later than 14 business days prior to the announcement of the squeeze-out. The squeeze-out announcement sets the terms of the squeeze-out, including the squeeze-out date, which is the date on which the transfer of shares and purchase price occurs. The minority shareholders’ shares are blocked on their securities accounts as soon as the Polish Securities Depositary is notified of the squeeze-out until the squeeze-out date.

The entire squeeze-out procedure in a public company takes approximately four to five weeks.

Waiting or notification periods

Other than as set forth in the competition laws, what are the relevant waiting or notification periods for completing business combinations or acquisitions involving public companies?

The tender offer procedure imposes the following timetable. The brokerage house notifies the Financial Supervisory Authority and the Warsaw Stock Exchange of the offeror’s intention to announce the tender offer no later than 14 business days before the opening of the subscription period. No later than 24 hours after this notification, the tender offer is disclosed to the information agency that publishes the tender offer. If the tender offer relates to a subscription exceeding the thresholds of 33 per cent or 66 per cent, the management board of the target publishes its opinion on the announced tender offer no later than two business days before the opening of the subscription period. The subscription period applicable to a tender offer cannot be shorter than 14 calendar days (or 30 calendar days if the tender offer is for all the shares) nor longer than 70 calendar days.

Obtaining the relevant corporate consents for the contemplated business combination may also result in the need to convene a shareholders’ meeting or a management or supervisory board meeting.

In relation to domestic and cross-border mergers, the waiting period between the announcement of the merger plan or the notification of the shareholders of the intended merger and the shareholders’ meetings at which the merger is put to a vote is one month. In a division, the applicable waiting period between the announcement of the division plan or the notification of the shareholders of the intended division and the shareholders’ meetings at which the division is put to a vote is six weeks.

If an expert opinion relating to the merger (including a cross-border merger) or division is commissioned, this may further extend the aforementioned waiting periods. This opinion must be prepared within two months of the appointment of the expert by the court, which occurs after the merger plan is filed with the court. Moreover, the merger and division timetable must take into consideration the right of the shareholders to inspect certain merger and division documents, including the merger or division plan as well as the expert opinion, for a period of one month prior to the shareholders’ meeting at which the merger or division is put to a vote.

If, in the course of the business combination shares in the company acquiring the business will be offered to shareholders of the acquired company, a prospectus or an offering memorandum for offering these shares may need to be prepared, then approved by the Financial Supervision Authority and disclosed to the public. The proceedings with the Financial Supervision Authority to approve the prospectus or the offering memorandum usually takes at least two months.