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Due diligence requirements

What due diligence is necessary for buyers?

Formalised due diligence procedures with document disclosure made in virtual or physical data rooms have become the rule in private Austrian M&A transactions. As regards asset deals, the review will usually focus on:

  • whether contracts can be taken over or must be terminated; and
  • the requirement for third-party consent.

As to share deals, key review items will include change of control clauses and, particularly in the case of minority stake acquisitions, shareholder arrangements.

Information

What information is available to buyers?

Certain information is available to buyers as it comes from publicly accessible sources (eg, the documents filed with commercial registers, published financial statements and stock exchange filings). The scope of disclosure and due diligence will usually be determined by the transaction’s size and the relevant industry.

What information can and cannot be disclosed when dealing with a public company?

When dealing with a public company, no insider information may be disclosed to a potential buyer. Insider information is information of a precise nature which:

  • has not been made public;
  • relates directly or indirectly to one or more issuer or financial instrument; and
  • would, if made public, likely have a significant effect on the prices of those financial instruments or the price of related derivative financial instruments.

Stakebuilding

How is stakebuilding regulated?

Stakebuilding is governed for companies which have a corporate seat in Austria and are listed on a regulated market. Section 91 of the Stock Exchange Act determines that if persons directly or indirectly acquire or sell shares in a company listed on a regulated market, they must inform the Austrian Financial Market Authority, the exchange operating company and the issuer immediately (at most, within two trading days) if, as a consequence, their share in voting rights reaches, exceeds or falls below:

  • 4%;
  • 5%;
  • 10%;
  • 15%;
  • 20%;
  • 25%;
  • 30%;
  • 35%;
  • 40%;
  • 45%;
  • 50%;
  • 75%; or
  • 90%.

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