Shares of joint stock company Bosnia

Advokatski ured Huskic - popunjavanje bjanko mjenice

A physical person or a legal entity that acquires Issuer’s shares and thereby, together with the shares already in its possession, reaches possession of more than 30% of voting shares in a joint stock company, must require approval of takeover tender from the Securities Commission, which tender shall be launched under the conditions and following the procedure provided by the Law on Joint Stock Companies Takeover.

The person or entity that acquired shares in the privatization procedure shall be exempt of this liability. However, in the event that such person intends to further acquire shares of the same issuer, then he is obliged to launch a takeover tender under the same conditions as applied to the above described case.

A person or entity that acquires a total of 2/3 of all voting shares in a company by tender is authorized to freely purchase the remaining shares on the market. A person that acquires less than 2/3 of voting shares (together with shares previously possessed) upon takeover tender, shall be obligated to launch a new takeover tender in the event that it intends to continue acquiring shares of the same issuer. Only after this repeated tender such person or entity would be authorized to freely purchase shares, even if it has not reached 2/3 of total company shares during the tender, and have no liability of launching further offers.

The Law provides that the party offering to buy shares must inform the FBiH Securities Commission on any and all cases when it is bound to launch a takeover offer. Considering that it is a legal obligation to announce launching of the tender, the party offering does not have an obligation to acquire prior consent from the Assembly, management or the issuer, for the implementation of the launching of the tender for the reasons of the takeover of the company.  The party offering is obliged to inform the issuer on takeover of the company, only upon acquiring of the consent on implementation of launching of the  tender, from the FBiH Securities Commission.

Exemption from the Obligation of the Announcement of the Launching of Tender

There are exemptions from the obligation of the announcement of the launching of tender, which means that the entity that acquires is not obliged to announce the offer for the taking over of the company, in case that:

a) it acquires shares of the issuer which has 40 or less than 40 of shareholders or;

b) the shares of the issuer are transmitted between the legal entities which are consisted from the same shareholders or are transferred for the reasons of restructuring within the subsidiary companies or similar.

Regardless to the above mentioned exemptions, the entity that acquires, can announce the launching of the tender, in case that he wishes to do so.

Activities Preceding Submission of the Request to the FBiH Securities Commission

Before submitting the request for approval of takeover tender, the offering party must undertake the following:

1. The offering party must execute an agreement with a bank regulating the payment of securities purchased in the offer. This agreement shall ensure that the assets are paid into a special depositary bank account, or providing of a credit for this purpose, an irrevocable bank guarantee of first call, or guarantee of another legal entity accepted by the depositary, in favor of shareholders whose shares shall be kept in the special records and for the amount required for payment of all shares comprised in the takeover tender. Tender offer relates to purchase of all shares, which means it cannot relate to purchase of only certain number of shares of the issuer.

The offering party is not authorized to dispose of the funds separated to a special account for payment of shares comprised in the special records, for any purpose other than payment of these shares.

2. Prior to submitting the request for approval of the takeover tender, the offering party, in order to accept the takeover tender at the FBiH Securities Register, must provide for special records in the manner provided in a Register by-law. These records are made by a professional broker.

The Securities Register must keep the securities object of the response to the tender, in these special records so that at any moment prior to termination of the tender, the offering party must the know the owner of each and every security kept in these special records.

Huskic Law Office – Advokatski ured Huskić

March 2014