Technique: The Obligation to Make a Takeover Bid Does Not Worry Anyone Too Much

After three years, one would think that the saga of the announcement of the takeover bid for Tehnika, which Hanfa had ordered from Luxury Real Estate and its director Zvonimir Zlopaša, as well as Boran Poljančić and the CEO of Tehnika Bojan Horvačić, has finally come to an end. However, we do not yet know that.

Namely, all three together with Luxury Real Estate hold about 34.87 percent of the shareholding, so back in 2019, according to Hanfa’s decision, when they crossed the threshold of 25 percent, the obligation arose for them to send a takeover bid to the other shareholders of Tehnika.

However, the three of them complained, claiming that none of them individually holds 25 percent of the shares and that they do not act together in acquiring shares of Tehnika. Hanfa, on the other hand, states that the flow of money related to the purchase of Tehnika shares is visible, meaning that the purchase of shares by individual shareholders was financed by Luxury Real Estate. They refer to Article 6, paragraph 3 of the Takeover of Joint Stock Companies Act (ZPDD).

It stipulates that ‘when the obligation to publish a takeover bid arises from the establishment of a joint action relationship by the agreement referred to in Article 5, paragraph 1 of this ZPDD, or in the case when one of the persons acting jointly acquires shares in such a way that this acquisition creates an obligation to publish a takeover bid, each of those persons is obliged to publish a takeover bid in the manner and under the conditions specified by this Law, and it is considered that the obligation to publish a takeover bid has been fulfilled if any of the persons acting jointly publishes the takeover bid.

This means, Hanfa explains, that a takeover bid can also be published by one of the individuals (Zlopaša, Horvačić, Poljančić), in which case it will be considered that the obligation has been fulfilled for all of them.

These arguments were accepted by the Administrative Court in Zagreb, and then by the High Administrative Court on April 1 of this year. Last week, Hanfa, based on the final judgment, issued a new decision that all three, as well as the company Luxury Real Estate, are obliged to send a binding takeover bid to the other shareholders of Tehnika within the next 30 days (by the end of October).

Only lawyer Poljančić responded to our inquiry, stating that he cannot comment while the proceedings are ongoing. However, what will really happen if they do not send a takeover bid is a question that arises because, according to Hanfa’s response, the mentioned trio and the company do not seem to face any sanctions.

However, Hanfa states that ‘the Law on the Takeover of Joint Stock Companies contains provisions that allow Hanfa, if the bidder does not act in accordance with the decision, to impose a new or the same measure, as well as possible monetary fines, but it is too early to talk about further steps.’ Especially since the Commercial Court in Zagreb opened pre-bankruptcy proceedings against Luxury Real Estate on August 30 of this year, just over a month ago. However, Hanfa emphasizes that despite everything, the other shareholders of Tehnika can sue Luxury Real Estate, as well as Zlopaša, Horvačić, and Poljančić to recover damages from them for not sending a takeover bid, which seems to be a more likely sanction for the mentioned trio. Namely, as stated in Hanfa, according to Article 49, paragraph 1 of the ZPDD, shareholders can demand the mandatory conclusion of a contract for the sale of shares, under the conditions under which a takeover bid should have been published, from any of the persons for whom the obligation to publish a takeover bid has been established. Whether this will happen remains to be seen.