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March-April
2009
Estonia, Latvia, Lithuania, Finland, Sweden |
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RoschierRaidla News
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Inside this Issue:
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Estonia |
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Latvia |
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Lithuania |
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Estonia
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Employment Contracts Act Adopted |
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On 17 December 2008, the Estonian Parliament (Riigikogu)
adopted the Employment Contracts Act, whose aim is to make the
regulation of employment relations more modern and flexible. A key
change is that the provisions of the Law of Obligations Act now
shall be applicable to employment relations. An employment contract
is deemed an authorization agreement unless otherwise provided by
law.
The scope of the act has been expanded considerably. In addition to
the creation, amendment and termination of employment contracts, the
new act also regulates working and rest time, holidays, wages and
proprietary liability. The latter provisions had been found in other
laws. The new act also brings sweeping changes to the provisions
concerning the rights, obligations and liability of both employers
and employees. The law specifies the conditions that must be
included in written employment contract documents. Moreover,
provisions relating to restraint of trade clauses and the
confidentiality clauses are now more nuanced. Under the new rules a
contractual penalty agreement can be concluded in order to ensure
compliance with these obligations. The bases and procedure for
cancellation of the employment contract by the employer are also
changed.
The changes give employers more flexibility in rearranging
employment relations and maintaining their competitiveness by doing
so. In order to achieve this goal the deadlines for giving notice
and the amounts payable by the employers as compensation upon
cancellation have been reduced. In certain exceptional cases the law
allows the employers reduce the employees’ wages temporarily during
employment. To make up for the reduction of compensation, insurance
benefits payable by the Unemployment Insurance Fund have been
increased. Under the new provisions employers must focus more on
training their employees. The law also reduces the number of
documents employers must keep by reason of their contractual
relationship with employees.
The new act shall enter into force on 1 July 2009, except for the
provisions that have state budgetary implications. These shall enter
into force on 1 January 2010. The current Republic of Estonia
Employment Contracts Act which was first adopted in 1992 is
repealed.
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Other Recent Legislative Developments |
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Act on Transfer of Land on which Usufruct is Established into
Ownership
On 25 February 2009, the Riigikogu adopted the Act on
Transfer of Land into Ownership on which Usufruct was Established in
the Course of Land Reform. The aim of this act is to create a
mechanism for ensuring the use of agricultural land for its
designated purpose. This act regulates the conditions and procedure
for the acquisition of land on which usufruct had been established
on the basis of the Land Reform Act and prescribes the criteria to
be met by persons for whose benefit usufruct was established and who
wish to acquire land subject to usufruct. The new act entered into
force on 28 March 2009.
New Civil Code Provisions to Restrict consumer Loans
On 25 February 2009, the Riigikogu adopted the Act Amending
the General Part of the Civil Code Act and the Law of Obligations
Act. The amendments establish a limit to interest that can be
charged on consumer loans (the so-called SMS loans). If the interest
rate on a consumer loan (the annual percentage charged) exceeds the
average percentage rate of charge of consumer loans as quoted by the
Bank of Estonia by more than three times the amendments deem there
is an imbalance in the value of the reciprocal obligations of the
parties in contradiction with good morals and therefore the
agreement is void. If a transaction is void by reason of including
an obligation to pay interest in contradiction with good morals the
loan must be repaid by the due date agreed in the contract and the
interest is limited to the amount set forth in the Law of
Obligations Act. The amendments also define the provisions
regulating package tour contracts in greater detail. The amendments
shall enter into force on 1 May 2009.
Immovables Expropriation Act and Income Tax Act Amended
On 26 February 2009, the Riigikogu adopted the Act Amending
the Income Tax Act and the Immovables Expropriation Act. The
amendments elaborate provisions concerning expropriation in order to
motivate the owners of immovables to enter into agreements with the
state or local government for transferring immovables by the release
of the owners from the obligation to pay income tax. As a result,
there should to be fewer cases of expropriation proceedings due to
the fact that the owner refuses to give his or her consent to the
transfer. Other amendments in the Income Tax Act set out in greater
detail provisions concerning exempt compensation for official travel
expenses and expenses related to the use of a personal automobile
paid to a public servant, an employee or a member of the management
or controlling body of a legal person. The relevant exempt limit
rates are now transferred from secondary legislation established by
the Government regulation to law. The amendments shall enter into
force on 1 July 2009.
Possibilities for Electronic Voting Improved
On 11 December 2008, the Riigikogu adopted the Act Amending
the European Parliament Election Act, the Local Government Council
Election Act, the Referendum Act and the Riigikogu Election
Act. Electronic voting was introduced in 2005 in Estonia, by
granting the owners of an ID card the possibility to cast their
votes electronically. Under the new amendments the period of
electronic voting is extended. From 1 January 2011 it will be
possible to use mobile phones along with ID cards for electronic
voting. When using a mobile phone the voter can certify his or her
identity via a certificate enabling digital identification. The
amendments entered into force on 16 January 2009.
Forest Act Amended
On 10 December 2008, the Riigikogu adopted the Act Amending
the Forest Act and Associated Acts. The amendments introduce broad
changes to the Forest Act. First, a new forestry development plan
now must be approved by the Riigikogu. In addition, the
provisions pertaining to forest categories and objectives of forest
management are repealed and forest management plans cease to be
mandatory. As a new development, the forest management rules aimed
at protecting the environmental condition of forests are included in
the law. Provisions related to cutting and forest notification, as
well as those regulating the management of state forests are changed
considerably. The amendments entered into force on 1 January 2009.
Legal Protection of Industrial Property Strengthened
On 17 December 2008, the Riigikogu adopted the Act Amending
the Acts Regulating the Legal Protection of Industrial Property and
Associated Acts. The amendments mainly pertain to the Patents Act,
Trademarks Act, and the Principles of Legal Regulation of Industrial
Property Act. The amendments introduce provisions concerning the
secrecy of patent applications and the non-commercial use of a
patented invention by the state. The secrecy provisions enable
applicants to keep confidential patent applications for inventions
related to national defence (inventions serving significant national
defence interests). The provisions for non-commercial use of a
patented invention by the state lay down the framework regulation
for such use. The amendments also specify in more detail several
terms (invention, patent claim etc). The amendments entered into
force on 1 March 2009.
Fertilizers Act and Plant Protection Act Specified
On 6 November 2008, the Riigikogu adopted the Act Amending
the Fertilizers Act, the Plant Protection Act and the State Fees
Act. The amendments consolidate terminology used in the acts, bring
the acts in line with EU law and improve the supervision over the
handling of fertilizers. The provisions concerning registration of
fertilizers are simplified. The obligation to register fertilizers
with the label “EC Fertilizer” is replaced by the obligation to
notify the supervisory agency of the commencement of handling such
fertilizers. The conditions and procedure for importing fertilizers
and plant protection products into Estonia and their use in Estonia
also undergo changes. The act entered into force on 1 January 2009,
with some provisions entering into force on 1 June 2009.
Postal Act Amended
On 4 December 2008, the Riigikogu adopted the Postal Act
Amendment Act, resulting in a more precise definition of postal
services, the types of postal items and postal services, and
requirements related to universal postal services and the providers
thereof. The rules relating to the licensing of postal services
providers are changed and requirements for using the postal network
are established. Conditions are established for charges providers of
postal services may assess. Under the new provisions a public
competition shall be organized for appointing the provider of
universal postal services; and the conditions of the competition are
set out in the amendments. The changes entered into force on 1
January 2009.
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| For further information please contact
Raino Paron
(CV),
Partner at Raidla Lejins &
Norcous in Tallinn. |
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Latvia
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Deposit Guarantees Law Amended |
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On 12 February 2010, the Latvian
Parliament (Saeima) amended
the Deposit Guarantees Law extended
the scope of events when depositors
are entitled to compensations from
deposit guarantee fund, simplifying
the deposit guarantee entitlement
and payment formalities and
substantially reducing the period
within the compensations are paid to
depositors. The Amendments entered
in force on 19 February 2009.
The amendments have expanded the
definition of deposit
unavailability, which is the legal
basis for payments from the Latvian
deposit guarantee fund. Prior to the
amendments the compensations were
available only if the credit
institution’s license was revoked
and it was placed in involuntary
liquidation or if its bankruptcy
proceedings were commenced, thus
excluding insolvent credit
institutions placed in
rehabilitation. Pursuant to the
amendments, the compensations will
now be available if the credit
institution has been declared
insolvent, or if its license has
been revoked, or if the Latvian
banking market regulator – the
Finance and Capital Markets
Commission (the “FCMC”) has
determined the credit institution is
not able to pay out the deposits for
any other reason and has therefore
taken a decision to declare a
deposit unavailability event. Thus,
pursuant to the amendments to the
Deposit Guarantees Law, the
guaranteed deposit compensations
will be available to depositors also
in cases when credit institution is
placed in rehabilitation, or,
subject to a separate decision of
FCMC – if the credit institution is
facing liquidity problems.
The amendments have abolished the
depositors’ obligation to file a
depositor’s claims as a condition
for entitlement to the deposit
guarantee compensations. According
to the amended Deposit Guarantee
Law, all depositors that were
recorded in the books of the credit
institution on the date when deposit
unavailability occurred are entitled
to compensation, and they do not
need make any application or file
any documents in order to prove or
establish their entitlement to the
deposit guarantee compensation. The
deposit guarantee compensations are
paid out based on the list of
depositors prepared by the credit
institution and submitted to FCMC on
the next day after the occurance of
the deposit unavailability event.
The deposit guarantee compensation
payment term has been substantially
shortened. Thus, the prior 3 months
term has been decreased to just 20
days after the occurrence of the
deposit unavailability event, and
the former right of FCMC to extend
the term by up to additional three
months has been reduced to a
one-time additional 10 days. Thus,
the maxim period within which the
depositors should now be able to
receive compensations for their
guaranteed deposits should not
exceed 30 days as of the date of
occurrence of the deposit
unavailability event.
In case the funds in the deposit
guarantee fund are not sufficient to
pay out all compensations that are
due, the Ministry of Finance of
Latvia has an obligation to grant a
loan to the fund so that all
compensations can be paid out within
the above 30 day period.
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Amendments to the Credit Institution Law |
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In February 2009, the Saeima
has twice amended the Law on Credit
Institutions, introducing new
regulation for transfers of credit
institution business, operational
restrictions that may be applied to
credit institutions and special
provisions concerning increase of
credit institution capital in
circumvention of shareholder
pre-emptive rights.
The regulations on credit
institution business transfer will
apply to all transactions that
include transfer of title or rights
of use of credit institution
business or any part thereof,
including transfers of credit
institution branches, divisible set
of aggregate of properties, assets
or obligations, or standard form
contracts entered into by the credit
institution. As a general rule,
transfers of credit institution
businesses will be subject to FCMC’s
prior consent and expert valuation
of the assets and liabilities that
are being transferred. The transfers
of credit institution businesses in
respect of which FCMC’s consent has
not been requested or received will
be deemed null and void ex legis.
Once FCMC has consented to the
transfer of credit institution
business, no other creditor or third
party consents would be required for
the transfer of the business.
Specific provision has been added to
the Credit Institution Law to enable
credit institutions to issue new
shares in circumvention of the
pre-emptive rights of other existing
shareholders of the credit
institution. Thus, in cases when the
Cabinet of Ministers (the
Government) upon the request of the
credit institution’s board has taken
a decision to obtain or increase its
substantial participation in the
credit institution, the credit
institution’s supervisory council
becomes entitled to issue new shares
on behalf of the shareholders
meeting of the credit institution
but without convening the
shareholders meeting. The law
explicitly provides that the
existing shareholders do not have
preemptive rights to these shares.
This provision is seriously flawed,
as it neither specifies the
circumstances in which it may be
invoked, nor the purposes in respect
of which it may be invoked.
Similarly, neither under the Latvian
credit institution laws, nor under
the Latvian corporate law the board
of a credit institution has been
vested with an express right to
request the Government to invest in
a credit institution to a detriment
of the rights of other shareholders
without their vote on it. It should
be noted that this provision is not
part of the Latvia’s credit
institution bail-out legislation and
is not legally related to that
legislation. It is likely that
absent very limited and specific
circumstances the supervisory
council exercising its share issuing
powers under this provision may
incur a liability to the
shareholders of the credit
institution for breach of both the
duty of care and duty of loyalty.
The Credit Institution Law has been
supplemented by a set of new
provisions on the rights of FCMC to
impose restrictions on credit
institution’s operations or
obligations. These provisions may be
invoked if FCMC establishes that the
credit institution is in breach of
law, or its operations are
threatening its stability or
solvency, or safety or stability of
the Latvian banking sector, or if
there is a risk of substantial loss
to Latvian economy, as well as in
cases of excessive out-flow of
deposits or other funds. The
measures that may be imposed by FCMC
include issuing of orders binding to
the credit institution management,
imposing of restrictions on rights
and activities of the credit
institution, including the right to
suspend fully or in part the
provision of financial services,
restricting the performance of the
bank’s obligations to depositors,
appointing the FCMC’s supervisor
with administrative or executive
powers.
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| For further information please contact
Dace Silava-Tomsone
(CV),
Partner at Raidla Lejins
& Norcous in Riga. |
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Lithuania
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Regulation on the List of Market Abuse
Forms and Procedure of Notification of Possible Market Abuse |
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On 11 February 2009, the Securities
Commission of the Republic of Lithuania
adopted a Decision on Approval of the
Regulation on the List of Market Abuse
Forms and Procedure of Notification of
Possible Market Abuse to the Securities
Commission (the “Regulation”).
The purpose of the Regulation is to
implement Directive 2003/6/EC of the
European Parliament and of the Council
of 28 January 2003 on insider dealing
and market manipulation (market abuse),
Commission Directive 2003/124/EC of 22
December 2003 implementing Directive
2003/6/EC of the European Parliament and
of the Council as regards the definition
and public disclosure of inside
information and the definition of market
manipulation, Commission Directive
2004/72/EC of 29 April 2004 implementing
Directive 2003/6/EC of the European
Parliament and of the Council as regards
accepted market practices, the
definition of inside information in
relation to derivatives on commodities,
the drawing up of lists of insiders, the
notification of managers’ transactions
and the notification of suspicious
transactions. Additionally, the
Regulation was prepared in accordance
with the recommendations of the
Committee of European Securities
Regulators regarding implementation of
the Directive 2003/6/EC of the European
Parliament and of the Council of 28
January 2003 on insider dealing and
market manipulation (market abuse).
The Regulation defines a non-exhaustive
list of forms of market manipulation, a
non-exhaustive list of forms of usage of
the inside information, and the
procedure of notification of possible
market abuse. The Regulation also
provides a standard form of the notice
and means of notification (mail, e-mail,
fax or telephone). The notice has to
contain grounds of suspicion, data of
contract or commission and other
necessary information. Rules, stipulated
in this Regulation are applied to the
regulated market operators, finance
broker enterprises and credit
institutions.
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Draft Amendments to the Law on
Restructuring of Enterprises |
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Rough economical situation,
increased unemployment rate,
necessity to ensure the
continuity of activities of
the Lithuanian enterprises
in the complicated
economical environment,
protection of employees’
interests and the fact that
credit institutions
tightened the conditions for
business credits prompt for
the need to amend the
current Law on Restructuring
of Enterprises (the “Law on
Restructuring of
Enterprises”). As of 17
March 2009, draft amendments
to the Law on Restructuring
of Enterprises (the “Draft
Amendments to the Law on
Restructuring of
Enterprises”) were proposed.
The purpose of the said
amendments is to enhance the
existing conditions for the
enterprise restructuring
proceedings.
Provisions of the actual Law
on Restructuring of
Enterprises are more
favorable to major creditors
of the enterprise at issue.
As a matter of fact, claims
of these major creditors are
usually secured by the
mortgage and (or) pledge of
the assets of the enterprise
under restructuring.
Pursuant to the Law on
Restructuring of
Enterprises, major creditors
have the decisive role with
regard to the initiation of
the enterprise restructuring
proceedings in court, as
well as, the adoption of the
enterprise restructuring
plan. Whereas smaller
creditors or creditors whose
claims are not secured by
mortgage, pledge, guarantee,
or suretyship, are not
granted any substantive
rights to protect their
interests if the enterprise
at issue (i.e. debtor)
becomes subject to the
restructuring proceedings.
Thus, the Draft Amendments
to the Law on Restructuring
of Enterprises aims at
granting the courts more
powers while deciding on the
issues of initiation of the
enterprise restructuring
proceedings and the adoption
of the enterprise
restructuring plan. After
taking all aspects of the
case into account, the
courts would be enabled to
pass a ruling on the
initiation of the
restructuring proceedings
and the adoption of
restructuring plan even in
the absence of formal
acquiescence of the meeting
of creditors.
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Draft Law on Bankruptcy of Natural Persons |
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On 24 March 2009, Draft Law on
Bankruptcy of Natural Persons of the
Republic of Lithuania (the “Draft Law”)
was introduced and according to the
Government’s program should be adopted
at the end of 2009. Up till now, only
legal persons can bankrupt in Lithuania,
while individuals performing business
activities are obliged to pay their
debts till their decease. The Draft Law
introduces a new institute in Lithuanian
legal system and aims at protecting an
insolvent natural person from
impoverishment, as well as, to restore
his ability to pay.
A number of natural persons perform
business activities, for instance
according to a business license. These
natural persons are basically performing
the same business activities as legal
persons and the only difference is the
form of the performance. From the
competition perspective, natural persons
undertaking business activities are in
less favorable position than legal
persons in Lithuania or natural persons
of the other countries, where bankruptcy
of natural persons is legitimate. Once
bankruptcy of natural persons is
validated, such individuals could expect
that their debts might be discarded in
the future and thus they could perform
business activities legitimately or at
least recover part of their debts.
The Draft Law suggests a regulation of
bankruptcy proceeding of natural
persons. If the Law on Bankruptcy of
Natural Persons is adopted, individuals
will have an opportunity to bankrupt or
partly settle with their creditors.
Bankruptcy proceedings could be
initiated only on the grounds of natural
person’s statement and only if natural
individual at stake could not fulfill
claim (claims) of the creditor
(creditors) the total value of which
exceeded 12 minimum monthly wages
(current minimum monthly wage in
Lithuania is LTL 800 (approx. EUR 230)).
After launching bankruptcy proceedings,
solvency restoration plan and schedules
for fulfilling the claim (claims) of
creditor (creditors) and settling other
expenses would be prepared. Most of
claims of the creditor (creditors) that
remain unfulfilled after the natural
persons’ assets have been sold, would be
discarded and could be recovered
according to the laws in force during 3
years period after the bankruptcy
proceedings were closed.
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further information please contact
Irmantas Norkus, (CV),
Managing Partner at Raidla Lejins & Norcous in Vilnius. |
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Finland
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Can Derivative Arrangements
Trigger a Mandatory Offer or
Flagging Obligation? |
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The increased use of derivative arrangements has both internationally and in
Finland resulted in an active discussion on (i) whether derivative arrangements
could be considered to trigger an obligation to launch a mandatory public tender
offer and (ii) whether derivative arrangements should be subject to a flagging
obligation.
An
obligation to launch a mandatory public tender offer for the remaining shares
and other securities entitling to such shares in a Finnish listed company is,
under the Finnish Securities Market Act (the “SMA”), triggered when a
shareholder’s holding in such company exceeds 30 or 50 per cent of the voting
rights in such company. The shareholder’s proportion of the voting rights is
held to include, inter alia, shares held by any other parties that act in
concert with the shareholder to exercise control in the company. However, both
the SMA and the standards issued by the Finnish Financial Supervisory Authority
(the “FFSA”) remain silent on whether the obligation to launch a mandatory
public tender offer could be triggered by derivative arrangements.
The FFSA has recently concluded, based on the results of its request for
comments on this matter, that the SMA’s provisions do not allow for an
interpretation according to which the obligation to launch a mandatory public
tender offer would always arise based on derivative arrangements. However,
entering into a derivative arrangement (whether physically or cash settled) may
under the SMA qualify as acting in concert and trigger the obligation to launch
a mandatory public tender offer if the arrangement, de facto, provides for
exercise of control in the company based on the underlying shares. The
obligation to launch a mandatory public tender offer based on derivatives will,
however, need to be assessed on a case-by-case basis and therefore the FFSA
advises market participants to consult the FFSA before entering into derivative
arrangements where the underlying shares would represent more than 30 per cent
of the votes in a listed company.
As to the flagging obligation related to derivatives, physically settled
derivative arrangements are always subject to the flagging obligation under the
SMA whereas cash settled derivative arrangements will only need to be flagged
where such arrangements de facto result in a possibility to exercise control
based on the underlying shares.
The FFSA has requested from the Finnish Ministry of Finance that an assessment
of the need for more detailed regulation on derivative arrangements both in
respect of mandatory public tender offers and the flagging obligation be made in
connection with the upcoming total reform of the SMA.
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For further information please contact
Dimitrios Himonas
(CV),
Partner at Roschier in Helsinki. |
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Sweden
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Proposal for New
Takeover Rules in
Sweden |
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On 16 March
2009, the
Swedish Industry
and Commerce
Stock Exchange
Committee (Sw.
Näringslivets
Börskommitté)
(“NBK”)
published a
proposal for new
rules for public
takeover bids
for regulated
markets (NASDAQ
OMX Stockholm
and Nordic
Growth Market),
containing
significant
amendments to
the present
takeover rules.
The main part of
these changes
constitute
codifications of
the “good stock
market practice”
developed by the
Securities
Council (Sw.
Aktiemarknadsnämnden)
during the last
years, but the
proposal also
includes new
rules regarding
price
differences
between shares
of different
classes, an
issue which has
been the cause
of some debate
during the last
few years. The
new rules are
proposed to
enter into force
1 September
2009. Below,
some of the
major proposed
changes are
accounted for.
New rules
regarding price
differences
between shares
of different
classes
According to the
proposal, it
will no longer
be allowed to
make a
difference in
the price paid
in a takeover
offer for shares
of different
classes, if the
difference
between share
categories is
purely due to
their voting
entitlements and
only one class
of share is
listed for
trading on the
stock exchange,
a situation that
is rather common
in Swedish
companies. The
different
classes of
shares are often
referred to as
Class A and
Class B shares,
Class A being a
class of shares
not listed for
trading on the
stock exchange,
conferring a
higher number of
voting rights
per share upon
its holder than
the “regular”
stock exchange
listed Class B
shares.
Previously, a
ten or possibly
up to 12 per
cent higher
offer price for
such Class A
shares has been
generally
regarded as
consistent with
good stock
market practice.
Furthermore, the
proposal
provides that
the bidder, if
shares of both
classes are
listed for
trading on the
stock exchange
and the stock
exchange price
for Class A and
Class B shares
differs, may
request
permission from
the Securities
Council to offer
different prices
for the
different share
classes. The
Securities
Council may only
grant such a
request if
liquidity in the
classes of
shares concerned
is sufficient to
provide an
indication of a
fair price, the
price difference
is not merely
temporary, and
it is not merely
due to demand on
the part of one
buyer or a
limited number
of buyers.
The proposed new
rules also
provide that the
Securities
Council may, in
very exceptional
circumstances,
permit making a
difference in
the price paid
in a takeover
offer for shares
of different
classes if the
Securities
Council
considers that
this would be in
the interest of
all shareholders
and that this
would not harm
confidence in
the regulatory
system.
The issue of
price
differences has
been heavily
debated in
Sweden and one
member of the
NBK board made a
reservation
against this
part of the
proposal. A
number of
institutional
investors have
challenged the
current regime
and strongly
promoted an
abolishment of
price
differences
between shares
that hold the
same economic
rights in the
company. Large
financial
investors have
defended the
current practice
and argue that
the proposal
potentially
could have a
detrimental
effect on the
Swedish system
of Class A and
Class B shares
and potentially
prevent
structural
business
transformation
and stock
exchange
listings of
growth
companies.
It can be noted
that the
proposal allows
for price
differences in
relation to
different share
classes, if the
difference
relates to the
shares’ economic
rights in the
company,
provided that
the difference
is reasonable.
This may
potentially
imply an
increasing use
of preference
shares
(conferring e.g.
a preference
right in the
event of
liquidation) in
Swedish
companies listed
on stock
exchanges.
“Pre-announcements”
The proposed new
rules make it
clear that
“pre-announcements”
are not in
compliance with
the rules or the
principles on
which they are
based, other
than for the
purpose of
rectifying or
confirming
rumors or
leakages.
Offer withdrawal
The proposal
involves
additional
stringency in
respect of the
existing rules
according to
which bidders
are bound by
their offers and
the
possibilities to
withdraw from an
offer. For
example, it is
clearly stated
in the proposal
that it is
normally not
permissible to
withdraw an
offer on the
grounds that the
target company
Board has
recommended that
share-holders
should not
accept the bid.
Transactions
outside the
offer
According to the
current rules,
if a bidder
acquires more
than 10 per cent
of all the
shares in the
target company
for cash payment
within six
months prior to
submission of a
bid, or during
the period
covered by the
bid but outside
the offer,
shareholders
covered by the
bid are also
entitled to cash
payment.
According to the
proposal, this
should also
apply to prior
and parallel
transactions in
shares and other
securities. For
example if the
bidder acquires
more than 10 per
cent of the
shares in the
target company
in a prior or
parallel
transaction as a
result of a
non-cash issue,
other
shareholders in
the target
company are to
have the same
opportunity to
receive share
compensation.
Target company
Board statement
The Board of the
target company
must make public
its opinion of
the bid. The
proposed new
rules stipulate
that this
statement is to
be made no later
than two weeks
prior to expiry
of the
acceptance
period.
Furthermore, the
proposal
clarifies that
the Board in its
statement must
evaluate and
make public an
opinion not only
regarding the
total amount
that the bidder
is offering to
pay for the
company but
also, in
particular, on
the price and
other terms
offered by the
bidder for each
share or, where
applicable, for
each class of
share.
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| For further information please contact
Axel Calissendorff
(CV),
Partner at Roschier
in Stockholm. |
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| This Newsletter is a
periodic publication of RoschierRaidla and
should not be construed as legal advice or legal opinion on any specific
facts or circumstances. We have used reasonable efforts in collecting,
preparing and providing the information in this newsletter, but we do
not warrant or guarantee the accuracy, completeness, adequacy or
currency of the information contained herein. The contents are for
general informational purposes only, and you are urged to consult a
lawyer concerning your situation and any specific legal questions you
might have. |
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