Topic Company takeovers Company Takeovers and Delisting
Three different procedures apply to takeover bids for listed companies. The Securities Supervision Directorate of BaFin has been monitoring these since 2002. In principle, its supervision covers domestic companies that are listed on a stock exchange in Germany.
Since 2002, BaFin's Securities Supervision Directorate has been responsible for monitoring takeovers of companies whose shares are admitted to trading on a regulated market. In principle, its supervisory tasks extend to all domestic companies that are listed on a stock exchange in Germany. There are three offer/bid procedures: ordinary acquisition offers, takeover bids and mandatory offers. "Delisting offers", which are a particular type of ordinary acquisition offer, have also existed since 26 November 2015.
In the case of ordinary acquisition offers, offerors either want to buy shares without acquiring control of the company or want to increase the controlling position they already hold. No minimum price is prescribed for this; partial offers are also permitted. Control is the holding of at least 30 % of the voting rights in the target company.
A delisting offer is made when an issuer seeks to revoke the admission to trading of their shares on a regulated market. Pursuant to section 39 of the German Stock Exchange Act (Börsengesetz – BörsG), an offer document in accordance with the provisions of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz – WpÜG) must be published and the offeror must make an offer to the shareholders. The offeror cannot place conditions on the offer and must offer a sum of money in euros as a consideration. The minimum price is based on the volume-weighted average price over the previous six months and the price paid by the offeror to any previous purchasers.
A combination of a delisting offer and a takeover bid is possible.
In the case of takeover bids, offerors want to buy enough shares in the target company that they reach or exceed the control threshold. They can make their bids conditional upon them achieving a percentage which is sufficient for them to declare the bid successful, but must offer minimum prices based on the volume-weighted average price over the previous three months and the price paid to any previous purchasers.
Mandatory offers must be made by offerors to all other shareholders when they acquire control of the company for the first time. Minimum price rules apply in these cases, too.
Procedure pursuant to the WpÜG
BaFin's Securities Supervision Directorate monitors the takeover and delisting procedures. It checks that the offer documents are complete and do not contain obvious infringements of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs und Übernahmegesetz – WpÜG). It may prohibit a bid if necessary. It also decides on applications for exemptions.
BaFin is supported in its activities by an Advisory Council, which is made up of representatives from business, politics and science and advises BaFin on issues regarding takeover legislation. An Objections Committee, also based at BaFin, rules on objections to particularly significant supervisory decisions relating to takeover legislation.
The WpÜG also lays down the obligations which must be fulfilled by offerors, how BaFin monitors the procedures and which information BaFin is required to publish.