POSITION OF THE HOLDERS OF NON-VOTING SHARES IN CORPORATE TAKEOVERS � A COMPARISON OF CROATIAN AND EU LAW

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In the article the author analyses the position of shareholders who hold non-voting shares of the offeree company in the takeover process. By using the comparative method, the author emphasises the solutions adopted in the European and Croatian Law. According to the Takeover Bids Directive, as well as the Croatian Takeover Act, a mandatory takeover bid has to be published for the acquisition of the shares carrying voting rights in the company. By adopting this solution, the shareholders of non-voting shares are not protected when someone acquires the controlling block of shares. However, since the Takeover Bids Directive is a minimum harmonization directive, national legislators could prescribe stricter offeror obligations. The Croatian legislator adopted the provision according to which the takeover bid may also be made to acquire non-voting shares. However, it has to be emphasised that the decision to cover non-voting shares by the takeover bid is in the offeror’s hands. Furthermore, if the offeror chooses to cover also the non-voting shares, the question arises what the bid price for non-voting shares would be. According to the solutions adopted in the European and Croatian law, the offeror is obliged to offer equal price for all the shares of the same class. This opens the question whether the offeror is allowed to offer a lower price for non-voting shares. Another open issue is the protection of holders of non-voting shares of the offeree company in squeeze-out and sell-out procedures. In line with the adopted provisions in the European, as well as in the Croatian law, if non-voting shares were not included in the takeover bid, the squeeze-out and the sell-out right could not be applied. Also, it is important to emphasise the influence of the application on the breakthrough rule on non-voting shares. Since the Croatian Companies Act allows only non-voting preference shares which in certain circumstances may be eligible to vote at the general meeting, the author investigates the consequences of the adopted provisions and looks for appropriate solutions de lege ferenda.