Preventive Anti-Takeover Defences in Polish Law

Abstract

This paper discusses preventive anti-takeover defences available to public companies in Polish law. It is limited to the methods applied in practice in the Polish capital market, such as the voting cap, or methods potentially applicable to typical situations. Anti-takeover defences that could be effectively used only in exceptional, special situations are not taken into account. The closed corporate governance model prevailing in the Polish capital market is a consequence of a control exercised over Polish public companies by strategic investors. Nonetheless the gradual decrease of involvement by strategic investors, typically company founders, in their businesses and their decision to sell the shares off to financial investors resulted in attempts at hostile takeovers being of a more practical nature. The main claim of this article is that, although Polish law does not allow for the construction of typical poison pills based on American solutions, Polish Code of Commercial Companies and Partnerships – as interpreted in legal literature – remains highly permissive when it comes to the application of various methods aimed at preventing any takeovers of control. The admissibility of defence mechanisms as used by Polish companies requires an extended discussion, which this paper forms a part of, and, potentially, legislator’s systemic interference.