Changes in the Act on the offer are coming – end of calls after exceeding 33%

On 8 April, an amendment to the Act on mortgage bonds and mortgage banks, as well as some other acts, was submitted to the President for signature. It mainly provides for numerous changes regarding mortgage bonds, but also modifies the provisions of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading System and Public Companies – above all, the thresholds for calls are changed. The new regulation assumes the replacement of the existing two thresholds, the exceeding of which makes it necessary to call for registration for sale or conversion of shares, with one threshold equal to 50% of the number of votes at the general meeting of the company.

What is the change in the Tender Act regarding the call thresholds? 

A call is a proposal to buy back the shares of the company being called, addressed by the calling party to the shareholders of that company. Currently, according to the law, an entity that has acquired shares in a company admitted to public trading and thus exceeded the threshold of 33% of the number of votes at the general meeting of the company, is obliged to announce a call for sale or exchange of shares in this company in a number ensuring the achievement of 66% of the total number of votes. After exceeding 66% of the votes, this entity is obliged to call for the sale or exchange of all other shares of this company. The new rules provide for a single threshold: 50%. The consequence of exceeding it is to be the same as before in the case of 66%, i.e. the need to call for the sale or exchange of all other shares of this company.

What does this mean for investors? 

On the one hand, this means that it is no longer so easy to reach the threshold beyond which the obligation to subscribe for the sale or exchange of shares arises. It is not enough as less than one third of the votes at the general meeting of the company, but it is necessary to exceed half the number of votes. On the other hand, reaching the threshold above which the obligation to register for the sale or exchange of all other shares of the company arises is definitely easier. If the president

signs the act, we will soon see whether this solution will work in practice and it will turn out to protect the interests of minority investors better than the current one. The provisions amending the Tender Act are to enter into force on 30 May 2022.

Sergiusz Mościński