Austria: Takeover Commission Rulings On Acting In Concert And Change Of Control In Shareholder Syndicates

Recent rulings by the Austrian Takeover Commission (TC) reflect a case by case approach to acting in concert situations and changes in shareholder arrangements. The TC will review and decide cases based on a substantive analysis rather than by form or strict letter law, guided by what is in the best interest of the free-float shareholders. This has allowed core shareholders and their advisors to argue the specific facts of a case, often resulting in the avoidance of a mandatory offer.

Acting in concert

The Austrian Takeover Act (TA) defines acting in concert as an agreement based on collaboration with a bidder to achieve or exercise control over a listed target, in particular by coordinating the voting rights1. The legal consequences include: shareholdings of persons acting in concert will be added up; the obligation to launch a mandatory offer will be extended to all parties acting in concert; and/or prior and parallel acquisition of shares will affect the determination of the minimum price applicable to a mandatory offer.

The TA provides for a rebuttable presumption of acting in concert when parties agree or act together in voting to elect members of the supervisory board of the target. To avoid the usually undesired legal consequences of acting in concert, parties will have to argue that coordination of voting in a particular resolution (eg, as to a capital increase or in the appointment of supervisory board members) was a one-time event and will not lead to a permanent influence on or control of the management or supervisory board decision making.

In Binder & Co2, the TC held that co-ordinated stake-building and identical board compositions in the boards of two different core-shareholders were relevant when considering whether those shareholders were acting in concert. In a different case, the TC held that coordinated voting in a shareholder aided debt restructuring of the target in distress did not constitute acting in concert3. The debt restructuring involved coordinated shareholder action at the target level to allow one of the core-shareholders of the target to take over a major participation of the target against assumption of debt. The corporate reorganisation allowed the re-structuring of the balance sheet of the target in distress.

In Erste Group Bank/Criteria Caixa Corp, the TC had to decide a more complex case4. Spanish Criteria Caixa Corp (Criteria) had increased its stake in Erste Group Bank and also entered into various cooperation arrangements under the heading of a so-called Preferred Partnership Agrement with Erste Private Foundation, Erste Group Bank´s 31.12% core-shareholder. The terms of the the Preferred Partnership Agreement included that: (i) Criteria could not influence the business of Erste Group Bank or act jointly with Erste Private Foundation concerning voting; (ii) Criteria could not transfer its shareholding to a party considered hostile by Erste Private Foundation or participate in a hostile offer on Erste Group Bank (it would, however, be allowed to tender into such offer); and (iii) Criteria´s supervisory board members would remain in the minority and Erste Private Foundation kept control of the supervisory board. The TC held that the parties had sufficiently demonstrated that they were not acting in concert. Given this analysis, both these arrangements and the acquisition by Criteria Caixa of 2% or more in the shareholding of the target during 12 month intervals (otherwise "creeping") did not trigger a mandatory offer. The TC applies special scrutiny to option arrangements, where the it attributes shares to the option beneficiary even before the beneficiary has influence on voting rights if such shares are held for the account of the beneficiary of the option5.

Changes in shareholder syndicates

Under the TA, the formation, dissolution and changes in the composition of a group of shareholders acting in concert will trigger a mandatory offer6. The TC has developed substantial case law when a change in a shareholder syndicate will constitute a material change which triggers a mandatory offer. In the course of a restructuring of the core-shareholder base implemented by a capital increase in listed construction company Porr7, core-shareholders in a so-called unanimity-syndicate re-arranged the syndicate composition. The TC qualified the re-arrangement as an exit of one syndicate member from a syndicate with an ad personam structure, where each shareholder in the syndicate irrespective of its shareholding percentage had one-vote in the syndicate (a so-called "personalistic unanimity syndicate").

Under the TC´s standard practice such exit, bringing substantial change in the composition of the the membership in the shareholder syndicate triggered a mandatory offer8. However, in the Porr-case, the TC applied special scrutiny and held that the change in the composition of the syndicate was in fact a substantial change of the shareholder syndicate9. Rather than concluding that such substantial change triggered a mandatory offer, the TC reviewed whether it in fact endangered the interests of others, in particular of the free float shareholders. The analysis focused on the shareholder structure of the target, on the voting power of non-syndicated minority core-shareholders and free float versus syndicated shareholders. In re-arranging the terms of the syndicate agreement, the syndicated shareholders agreed to limit the exercise of the aggregate voting power of the syndicate to 50% plus two votes. Moreover, the syndicate gave up control of the supervisory board by increasing the number of and admitting independent supervisory board members. This allowed the TC to conclude that no obligation to launch a mandatory offer was triggered since free float shareholder interests appeared to be sufficiently protected despite the material change in the syndicate of the controlling shareholders.

In re STRABAG10, the TC held, against the backdrop of the credit crunch, that no change of control was involved and a mandatory offer was not triggered if one of the partners in the three party co-controlling syndicate at STRABAG temporarily reduced its 25% plus 1 vote shareholding and participation in the syndicate to one registered share with the co-shareholders taking over the former participation for a period of up to 1.5 years. In non-crisis times, the asymmetry of equity participation and contractual voting right in a shareholder syndicate would likely have been deemed to constitute a control change triggering a mandatory offer.

In a recent follow up ruling11, the TC allowed that the option exercise, and thus re-acquisition of the shareholding by the co-controlling minority shareholder, related to a 17% shareholding rather than to the full 25% with a further extension of the option as to the remaining 8% stake until 2014. The TC held that no mandatory offer was triggered despite "restructuring" of the 2009 option arrangements of the co-controlling shareholders since the re-acquisition of the 17% stake corrected the earlier asymmetry of equity participation and core-shareholder co-control under the syndicate arrangements.

This ruling re-affirmed the casuistic approach of the TC, who is prepared to be flexible in applying the takeover rules where the financial interests of the free float shareholders would have been negatively affected had the rules been applied narrowly.

This article was originally published in the schoenherr roadmap`11 - if you would like to receive a complimentary copy of this publication, please visit:


1 sec 1/6 TA

2 Uuml;bK 27.03.2009, GZ 2009/1/1-36

3 ÜbK 25.06.2009, GZ 2009/2/3-17

4 ÜbK 20.05.2009, GZ 2009/1/3/30

5 ÜbK 23.10.2009, GZ 2009/1/4-103; ÜbK 31.01.2008, GZ 2007/3/3-157

6 sec 22a TA

7 ÜbK 5.05.2010, GZ 2010/1/2-30

8 sec 22a/3 TA

9 sec 22a/3 TA

10 ÜbK 27.04.2009, GZ 2009/3-2-42

11 ÜbK 19.10.2010, GZ 2010/3/2-31

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions