In the event that the shares or voting rights of a publicly traded company are acquired in a way that changes the control of the partnership, the acquirer is obliged to make a share purchase offer to the other shareholders. Regulations regarding the matter are foreseen under Articles 25 and 26 of Capital Markets Law1 No. 6362 ("CML"), and in the Communiqué on Share Purchase Offer2 No. II-26.1, published in the Official Gazette dated 23.01.2014 and numbered 28891("Share Purchase Communiqué"). The subject has gained currency with the amendment introduced to the exemption clause in June.

General Principles

In the event that a person or persons acting in concert with that person acquire the control by fully or partially acquiring the shares representing the capital of the target corporation, it is required to make a takeover bid in such a manner so as to protect the rights of all shareholders holding other shares representing the capital of the target corporation. The concept of acting in concert shall be explained, below.

Mandatory share purchase offers aim to protect investors, in essence. Thus, even if there is no change in the share ownership of the partnership, share purchase offer obligations also arise, as a result of acquiring management control with contracts signed between the shareholders.

Concept of Control

Evaluation regarding management control is found in Article 26/2 of the CML. Accordingly, the following circumstances are deemed as gaining control of management:

  • Holding directly or indirectly more than 50 % of the voting rights of the corporation alone or together with persons acting in concert;
  • Electing the majority of the members of the board of directors; and
  • Holding privileged shares that grant the right to nominate in the general assembly for the same number of members.

However, situations where management control is not gained as a result of the existence of privileged shares are not deemed as gaining control of the company.

It is accepted that (i) corporations, the control of which is held by natural persons and/or legal entity shareholders, and (ii) natural persons and/or legal entities holding control of legal entity shareholders, and corporations, the control of which is held by these persons, are "acting in concert."

Situations where Mandatory Share Purchase Offer does not arise

Obligation of mandatory share purchase offer does not arise in the following situations:

  • Acquisition of control as a result of a voluntary takeover bid submitted to all shareholders for all of the shares in their possession;
  • In the case of acquisition of control through written agreements without acquisition of shares, providing that these agreements are approved by the general assembly of shareholders, and the shareholders who have attended the general assembly meeting and used negative votes and incorporated their dissenting opinions into the minutes are granted the break-away right;
  • If the shareholder holding the control, after the percentage of his shares in the corporation falls below 50 %, reacquires more than 50 % of the voting rights of the corporation through new share purchases, provided that the control is not acquired by third parties during the term in which the controlling shareholder's voting rights remain under the said proportion;
  • Acquisition of voting rights granting control through share transfers realized in a group of companies that is controlled by the same real person or legal entity;
  • Equal or less proportion-sharing of the control of the partnership through a written agreement between the purchaser and the shareholder who held the management control prior to the acquisition of a certain portion of shares from the shareholders holding management control of the company, providing that the acquirer owns 50 % or less of the voting rights of the partnership.


Exemptions regarding mandatory share purchase offers are regulated under Article 18 of the Communiqué. Accordingly, the Capital Markets Board ("Board") may grant exemption in the following circumstances:

  • Acquisition of publicly traded shares or voting rights in accordance with a capital structure change that is necessary in order to strengthen the financial structure of the partnership that is in financial hardship;
  • Provided that publicly traded company shares are not used in any general assembly meeting, or there is no change in the company's management board, disposing the portion of the capital shares that requires a share purchase offer or undertaking in writing that the shares shall be disposed within the time period that is stipulated by the Board;
  • The change in the management control of the main partnership of a publicly traded company not aiming to acquire the management control of the publicly traded company;
  • Sale of the public shares in publicly traded companies that are under privatization;
  • Change of management control that originates from a merger where the partnership that intends the merger is a party with the title of transferee, with the condition that the shares of the shareholders who have voted negatively in the general assembly meeting in which the transaction is approved, are repurchased prior to the merger, under the principles and procedures indicated in the prospectus issued because of the public offering;
  • In the event of non-repayment of bank loans, acquiring ownership of the shares that were given as collateral through Article 47/4 of the CML, transfer of such shares to a special purpose entity in which the bank is founder, and acquisition of such shares from the bank, or the special purpose entity by third parties, following the transfer of the ownership of the shares to the bank or the special purpose entity; and
  • Transfer of the shares for the fulfillment of a legislative provision that determines the qualification of shareholding.

Communiqué on Amendment to the Communiqué No. II-26.1 Governing the Share Purchase Offer published in the Official Gazette dated 05.06.2018 and numbered 30442 introduced two more exemptions regarding repayment of bank credits and fulfillment of a legislative provision.

The exemption provision refers to the CML provision that provides convenience on collection of receivables from the collateral in the event of default, or other circumstances foreseen under legislation or agreement. The related CML provision provides convenience for the pre-conditional obligations; in other words, the obligations prior to the transfer, is unlikely in that this exemption relates to a subsequent liability. The Board has also extended such convenience for a post-acquisition liability with this provision. Thus, a deficiency encountered in practice, is remedied.

The relevant provision also refers to the concept of special purpose business. In addition to acquisition of the shares taken as collateral under Article 47/4 of the CML, exemption is also granted to transfer to a special purpose entity established by the creditor bank, and purchase of third parties from the related entity or the bank, in the event of non-repayment of the loans. The term "special purpose entity" mentioned in the provision signifies an entity that has been established as a company, foundation, ordinary partnership or entity that does not have a legal personality, in order to fulfill a narrow-scoped and completely defined objective.3

The bank notion in the Article refers to the Banking Law numbered 5411 that contains provisions regarding the banks operating in Turkey. That said, in the article there is no provision stipulating that the property of the special purpose business completely belongs to the bank operating in Turkey. In this regard, it is necessary and sufficient to have a Turkish bank as a partner in the special purpose business, in order for the foreign banks and finance institutions to benefit from the said exemption.

Distinct from the above-mentioned the situations where the share purchase offer obligation does not arise, in cases regulated under Article 18, an exemption shall be granted by a Board decision. The request for exemption is made to the Board within six working days after the emergence of the obligation of a share purchase offer, by those who are obliged to place the offer.


Under Article 26/6 of the Share Purchase Communiqué, the voting rights of real persons and legal entities that are obliged to make takeover bids, and of those who act in concert with them, will be frozen, automatically, in the event that such obligation is not fulfilled within the duration to be determined by the Board. The related shares shall not be considered in the quorum of the general assembly meeting.


Exemption on mandatory share purchase offers regulates the situations where banks cannot collect their loan receivables. By means of the provision, collection of bank receivables is facilitated, and exemption is granted to share purchase offer obligations for acquisitions that are realized in order to collect loan receivables.


[1] Capital Markets Law numbered 6362,

[2] The Communiqué numbered II-26.1 Governing the Share Purchase Offer,

[3] The Communiqué on Turkish Accounting Standards Comments,

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.