Publication time of reasoned statements pursuant to section 27 WpÜG

First published in Noerr Public M&A-Report 01/2021

Reasoned statements by the management board and the supervisory board of the target company regarding public offers pursuant to WpÜG must, according to section 27 para. 3 WpÜG, be published “without undue delay” after the offer document was submitted. The higher regional court (Oberlandesgericht) Frankfurt am Main ruled on December 8, 2005 (file number: WpÜG 1/05 OWi) that to determine what “without undue delay” means, the specific circumstances for each individual case would have to be considered. According to the court, in view of the need for speed, which has to be considered in the entire takeover procedure, a period of two weeks must not be exceeded as a rule. In fairly straightforward or particularly urgent cases, a shorter deadline might also be considered. A publication of the statement more than two weeks after the offer document was submitted, however, could generally not be regarded as published without undue delay and can only be accepted in rare exceptional cases with very special circumstances and difficulties, the court stated. For the case in question, the court considered a period of 10 days as “just about acceptable”. In this context, the higher regional court took into account that in the underlying case it was difficult to provide information due to certain members of the supervisory board being on vacation and needing a translation, that there were differing assessments on the takeover offer and that there was a need for additional discussions in view of the increase of the share price immediately after the offer was published. Further difficulties had arisen from a parallel occurring insolvency crisis of an affiliated group company whose implications for the takeover had to be considered and from the fact that two members of the target company’s supervisory board were also members of the affiliated company’s corporate bodies and were therefore very busy.

BaFin agreed with the court’s legal interpretation and specified that a period of less than two weeks could be considered if the bidder and the target company intended to perform a corporate merger and were therefore, for example, already cooperating with each other within the scope of a business combination agreement. In such cases, the corporate bodies of the target company would be sufficiently aware of the circumstances on which they need to submit their reasoned statement even before the bidder had submitted the offer document. According to BaFin, obtaining a fairness opinion should also have no influence on the interval either. In addition, both the management board and the supervisory board would be obliged to make sure that their respective statements are published in a timely manner. This should also apply if the management board and the supervisory board publish a joint statement, as is common practice.

In practice, the total of 64 reasoned statements made during the period from 2018 to 2020 were published on average 9.8 days after the publication of the offer document. In the period under review, the average interval between the publication of the offer document and the reasoned statement decreased constantly from 11.1 days in 2018 (with a total of 13 reasoned statements) to 10 days in 2019 (with a total of 28 reasoned statements) and then to 8.9 days in 2020 (with a total of 23 reasoned statements).

In a total of 23 cases during the period from 2018 to 2020 in which the bidder and the target company had started to cooperate already before the public offer had been announced (for example under a business combination agreement or a delisting agreement), the management board and the supervisory board published the reasoned statement on average as early as 8.4 days after the offer document had been published, i.e. 1.5 days earlier than the total average. Also for these cases, the interval between the publication of the offer document and the reasoned statement decreased constantly from 11 days in 2018 (with a total of one reasoned statement) to nine days in 2019 (with a total of 12 reasoned statements) to 7.5 days in 2020 (with a total of 10 reasoned statements).

In contrast to the years 2018 and 2019, in 2020 management boards and supervisory boards published their joint reasoned statements in two cases simultaneously with the publication of the offer document and in one case one day after the offer document was published. The first two cases were the joint reasoned statements of the management board and the supervisory board of QIAGEN N.V. with respect to the takeover offer by Quebec B.V. as well as of Rocket Internet SE with respect to the delisting buyback offer by Rocket Internet SE (socalled self-tender offer). The latter one was the joint reasoned statement of the management board and the supervisory board of Siltronic AG with respect to the takeover offer of GlobalWafers GmbH. Such practice could not be observed in 2018 or 2019.