ACT - pak.hrpak.hr/cke/propisi, zakoni/en/TakeoverofJointStockCompaniesAct... · EN Act on the Takeover of Joint Stock Companies HR Zakon o preuzimanju dioničkih društava and conditions

EN Act on the Takeover of Joint Stock Companies

HR Zakon o preuzimanju dioničkih društava

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Please note that the translation provided below is only provisional translation and therefore does NOT represent an official document of the Republic of Croatia. It confers no rights and imposes no obligations separate from those conferred or imposed by the legislation formally adopted and published in Croatian language.

NN 109/07

Last check: 11.03.2009.

ZAKON

O PREUZIMANJU DIONIČKIH DRUŠTAVA

ACT ON THE TAKEOVER OF JOINT STOCK COMPANIES

GENERAL PROVISIONS

Article 1

This Act shall regulate the conditions for submission of the bids for takeover of target companies, takeover

procedure, rights and obligations of participants in the takeover procedure and the supervision of the target

companies' takeover procedure.

DEFINITION OF TERMS

Article 2

For the purpose of this Act, the terms hereunder shall have the following meaning:

1. target company shall mean:

a) a public joint stock company within the meaning of the Securities Market Act,

b) a joint stock company with the registered office in some other country of the European Economic Area

whose shares carrying the voting rights have been listed on the regulated market in the country of the

European Economic Area within the meaning of Article 4, paragraph 1, item 14 of the Directive

2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets of financial

instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the

European Parliament and the Council and repealing Council Directive 93/22/EEC (OJ of the EU L 145, p.

1),

2. bid for the takeover shall mean a publicly announced bid, mandatory or voluntary, addressed to all

shareholders of the target company for the acquisition of all shares carrying voting rights, under the terms



and conditions and in the manner prescribed by this Act. The takeover bid may be simultaneously

published also for the acquisition of shares that do not carry voting rights,

3. acquirer shall mean a natural or a legal person that acquires or has acquired target company's voting

shares,

4. offeror shall mean a natural person or a legal person that, pursuant to the provisions of this Act, is

obliged to publish a takeover bid or has announced its intention to publish a takeover bid,

5. voting shares shall mean all issued shares of the target company that carry voting rights,

6. depository shall mean a central depository agency or a bank with the registered office in the Republic of

Croatia,

7. the Agency shall mean the Croatian Financial Services Supervisory Agency,

8. Member States shall mean the states of the European Economic Area.

GENERAL PROVISIONS

Article 3

Participants in the takeover procedure shall adhere, in the takeover procedure and in exercising of their

rights and obligations, to the following principles:

1. shareholders of the target company that hold the same class of the target company's shares to which the

takeover bid refers shall have the same position in the takeover procedure,

2. shareholders of the target company to whom the takeover bid refers shall have sufficient time and

information providing them with the full insight into the state of affairs in order to make a decision on a

takeover bid,

3. in the course of the takeover procedure, the management and supervisory board of the target company

shall act in the best interest of the target company,

4. the offeror and the target company shall carry out the takeover procedure as quickly as possible, and the

target company shall not be prevented from performing its business activities longer than envisaged,

5. trading in the shares of the offeror, target company and other companies participating in the takeover

procedure shall not cause any market distortions,

6. the offeror may announce the takeover bid only upon the full provision of the cash compensation and

other types of compensations provided for by provisions of this Act.

PUBLICATION

Article 4

(1) Where the Act prescribes the obligation of publication, it shall be made in the Croatian language in the

Official Gazette and in one daily newspaper which is regularly marketed in the entire territory of the

Republic of Croatia.

(2) The obligation of publication shall be deemed fulfilled if, before the expiry of the deadline, the

advertisers accepted the orders for publication in the first following issue.



(3) By way of derogation from paragraph 2 of this Article, in case of the amended takeover bid,

competitor's bid and withdrawal of the takeover bid, the obligation of publication shall be deemed fulfilled

upon publication in one newspaper, with the acceptance of the order for publication in the first following

issue of some other newspaper.

(4) The evidence of the acceptance of the publication order and the evidence of the publication shall be

delivered without delay to the Agency whenever there is the obligation of publication pursuant to the

provisions of this Act.

(5) The offeror and persons acting in concert with the offeror and members of the management and

supervisory board of the target company shall not communicate with the public except in cases of the

compulsory publication pursuant to the provisions of this Act.

ACTING IN CONCERT

Article 5

(1) Persons acting in concert shall be natural and/or legal persons cooperating mutually or with the target

company on the basis of the agreement, express or tacit, oral or written, whose goal is the acquisition of

voting shares, harmonised exercising of voting rights or preventing some other person to carry out the

takeover procedure.

(2) The following persons shall be deemed to act in concert:

1. persons related only through circumstances concerning the acquisition of shares, such as:

– time or period in which the shares were acquired,

– place of acquisition,

– manner of acquisition,

– provisions of the acquisition agreement,

– value of acquired shares,

– other circumstances that led to the acquisition of shares that indicate harmonised acquisition or joint

intention of persons,

2. members of the management or supervisory board of companies that act in concert,

3. members of the management or supervisory board with companies in which they are members of the

said bodies,

4. persons which in the general assembly of the target company proposed the appointment or removal of

the members of the management or supervisory board, or other decisions, the adoption of which requires a

three-quarter majority of votes present at the general assembly, and who voted in favour of the adoption of

such decisions.

(3) Legal persons, and natural and/or legal persons shall act in concert when one of them directly or

indirectly controls another or other legal persons.

(4) A natural and/or a legal person shall be deemed to control a legal person if:

1. it holds, directly or indirectly, more than 25% of the share capital of the legal person,

2. it has, directly or indirectly, more than 25% of the voting rights in the general assembly of the legal

person,

3. it has the right to manage business and financial policies of the legal person on the basis of statutory

authorisations or the authorisations arising from agreements,

4. it exerts, directly or indirectly, the prevailing influence on the management of business operations and

the decision-making process.

(5) Companies shall act in concert if they are interrelated pursuant to the provisions of the Companies Act.

(6) Natural persons shall act in concert if they are consanguineously related by lineal kin, and in lateral kin

up to the first descendant, or if they are in marital or non-marital cohabitation.



MANNER OF ACTING IN CONCERT

Article 6

(1) Establishment of the acting in concert relationship on the basis of the agreement referred to in Article 5,

paragraph 1 of this Act shall be considered equal to the acquisition of the voting shares.

(2) Voting shares of persons acting in concert with the acquirer shall be added to the voting shares of the

acquirer.

(3) Where the obligation to publish a takeover bid results from the establishment of acting in concert based

on the agreement referred to in Article 5, paragraph 1 of this Act or where one of persons acting in concert

acquires shares so that such acquisition results in the obligation to publish a takeover bid, every such

person shall be obliged to publish a takeover bid in accordance with the terms and conditions and in the

manner established by this Act. The obligation to publish a takeover bid shall be deemed fulfilled if the bid

has been published by any of the persons who act in concert.

(4) In the case referred to in paragraph 3 of this Article, the target company may not be the offeror.

Article 7

Persons who act in concert shall have a joint and several liability to fulfil all the obligations prescribed by

this Act.

ESTABLISHMENT OF THE NUMBER AND PERCENTAGE OF VOTING RIGHTS

Article 8

(1) For the purpose of this Act, when establishing the number of the target company's voting shares held

by the offeror and by persons who act in concert with the offeror, the account shall be taken of the target

company's voting shares:

1. which have been acquired by those persons,

2. which such persons transferred to a third person as security, except where such person is authorised to

exercise independently the voting rights arising from those shares notwithstanding the instructions of those

persons,

3. for which the right of usufruct has been established in favour of those persons,

4. which the offeror may acquire through the declaration of will, as for instance the option for the purchase

of shares,

5. which have been entrusted to those persons, if they can exercise independently the rights arising from

those shares, at their own discretion, without specific instructions of shareholders.

(2) For the purpose of this Act, the percentage of the target company's voting shares shall be calculated

with respect to all voting shares of the target company, including also treasury shares of the target

company and the shares that do not carry voting rights or the voting rights have been limited by law or

some legal transaction.

(3) Within the meaning of paragraph 1, item 1, of this Article, the offeror and persons acting in concert

with the offeror shall be deemed to have acquired voting shares upon conclusion of the legal transaction or

occurrence of some other legal ground for the transfer of shares, regardless of the transfer of shares and

registration in the depository or target company's share



register and notwithstanding the fact that the legal transaction has been concluded under a suspensive

condition. Under the same conditions, it shall be deemed that the offeror and persons acting in concert with

the offeror jointly acquired voting shares also where instead of the shares they obtain certificates

representing the ownership of a certain number of the target company's shares, provided that such

certificates are traded on the stock exchange, as for instance global depository receipts (GDRs). The

provision of paragraph 1, item 4, of this Article shall appropriately apply to the acquisition of such

certificates.

MANDATORY TAKEOVER BID

Article 9

(1) A natural or a legal person shall publish a takeover bid where they directly or indirectly, independently

or acting in concert, have acquired the target company's voting shares, so that with the previously acquired

shares they exceed the threshold of the 25% of the target company's voting shares (control threshold).

(2) Upon exceeding of the control threshold and publication of the takeover bid, a natural or a legal person

shall publish a takeover bid where they, independently or acting in concert, through a direct or indirect

acquisition of the target company's voting shares, increase the percentage of voting rights by more than

10% (additional threshold).

(3) By way of derogation from the provision of paragraph 2 of this Article, a takeover bid shall be

published by a natural or a legal person that upon a takeover bid, independently or acting in concert,

through a direct or indirect acquisition of the target company's voting shares, increases the percentage of

voting rights by less than 10%, if such acquisition leads to the exceeding of the threshold of 75% of the

voting rights (final threshold).

(4) Mandatory publication of a takeover bid, where further acquisition of the target company's voting

shares takes place, shall not be imposed upon a natural or a legal person that:

1. published a takeover bid in accordance with the provision of paragraph 2 of this Article,

2. upon the takeover bid, published in accordance with the provisions of paragraphs 1 and/or 2 of this

Article, holds at least 75% of the voting rights,

3. published a takeover bid in accordance with the provision of Article 14, paragraph 3 of this Act.

(5) A natural or a legal person that pursuant to the provisions of this Article is obliged to publish a

takeover bid shall, without delay, deliver a notification of such obligation to the Agency, target company,

stock exchange and the regulated public market on which the trade in the target company's shares has been

approved, and shall publish such notification without delay.

(6) Within the meaning of this Article an indirect acquisition of shares shall be deemed the acquisition of

control within the meaning of Article 5, paragraph 4 of this Act.

VOLUNTARY TAKEOVER BID

Article 10

(1) A person that is not obliged to publish a takeover bid in accordance with the provisions of this Act and

that intends to carry out the takeover may publish a takeover bid only under the conditions and in the

manner prescribed by this Act.

(2) In case of paragraph 1 of this Article, a person intending to carry out the takeover shall, without delay,

deliver a notice on the intention to publish a takeover bid to the Agency, target



company, stock exchange and the regulated public market on which the trade in shares of the target

company has been approved, and shall publish the takeover bid without delay.

(3) Upon issuance of the notification referred to in paragraph 2 of this Article, the person intending to

carry out the takeover shall become obliged to publish a takeover bid under the conditions and in the

manner established by this Act.

(4) The obligation to publish a takeover bid shall also arise where the offeror published the notification

that does not contain the data referred to in Article 22, paragraph 1, items 1, 2, 3 and 4, of this Act and/or

the offeror published the notification in some other manner from which it is visible that the offeror,

independently or acting in concert, intends to carry out the takeover of the target company.

(5) In case of the competitors' bids, any acquisition of the target company's voting shares by the future

competitive offeror shall be null and void from the moment of the announcement of the intention of the

takeover by the first offeror.

NOTIFICATION OF THE PUBLICATION OF THE TAKEOVER BID

Article 11

(1) Notifications referred to in Article 9, paragraph 5 and Article 10, paragraph 2 of this Act shall contain

the data referred to in Article 22, paragraph 1, items 1, 2, 3 and 4, of this Act and the offeror's statement

that he/she will publish a takeover bid within a deadline prescribed by this Act.

(2) The management of the stock exchange and of the regulated public market on which the trade in the

target company's shares has been approved may use, before publication, the received notifications referred

to in paragraph 1 of this Article only for the purpose of making a decision whether the trade in the target

company's shares should be suspended or not.

(3) The target company shall inform the Agency, without delay, about the receipt and the content of the

received notification referred to in paragraph 1 of this Article and about all actions or negotiations with the

offeror or the persons acting in concert with the offeror, or that such actions or negotiations are not taking

place.

(4) The target company shall inform the representatives of employees, or where they are absent the

employees, about the content of the received notification referred to in paragraph 1 of this Article.

STATEMENT ON THE INTENTION TO PUBLISH A TAKEOVER BID

Article 12

(1) The Agency may request from a natural and/or legal person an explicit statement on the intention of

takeover, if the situation on the capital market indicates a potential takeover, and particularly where:

1. circumstances indicate that a takeover agreement exists, or

2. the trade volume and the price of the target company's shares on the stock exchange or the regulated

public market significantly changed, or

3. natural and/or legal person express their wish to carry out a takeover in some other way, for instance

they communicate with the public.

(2) The statement referred to in paragraph 1 of this Article shall be delivered to the Agency by a natural

and/or legal person without delay.



(3) In case of paragraph 1 of this Article, the Agency may require from the target company an explicit

statement confirming whether it is acquainted with the intention of the takeover, which that company shall

deliver to the Agency without delay.

(4) At the request of the Agency, a natural and/or a legal person shall without delay publish and deliver to

the stock exchange and the regulated public market on which the trade in the shares of the target company

has been approved the statement which they deliver to the Agency.

PROHIBITION OF THE CIRCUMVENTION OF THE TAKEOVER PROCEDURE AND EXCLUSION

OF THE VOTING RIGHTS

Article 13

(1) A bid or a general bid directed to the shareholders of the target company with the aim to acquire the

voting shares shall not be allowed if such acquisition shall lead to the obligation to publish a takeover bid.

(2) A public call or any other call directed to the shareholders of the target company to present a bid with

the aim to acquire voting shares shall not be allowed if such acquisition shall lead to the obligation to

publish a takeover bid.

(3) The offeror and the persons acting in concert with the offeror may not exert the voting rights arising

from all acquired shares of the target company in the following cases:

1. from the first day of the delay until the day of fulfilment of this obligation where, after the obligation to

publish a takeover bid arises, they fail to submit the request for approval of the publication of the takeover

bid within the legal deadline,

2. where the Agency denies or rejects the request for approval of the publication of the takeover bid, from

the day on which the decision denying or rejecting such request becomes final until the day on which the

Agency's decision approving the publication of the takeover bid becomes final,

3. where, after the Agency approves the publication of the takeover bid, they fail to publish it within the

legal deadline, from the first day of the delay until the day of the fulfilment of this obligation.

EXCEPTIONS TO THE OBLIGATION TO PUBLISH A TAKEOVER BID

Article 14

(1) The acquirer shall not be obliged to publish a takeover bid if:

1. shares of the target company are acquired through inheritance,

2. shares of the target company are acquired through the division of matrimonial assets,

3. shares of the target company are acquired through the increase of the share capital, through the issuance

of shares, and the target company's general assembly that adopts the decision on the increase of the share

capital approves to the acquirer the acquisition of the target company's voting shares without the obligation

to publish a takeover bid, if such acquisition of the voting shares would lead to the obligation of the

acquirer to publish a takeover bid,

4. the acquirer acquires the shares of the target company which is a bankruptcy debtor in the bankruptcy

proceedings,

5. shares of the target company are acquired in the process of the merger of companies, but exclusively

where only one of the companies participating in the merger procedure holds the shares of the target

company,



6. shares of the target company are acquired through the change of the legal form of the company,

7. a legal person acquires the shares of the target company from another legal person whose members or

shareholders are directly or indirectly the same persons or when the shares are acquired by transfer due to

the restructuring of the concern,

8. the shares of the target company are acquired in exchange for the dividend payment and the general

assembly of the target company approves to the acquirer the acquisition of the target company's voting

shares without the obligation to publish a takeover bid, if such acquisition of the voting shares would lead

to the acquirer's obligation to publish a takeover bid,

9. after completed takeover bid, the shares of the target company are acquired through a transfer among

persons that in the takeover bid acted in concert,

10. by acquiring the target company's shares the acquirer holds the percentage of the voting shares that is

equal to or less than the percentage of the voting shares held by another target company's shareholder who

published a takeover bid,

11. as a credit institution, within 6 months from the day when it became a lawful owner of the shares

which it acquired as a fiduciary owner, if the same shares are released,

12. as creditors, if they acquire the shares of the companies in rehabilitation in accordance with the Act on

Rehabilitation of Certain Companies,

13. it is prescribed by a special regulation.

(2) The approval referred to in paragraph 1, items 3 and 8, of this Article, shall be given by the general

assembly of the target company through a three-quarter majority votes present at the general assembly,

excluding the votes of the acquirer and persons acting in concert with the acquirer.

(3) Persons referred to in paragraph 1 of this Article that are exempt from the obligation to publish a

takeover bid shall be obliged in case of further acquisition of the target company's shares to publish a

takeover bid in the manner and under the conditions established by this Act.

(4) The Republic of Croatia, the Croatian Privatisation Fund and the State Agency for Deposit Insurance

and Bank Rehabilitation, as acquirers of the target company's voting shares, shall not be obliged to publish

a takeover bid if they within 14 days from occurrence of the obligation to publish a takeover bid inform the

Agency and the target company about their intention to release the shares exceeding the 25% threshold,

provided that they release the surplus shares within a period of 6 months.

(5) The Croatian Privatisation Fund, where it independently or acting in concert acquires the shares of the

target company in accordance with the Privatisation Act, shall not be obliged to publish a takeover bid.

ACCESS TO THE DEPOSITORY OR SHARE REGISTER

Article 15

Where the offeror is obliged to publish a takeover bid, the target company, i.e. the central depository

agency shall be obliged to enable the offeror, at the offeror's request, the access to the data from the

depository i.e. share register referring to the shareholders and shares of the target company.

PRICE IN THE TAKEOVER BID

Article 16



(1) The offeror and persons acting in concert with the offeror shall offer the same price for all shares of the

same class or an equal number of the replacement shares.

(2) The price in the takeover bid may not be lower than the highest price at which the offeror and persons

acting in concert with the offeror acquired the voting shares in the period of one year prior to the day of the

occurrence of the obligation.

(3) Where the average price of shares reached on stock exchanges and regulated public markets is higher

than the price referred to in paragraph 2 of this Article, the offeror shall be obliged to offer a higher price,

provided that the average price is calculated for each stock exchange or regulated public market as a

weighted average of all prices reached at the stock exchange or the regulated public market in the last three

months prior to the occurrence of the obligation to publish a takeover bid.

(4) Where the offeror and persons acting in concert with the offeror did not acquire the voting shares

during the one-year period prior to the date of the occurrence of the obligation, the price in the offer shall

not be lower than the average price reached at stock exchanges or regulated public markets.

(5) Where the offeror and/or the person acting in concert with the offeror, contrary to the provision of

Article 40 of this Act, acquire or release the shares of the target company at the price that is higher than the

price referred to in paragraphs 2, 3 and 4 of this Article, they shall be obliged to offer a higher price in the

takeover bid.

(6) Where the offeror fails to submit the request for approval of the publication of the takeover bid within

the deadline referred to in Article 24, paragraph 1 of this Act, the average price referred to in paragraph 3

of this Article shall be calculated as a weighted average of all prices reached on the stock exchange or the

regulated public market, separately for each subsequent quarter, starting from the quarter preceding the day

of the occurrence of the obligation to publish a takeover bid until the day of the submission of the offer,

and the offeror shall offer in the takeover bid at least the highest quarterly price calculated in the

mentioned period, if that price is higher than the price referred to in paragraph 2 of this Article.

(7) Where the offeror or the person acting in concert with the offeror, within a one-year period from the

lapse of the takeover bid period, acquires the shares of the target company which were subject of the bid,

at the price which is higher than the bid price, the offeror shall be obliged to pay the difference in price to

the shareholders who accepted the takeover bid, within 7 days from the day of acquisition.

(8) The obligation referred to in paragraph 7 of this Article shall not refer to the acquisition of shares in

cases of status changes or the increase of the target company's share capital or where the target company's

shares are acquired instead of the dividend payment.

COMPENSATION IN THE TAKEOVER BID

Article 17

(1) The offeror may offer in compensation for the takeover of shares which are subject of the takeover bid

the following:

– cash (cash compensation),

– replacement shares (replacement compensation),

– combination of cash and replacement shares in which case the offeror may freely determine the ratio of

cash to the replacement shares (combined compensation).

(2) Where the offeror offers for the takeover of the shares, which are subject of the takeover bid, the

replacement or combined compensation, the offeror shall be obliged to offer the cash compensation as an

alternative.



(3) Replacement shares shall be listed at least in the same quotation or quotation of the same grade of

transparency as the shares which are the subject of the takeover bid, of the same type and class as the

shares that are the subject of the takeover bid and shall not be encumbered.

(4) The Agency shall prescribe in an ordinance the terms and conditions under which the offeror may offer

in the takeover bid the replacement or combined compensation.

ASSURANCE OF COMPENSATION

Article 18

(1) Prior to the submission of the request for approval of the publication of the takeover bid, the offeror

shall assure the compensation for takeover of all shares that are the subject of the takeover bid.

(2) The provision of paragraph 1 of this Article shall appropriately apply also where the offer will be

changed at the higher price.

Article 19

(1) For the purpose of assuring the cash compensation, the offeror shall be obliged to deposit to a special

account with the depository the cash assets needed for payment of all shares that are the subject of the

takeover bid and/or deliver to the depository an irrevocable first call bank guarantee issued in favour of

persons that will give in custody their shares in the takeover bid.

(2) The validity period of a bank guarantee may not be shorter than 15 days from the last day of the

deadline for payment for the shares referred to in Article 37, paragraph 2 of this Act.

(3) The offeror, the person acting in concert with the offeror and the target company may not issue a bank

guarantee referred to in paragraph 1 of this Article.

(4) The offeror may not dispose of the cash assets which are, due to the assurance for the payment of

custody shares, allocated to a special account with the depository, except for the payment of the custody

shares.

(5) The Agency may prescribe additional conditions to be fulfilled by the bank issuing a guarantee referred

to in paragraph 1 of this Article as well as the content of the agreement on the issuance of a bank guarantee.

Article 20

For the purpose of assuring a replacement or combined compensation, the offeror shall deposit in custody

the replacement shares on a special account with the depository.

AGREEMENT ON SHARE CUSTODY SERVICES

Article 21

(1) Prior to the submission of the request for approval of the publication of the takeover bid, the offeror

shall conclude with the depository an agreement on custody of shares that are the subject of the takeover

bid.

(2) If the shares that are the subject of the takeover bid appear in legal transactions in the form of

electronic records of the central depository agency, the depository shall be the central depository agency.



(3) If the shares that are the subject of the takeover bid do not exist in the form of the electronic records

with the central depository agency, the offeror shall conclude an agreement on share custody services with

the bank registered in the Republic of Croatia and the bank shall accept in the agreement all prescribed

obligations and responsibilities of the depository towards the offeror and every shareholder that gives the

shares in custody, so that the shareholder may request indemnification from the bank on the basis of the

said agreement.

(4) The offeror and the depository shall have a joint and several liability for any damages suffered by a

shareholder in relation to the share custody services.

(5) When concluding the agreement referred to in paragraph 1 of this Article, the offeror shall provide to

the depository all data necessary for the preparation and carrying out share custody services.

MANDATORY CONTENT OF THE TAKEOVER BID

Article 22

(1) A takeover bid shall contain all necessary data to enable the shareholders to decide upon the acceptance

of the offer and particularly:

1. the name, registered office and business address of the target company, the amount of the share capital

and the data on the type, class and number of shares (in the absolute and relative amounts) which

constitute the share capital of the target company,

2. the name, legal form, registered office and business address, i.e. the name, family name and the address

of the offeror,

3. the name, legal form, registered office and business address i.e. the name, family name and the address

of persons acting in concert with the offeror and the description of the manner of acting in concert,

4. data on the type, class and number (in the absolute and relative amounts) of shares and votes of the

target company held by the offeror and persons acting in concert with the offeror,

5. data on the type and class of shares that are subject of the takeover bid,

6. the percentage of shares constituting the condition referred to in Article 23, paragraph 2, item 2, of this

Act, if the takeover bid is conditional,

7. a clear statement that the takeover bid is directed towards all shareholders of the target company, for

acquisition of all shares that are the subject of the bid, under the prescribed and published terms and

conditions,

8. the price which the offeror is obliged to pay per share and the manner of establishing the price,

9. where the offer includes the replacement or combined compensation, data on replacement shares and

rights arising therefrom, the price of replacement shares, terms and conditions of the replacement and the

issuer of the replacement shares,

10. source and manner of assuring the compensation for payment of the shares that are the subject of the

takeover bid,

11. payment period,

12. validity period of the takeover bid,

13. the name, registered office and business address of the depository,

14. instructions on the manner and effect of the custody of shares and other rights and obligations of

shareholders that give the shares in custody, and particularly on the right of shareholders to withdraw the

shares from the custody and to withdraw from the acceptance of the takeover bid,

15. intention of the offeror concerning the future operations of the target company and, to the extent to

which it is influenced by the takeover bid, the future operations of the offeror's



company; strategic plans of the offeror with respect to the target company and possible consequences of

the implementation of those plans to the employment policy and working and legal status of the employees

of the target company and the offeror's company, as well as to the possible changes related to the places in

which the target company and the offering company perform their operations; intention of the offeror in

relation to the management of the target company and the data on cash and non-cash disbursements as well

as other benefits that are given or are likely to be given to the members of the management and

supervisory board of the target company,

16. the amount of the indemnification for limitations and/or elimination of rights of shareholders as a

consequence of the rules on limitations referred to in Article 44 of this Act, if it is applied, and details on

the manner of payment and the method used for establishment of indemnification,

17. indication of the state whose law shall apply to contractual relationships among the offeror and persons

that accepted the takeover bid and the indication of the competent court,

18. other conditions of the takeover bid established by regulations adopted on the basis of this Act.

(2) The Agency may require from the offeror to provide additional data relating the content of the takeover

bid.

(3) In addition to the takeover bid which is delivered to the Agency, the offeror shall enclose the following

documents in their original form or a copy thereof verified by a notary public:

1. documents of legal transactions whereby the offeror and persons acting in concert with the offeror

acquired the shares of the target company in the period of 1 year prior to the occurrence of the obligation

to publish a takeover bid, and in the case of the acquisition and release of shares contrary to the provision

of Article 40 of this Act also the documents regarding such legal transactions,

2. statement of the offeror and persons acting in concert with the offeror expressing that, except legal

transactions referred to in item 1 of this paragraph, they did not conclude other legal transactions for the

purpose of acquiring shares of the target company,

3. certificate of the depository regarding the assurance of the compensation for the takeover of all shares

that are the subject of the takeover bid,

4. certificate of the stock exchange or a regulated public market, issued at the request of the offeror,

regarding the average price referred to in Article 16, paragraphs 3 and 6 of this Act,

5. agreement with the depository regarding the share custody services,

6. previous consent of the Croatian National Bank, where the subject of the takeover are bank shares, i.e.

the previous consent of some other competent institution, in other cases where this is prescribed by law,

7. excerpts from the court register or some other appropriate register evidencing a legal form, registered

office, business address, authorised representatives, not older than 30 days counting from the day of the

submission of the offer, translated into the Croatian language by a certified court interpreter, where the

offeror and the person acting in concert with the offeror are legal persons with the registered office abroad,

8. statement whereby a proxy is appointed (name of the company, registered office, business address i.e.

the name, family name and address) for the delivery of documents in the Republic of Croatia, if a legal or

natural person has a registered office i.e. temporary or permanent residence abroad,

9. other documentation at the request of the Agency,

10. proof on the payment of the administrative tax and fee.

(4) Where the documents, which are enclosed to the takeover bid, are written in a foreign language, their

translation by a certified court interpreter shall also be submitted.



CONDITIONAL TAKEOVER BID

Article 23

(1) The obligation to purchase shares which are the subject of the takeover bit may not be made

conditional by the offeror.

(2) By way of derogation from the provision of paragraph 1 of this Article:

1. the offeror may in the takeover bid state that the subject of the takeover shall not be the shares which are

encumbered,

2. a voluntary takeover bid may be made conditional by the offeror upon reaching of a certain level of

success which may not be lower than the control threshold. If in the takeover bid, a total percentage of the

custody voting shares together with a total percentage of voting shares already held by the offeror within

the meaning of Article 8 of this Act does not exceed the success threshold, the offeror may not take over

the custody shares, and where with the custody shares the success threshold is exceeded, the offeror shall

be obliged to take over all custody shares, under published and prescribed conditions.

DECIDING UPON THE REQUEST FOR APPROVAL OF PUBLICATION OF THE TAKEOVER BID

Article 24

(1) The offeror shall within 30 days from the occurrence of the obligation to publish a takeover bit submit

to the Agency the request for approval of the publication of the takeover bid, takeover bid and the

documents referred to in Article 22, paragraph 3 of this Act.

(2) For the purpose of establishing all facts and circumstances important for decision-making, the Agency

may require from the offeror to submit the additional documentation.

(3) The Agency shall deliver a decision on the request of the offeror referred to in paragraph 1 of this

Article, within 14 days from the day of receiving the complete request.

(4) For the purpose of this Act, the request of the offeror shall be deemed complete where the Agency

establishes:

1. that the offeror submitted a takeover bid, all documents referred to in Article 22, paragraph 3 of this Act

and the additional documentation at the Agency's request,

2. completeness and accuracy of the data in the takeover bid and the documents enclosed to the request for

approval of the publication of the takeover bid, in accordance with Article 22, paragraphs 1 and 3 of this

Act,

3. that the price in the takeover bid has been established in accordance with the provisions of this Act.

Article 25

(1) Where the request of the offeror is incomplete or unintelligible or where the takeover bid and all

documents referred to in Article 22, paragraph 3 of this Act have not been enclosed to the request, the

Agency shall require from the offeror to complete the request and to deliver the missing documentation

and shall establish the period within which the offeror shall be obliged to meet that requirement.

(2) Where the offeror, within the given period, fails to proceed according to the requirement of the Agency

referred to in paragraph 1 of this Article, it shall be deemed that the request has not been submitted and the

Agency shall adopt a conclusion whereby the request of the offeror shall be rejected.



RESPONSIBILITY FOR ACCURACY AND VERACITY OF THE DATA IN THE TAKEOVER BID

Article 26

(1) The Agency shall not be responsible for the accuracy and veracity of the data stated in the takeover bid.

(2) Where the takeover bid lacks the data which might influence the decision on the acceptance of the

takeover bid or the takeover bid states inaccurate or wrong data, all persons that participated in the drafting

and preparation of the takeover bid shall have a joint and several liability towards the shareholders for a

potential damage that might arise on such grounds.

PUBLICATION OF THE TAKEOVER BID

Article 27

(1) The offeror shall be obliged to publish a takeover bid within 7 days from the day of receipt of the

decision referred to in Article 24, paragraph 3 of this Act.

(2) The takeover bid that is published after the expiry of the period referred to in paragraph 1 of this

Article shall be valid.

(3) Upon the receipt of the decision of the Agency referred to in Article 24, paragraph 3 and Article 29,

paragraph 2 of this Act, the offeror shall be obliged to submit without delay the takeover bid and amended

takeover bid to the target company, stock exchange and a regulated public market on which the trade in the

target company's shares has been approved and to the depository.

(4) Immediately upon the publication of the takeover bid, the target company shall inform each

shareholder about the content of the takeover bid. At a request of a shareholder the target company shall

provide all available information regarding the takeover bid. The same shall be valid also for all amended

bids.

VALIDITY PERIOD OF THE TAKEOVER BID

Article 28

(1) The takeover bid shall be valid 28 days from the day of publication. Validity period of the takeover bid

shall begin from the day of the subsequent publication.

(2) The period referred to in paragraph 1 of this Article shall be extended in case of publication of the

amended takeover bid or the publication of the competitor's bid.

(3) Where the emended takeover bid is published, the validity period of the takeover bid shall be extended

by 7 days.

(4) The final validity period of the takeover bid and the competitor's bid may not be longer than 60 days

from the day of the publication of the first takeover bid.

AMENDMENTS TO THE TAKEOVER BID

Article 29



(1) Amendments to the takeover bid shall be published within maximum 10 days prior to the expiry of the

validity period of the takeover bid.

(2) The Agency shall adopt a decision on the request of the offeror for approval of the publication of the

amendments to the takeover bid, within 3 days from the day of the receipt of the complete request.

(3) The takeover bid may be amended by the offeror through the increase in the offered price and/or the

offer of a higher number of the replacement shares. Where the price is increased, the offeror shall increase

the offered price by at least 2%.

(4) Until the expiry of the period referred to in paragraph 1 of this Article the offeror shall fulfil the

following conditions:

1. obtain the decision of the Agency on approval of the publication of amendments to the takeover bid,

2. publish amendments to the takeover bid,

3. inform the depository of the amendments to the takeover bid,

4. assure the difference in the compensation for the payment of the shares that are the subject of the

takeover bid.

(5) If the offeror in accordance with the provisions of this Act amends the takeover bid it shall be deemed

that the shareholders that accepted the takeover bid also accepted amendments to the takeover bid.

COMPETITOR'S BID

Article 30

(1) The competitor's bid is the takeover bid which, in accordance with the provisions of this Act, a third

person may publish only during the validity period of the takeover bid and which refers to the same shares

of the target company as the takeover bid.

(2) The competitor's takeover bid shall be published within maximum 10 days prior to the expiry of the

takeover bid and not later than 28 days prior to the expiry of the final validity term of 60 days referred to in

Article 28, paragraph 4 of this Act.

(3) Where the competitor's bid is published, the validity period of the takeover bid shall be extended until

the expiry of the validity period of the competitor's bid. The offeror shall without delay deliver the

notification regarding the expiry of the validity period of the takeover bid to the target company, stock

exchange and a regulated public market on which the trade in the shares of the target company has been

approved and to the depository and shall publish such notification without delay.

(4) Provisions of this Act that refer to the takeover bid shall appropriately apply to the competitor's bid.

Article 31

(1) The competitor's bid may be published only at the price which is higher than the price in the takeover

bid, whereby appropriately applied shall be the provision of Article 29, paragraph 3 of this Act.

(2) The competitor's bid may be made conditional upon reaching of a certain success threshold only if such

success threshold is also established in the takeover bid and if the same has not been reached until the

publication of the competitor's bid.

(3) The success threshold in the competitor's bid may not be higher than the success threshold in the

takeover bid.



Article 32

The Agency shall reject the request for approval of the publication of the competitor's bid if it established

that such bid is of a speculative nature or that it aims to change the price of shares which are the subject of

the takeover bid.

WITHDRAWAL OF THE TAKEOVER BID

Article 33

(1) The offeror may withdraw the takeover bid where:

1. the competitor's bid is published at a higher price,

2. bankruptcy of the target company.

(2) Provisions of paragraph 1 of this Act shall appropriately apply to the withdrawal of the competitor's bid.

(3) The offeror shall without delay inform of the withdrawal of the takeover bid the Agency, the stock

exchange and a regulated public market on which the trade in the shares of the target company has been

approved, target company and the depository.

(4) Withdrawal of the takeover bid shall be published by the offeror within maximum 7 days prior to the

expiry of the validity period of the takeover bid.

(5) Withdrawal of the takeover bid shall produce legal effects on the day of publication.

CUSTODY OF SHARES

Article 34

(1) Shares which in legal transactions appear in the form of electronic records of the central depository

agency shall be given in custody through a transfer from the accounts of shareholders to special accounts

opened for the custody of shares for the purpose of accepting the takeover offer, from which they are

returned to the shareholders' accounts in case the shares are released from custody.

(2) The shares referred to in paragraph 1 of this Article shall be given in custody by submitting or

delivering to the central depository agency a written order for acceptance/withdrawal from the takeover bid

which in addition to the data on the takeover bid, shareholder and custody shares, also contains the

authorisation given to the depository to send to a guarantor, in the name and for the account of the

shareholder, a written call for payment on the basis of the issued bank guarantee, and the signature of the

shareholder.

(3) A shareholder may withdraw the shares from the custody until the expiry of the validity period of the

takeover bid. The withdrawal of the shares from custody shall have the effect of the withdrawal from the

acceptance of the takeover bid, i.e. the effect of the termination of the agreement.

(4) A shareholder may not waive the right to a withdrawal of shares from custody. The offeror may not

make reference to the statement of a shareholder on the waiver of rights to withdraw shares from custody.

Article 35

(1) A shareholder shall give in custody to a bank the shares which do not exist in the form of electronic

records with the central depository agency, by way of submitting or delivering the



statement on the custody of shares and documents of shares or other documents from which it is evident

that he/she is the shareholder.

(2) The statement on the custody of shares shall contain personal data on the shareholder, data on the

takeover bid to which the custody refers, data on custody shares, shareholder's statement on acceptance of

the takeover bid and that the shares are given in custody due to their transfer to the offeror and the

authorisation to the bank to send to a guarantor, in the name and for the account of the shareholder, a

written call for payment on the basis of the issued bank guarantee and the signature of the shareholder.

(3) The bank shall accept the shares in custody and issue a certificate thereof to the shareholder containing

the data on the custody shares, the offeror and the takeover bid to which the custody refers.

(4) The shareholder may withdraw the shares from custody by returning to the bank a custody certificate

on which it writes and signs the statement that the shares are withdrawn from the custody.

(5) The Bank shall return to the shareholder the documents given in custody, and issue at the shareholder's

request a certificate of withdrawal of the shares from custody.

(6) The effect of the withdrawal from the custody shall also have the delivery to the bank of a shareholder's

written request for withdrawal of the shares from custody, if the bank still has not sent to the shareholder a

certificate of custody.

(7) The bank shall without delay inform the target company of any custody and of withdrawal of the shares

from custody. The target company shall immediately register in the share register the custody of shares or

release of the shares from the custody.

Article 36

(1) Shareholders that give in custody shares which have not been paid to the Croatian Privatisation Fund

shall, when giving the shares in custody, enclose the certificate of the Croatian Privatisation Fund

regarding the number of paid and unpaid shares and the calculation for the bullet repayment of the

remaining instalments before maturity.

(2) Subject of the custody may not be the unpaid shares referred to in paragraph 1 of this Article for which

the amount of the payment of the remaining instalments, according to the calculation of the Croatian

Privatisation Fund, is higher than the price which the offeror established in the takeover bid.

PAYMENT AND TRANSFER OF THE SHARES BASED ON THE TAKEOVER BID

Article 37

(1) If the shareholder gave the shares in custody according to the conditions of the takeover bid, the effect

of the acceptance of the takeover bid and the obligation for payment shall arise for the offeror upon expiry

of the validity period of the takeover bid, except in cases referred to in Article 23, paragraph 2, item 2, and

Article 33 of this Act.

(2) The payment period for custody shares shall be 14 days from the day of the expiry of the validity

period of the takeover bid.

(3) After payment of the custody shares, the depository shall return to the offeror the surplus of the cash

assets, bank guarantee or replacement shares.

COSTS

Article 38



The offeror shall bear the costs of the custody of shares and shall pay the price of shares, bear all costs of

share transfer as well as all other costs arising from the takeover bid.

TAKEOVER REPORT

Article 39

(1) Upon expiry of the payment period for shares which are the subject of the takeover bid, the offeror

shall deliver the takeover report, without delay, to the Agency, target company, stock exchange and a

regulated public market on which the trade in the shares of the target company has been approved and shall

publish the takeover report within 7 days.

(2) The takeover report shall contain the following data:


of the offeror,


of persons acting in concert with the offeror,

3. the name, registered office and business address of the target company,

4. the number of shareholders who accepted a takeover bid,

5. the number of custody shares paid and taken over by the offeror (in the absolute and relative amounts),

6. the number of custody shares for which the custody or withdrawal from the custody is disputable,

7. the number and percentage of shares of the target company which the offeror and persons acting in

concert with the offeror, individually and totally, hold after the takeover bid.

(3) If the takeover bid is made conditional in accordance with the provision of Article 23, paragraph 2,

item 2, of this Act and if the number of custody shares in the bid is insufficient, the depository shall

immediately inform thereof, as well as of the total number of custody shares, every shareholder that gave

the shares in custody, the Agency, target company and the offeror.

(4) The offeror shall publish a notification of a failed takeover bid within 7 days from the receipt of the

notification referred to in paragraph 3 of this Article.

PROHIBITION OF THE ACQUISITION AND RELEASE OF VOTING SHARES

Article 40

(1) From the moment of the conclusion of a legal transaction whereby the target company's shares are

acquired, leading to the obligation to publish a takeover bid, until the expiry of the validity period of the

bid, the shares which are the subject of the takeover bid may not be acquired by the offeror and persons

acting in concert with the offeror, and neither may they oblige themselves to acquire the shares in some

other manner except in the takeover bid.

(2) From the moment of the conclusion of a legal transaction whereby the target company's shares are

acquired, leading to the obligation to publish a takeover bid until the expiry of the validity period of the bid,

the offeror and persons acting in concert with the offeror may not release and may not oblige themselves to

release the shares which are the subject of the takeover bid.

(3) Provisions of paragraphs 1 and 2 of this Article shall appropriately apply also where notification of the

intention to publish a voluntary takeover bid is published.



OPINION OF THE TARGET COMPANY'S MANAGEMENT BOARD

Article 41

(1) The management board of the target company shall, within 10 days from the publication of the

takeover bid, publish an explained opinion regarding the takeover bid which shall contain:

1. the opinion on the type and amount of the offered compensation,

2. the opinion on the intention of the offeror regarding the future operations of the target company,

3. the opinion on the offeror's strategic plans for the target company and possible consequences of such

plans to the employment policy and working and legal status of employees of the target company, as well

as to the possible changes regarding the places in which the company performs its operations,

4. statements of the management board members regarding their intention to accept or reject the takeover

bid,

5. statements of the management board members regarding the existence of their agreement with the

offeror concerning the takeover bid, as well as the content of that agreement, if such and agreement exists.

(2) Prior to the publication of the opinion referred to in paragraph 1 of this Article, the management board

of the target company shall make evident such opinion, within 5 days from the day of the publication of

the takeover bid, to the representatives of employees or to employees if there are no representatives of

employees, who within 3 days from the presentation of the opinion may provide their opinion on the

takeover bid.

(3) If the management board of the target company receives in the period referred to in paragraph 2 of this

Article the opinion of the representatives of employees regarding the takeover bid, the management board,

when publishing, shall enclose it to their own opinion.

(4) If the opinion on the takeover bid or the opinion of employees contains false information or

information that may lead to a misconception, persons who prepared or participated in the preparation of

the opinion, shall have a joint and several liability towards the shareholders for any damage if they knew

or should have known that such information is false or leads to misconception.

(5) The management board of the target company shall deliver the opinion on the takeover bid to the

Agency, stock exchange and a regulated public market on which the trade in the shares of the target

company is approved, by no later than on the same day when advertisers are given orders for publication.

LIMITATIONS TO THE ACTIONS OF THE TARGET COMPANY'S MANAGEMENT AND

SUPERVISORY BOARD

Article 42

(1) From the moment of the receipt of the notifications referred to in Article 9, paragraph 5 and Article 10,

paragraph 2 of this Act, i.e. from the publication of those notifications if the management board did not

receive them, until the publication of the takeover bid, the management and supervisory board of the target

company shall not, without the approval of the target company's general assembly:

1. increase the share capital,

2. conclude transactions which do not fall within regular operations of the target company,



3. act in the manner which might seriously threaten further operations of the target company or conclude

transactions that might seriously threaten further operations of the target company,

4. decide upon acquisition and release of treasury shares of the target company or securities carrying rights

to those shares,

5. act in the manner that would aim to hinder or prevent the takeover bid.

(2) Decisions of the management board or the supervisory board referred to in paragraph 1 of this Article,

which were adopted prior to the day of the receipt of notifications referred to in Article 9, paragraph 5 and

Article 10, paragraph 2 of this Act or the day of publication of those notifications, and which are not fully

implemented, shall require additional approval of the target company's general assembly, except if those

are the decisions which fall within the regular business of the target company and their implementation

could not hinder or prevent the takeover bid.

(3) Notwithstanding the deadlines for convening of the target company's general assembly established by

the Companies Act, the target company's general assembly on which the actions referred to in paragraphs 1

and 2 of this Article shall be decided upon, may be convened within a maximum of 14 days prior to the

session of the general assembly.

(4) When convening the general assembly on which it shall be decided upon actions referred to in

paragraphs 1 and 2 of this Article, the target company shall be free to choose the venue of the general

assembly, whereby it shall not be obliged to proceed in accordance with the provision of Article 277,

paragraph 4 of the Companies Act and possible different provisions of the Articles of Association. If the

deadline for convening of the general assembly is shorter than a one-month period referred to in Article

279, paragraph 1 of the Companies Act, shares shall be given in custody and participation registered within

4 days, in accordance with Article 279 of the Companies Act. The company should facilitate to the

shareholders the issuance of the proxy for voting, if that is possible according to the law and Articles of

Association. Communications to shareholders, the report according to Article 308, paragraph 5, second

sentence of the Companies Act, and the timely submitted proposals of the shareholders shall be accessible

and in their summarized form made known to all shareholders. Communications need not be sent in case

the management finds, with the consent of supervisory board, that they are not likely to be submitted to

shareholders in due time. In case of proposals that are to be voted upon, the provisions referred to in the

second sentence of Article 284, paragraph 2 of the Companies Act shall also apply to bearer shares.

(5) The decision of the general assembly regarding the approval referred to in 1 and 2 paragraphs of this

Article shall be adopted by votes representing at least three quarters of the share capital present at the

general assembly when the decision is adopted.

(6) All decisions of the target company's management and supervisory board that have been adopted

contrary to the provisions of previous paragraphs of this Article shall be null and void.

(7) The search for other offerors shall not be deemed an action referred to in paragraph 1 of this Article.

BREAKTHROUGH RULE

Article 43

(1) The general assembly of the target company may, by amending the Articles of Association, decide to

apply to the company all provisions of Article 44 of this Act.

(2) The management board of the target company shall, without delay, inform the Agency and the

supervisory bodies of the Member States in which the trade in the shares of the target



company is approved on the regulated market, whether the target company adopted or deleted the

provision of the Articles of Association according to paragraph 1 of this Article.

(3) Provisions of Article 42, paragraphs 3, 4 and 5 of this Act shall appropriately apply to the convention

and conduct of the general assembly referred to in Article 44, paragraph 4 of this Act.

Article 44

(1) After publication of the takeover bid the provisions of this Article shall be valid if the general assembly

of the target company incorporates them into the company's Articles of Association.

(2) During the validity period of the takeover bid, the transfer of the target company's shares to the offeror

shall not be affected by the limitations to the transfer of the target company's shares established by:

1. the Articles of Association of the target company,

2. the agreement between the target company and shareholders of the target company,

3. the agreement among shareholders of the target company.

(3) The general assembly of the target company on which it is decided upon actions referred to in Article

42, paragraphs 1 and 2 of this Act shall not be affected by the limitations to the voting rights established by:

1. Articles of Association of the target company,

2. the agreement between the target company and the shareholders of the target company,

3. the agreement among shareholders of the target company.

(4) Where after the takeover bid the offeror holds 75% of the target company's voting shares, on the first

general assembly convened at the request of the offeror for the purpose of the amendment to the Articles of

Association and/or removal of members of the supervisory board:

1. no effect shall have limitations to the transfer of shares and limitations to the voting rights established

by the target company's Articles of Association, agreement between the target company and shareholders

of the target company and agreement among shareholders of the target company

2. no effect shall have special rights of shareholders, established by the target company's Articles of

Association, to appoint or remove members of the supervisory board

3. the offeror shall have the right, regardless of the periods for convening of the general assembly

established by the Companies Act, to request convening of the target company's general assembly by no

later than 14 days prior to the convention of the general assembly.

(5) Provisions of this Article shall not apply to the limitations to the transfer of shares and limitations to

the voting rights which are established by the agreement between the target company and the target

company's shareholders, if such limitations have been agreed i.e. agreements concluded prior to the

adoption of this Act.

(6) Where certain rights shall be seized on the basis of this Act, the offeror shall pay an appropriate

indemnification in cash. Right to indemnification according to this Act may be requested through a court

procedure only within two months from the day on which the rights were seized.

RIGHT OF SHARE TRANSFER OF MINORITY SHAREHOLDERS

Article 45



(1) Where after the takeover bid, the offeror and persons acting in concert with the offeror together hold at

least 95% of voting shares of the target company, the offeror shall have the right to transfer, for a fair

compensation, the minority shareholders' voting shares within 3 months from the expiry of the takeover

bid's validity period.

(2) Where the subject of the takeover bid were also the preferred shares not carrying voting rights and after

the takeover bid the offeror and persons acting in concert with the offeror hold at least 95% of such shares,

the offeror shall have the right also to transfer such shares of minority shareholders, for a fair

compensation, within 3 months from the expiry of the takeover bid's validity period.

(3) The offeror shall submit the request to the central depository agency for the purpose of exercising the

rights referred to in paragraphs 1 and 2 of this Article.

(4) The offeror shall, simultaneously with the submission of the request, inform of that request the

minority shareholders, the target company, stock exchange and a regulated public market on which the

trade in the target company's shares has been approved, the Agency, and shall publish that request without

delay.

(5) The fair compensation referred to in paragraphs 1 and 2 of this Article shall be the price established in

the takeover bid, increased by the difference in price in case of Article 16, paragraph 7 of this Act.

(6) For the purpose of assuring the compensation referred to in paragraph 5 of this Article, the offeror shall

deposit to a special account with the depository the cash assets or deliver to the depository an irrevocable

first call bank guarantee issued in favour of minority shareholders in the amount necessary for payment of

all shares of minority shareholders.

(7) The central depository agency shall transfer the shares from a shareholder's account to the offeror's

account and shall pay minority shareholders, without delay, after it establishes that:

1. upon the takeover bid the offeror and persons acting in concert with the offeror hold at least 95% of the

target company's voting shares and 95% of preferred shares without voting rights where paragraph 2 of

this Article is applied,

2. the offeror assured for the shares which are the subject of the request the compensation referred to in

paragraph 5 of this Article,

3. a period of 3 months from the expiry of the takeover bid's validity period has not expired.

(8) The offeror shall bear all costs related to the transfer of the shares of minority shareholders.

(9) The provisions referred to in Article 300 f to Article 300 k of the Companies Act shall not apply, from

the submission of the request until completion of the procedure of the transfer of minority shareholders'

shares.

RIGHT OF SALE OF MINORITY SHAREHOLDERS' SHARES

Article 46

(1) Where after the takeover bid, the offeror and persons acting in concert with the offeror hold together at

least 95% of the target company's voting shares, minority shareholders shall have the right, within 3

months from the expiry of the takeover bid's validity period, to sell their voting shares to the offeror, with

the obligation of the offeror to purchase those shares for a fair compensation.

(2) Article 45, paragraphs 2, 3, 5, 6 and 7 of this Act shall be appropriately applied.

(3) Where the offeror fails to fulfil the obligation referred to in paragraph 1 of this Article, minority

shareholders shall have the right to require the fulfilment of such obligation through a territorially

competent commercial court.



AUTHORITIES OF THE AGENCY AND CONDUCT OF THE SUPERVISORY PROCEDURE

Article 47

(1) The Agency shall supervise the application of provisions of this Act.

(2) Where necessary for the supervision of the application of this Act, the Agency may request from the

target company, target company's shareholders, commercial banks, broker companies and other legal and

natural persons for which the Agency deems that they might have information relevant for the supervision,

to deliver documents, statements and declarations that the Agency deems necessary for the conduct of the

supervision.

(3) Persons that are obliged to deliver documents, statements and declarations according to paragraph 2 of

this Article shall, after the authorised persons of the Agency present to them the decision on initiation of

the supervision procedure, provide the authorised persons of the Agency with the access to business

premises, appropriate premises and staff, present and submit requested documentation, give statements and

declarations and ensure other conditions necessary for the conduct of the supervision.

(4) Documentation that might serve as evidence in criminal or infringement proceedings may be

temporarily seized by the authorised persons of the Agency with the issuance of a certificate thereof, but

only until initiation of such proceedings when such documentation is submitted to a body which is

competent for the conduct of the proceedings.

(5) Upon completed supervision, persons authorised by the Agency compile the minutes on completed

supervision, which they shall deliver to a person referred to in paragraph 3 of this Article. The person

referred to in paragraph 3 of this Article shall have the right to object to the Agency within 8 days from the

day the minutes are received.

(6) Where the documents, statements and declarations that are delivered to the Agency are written in a

foreign language, their translation by a certified court interpreter shall be also delivered.

SUPERVISORY MEASURES

Article 48

(1) Where irregularities and/or unlawfulness are identified, the Agency shall by a decision order the

undertaking of actions which contribute to the establishment of lawfulness, i.e. it shall pronounce the

measure prescribed by this Act.

(2) The Agency shall by a decision establish a deadline for completion and delivery of the evidence on the

completion.

(3) Where irregularities and/or illegal matters are identified the Agency shall:

1. establish the existence of the obligation to publish a takeover bid and shall order the undertaking of

actions for publication of the takeover bid,

2. order amendments, supplements or withdrawal of the takeover bid,

3. request the delivery or publication of additional data and/or information, statements, notifications or

corrections related to the takeover bid,

4. declare the takeover bid null and void,

5. adopt other measures necessary for the removal of consequences that occurred due to the completion or

omission of activities,

6. publish all undertaken measures and sanctions which were pronounced due to the established

irregularities and/or illegal matters.



(4) All undertaken measures referred to in paragraph 3 of this Article shall be delivered by the Agency to

the target company, to shareholders through the target company i.e. to the depository, stock exchange and

a regulated public market on which the trade in the target company's shares has been approved.

(5) Where the offeror fails to proceed in accordance with the decision of the Agency referred to in

paragraph 1 of this Article, the Agency may pronounce a new or the same measure by a new decision.

Article 49

Where the offeror fails to publish a takeover bid under the conditions and in the manner set out in this Act,

each shareholder of the target company may, through a territorially competent commercial court, request a

mandatory conclusion of the agreement on the sale of shares, under the conditions under which the

takeover bid should have been published.

Article 50

(1) In the procedure before the Agency, unless otherwise provided by this Act, the provisions of the

General Administrative Procedure Act shall apply.

(2) Acts adopted by the Agency shall be final.

(3) The appeal against the acts of the Agency shall not be allowed, and the unsatisfied party may initiate an

administrative dispute.

COMMUNICATION AND DELIVERY

Article 51

Where according to the provisions of this Act the Agency has to communicate or deliver a decision to a

person with a temporary or permanent residence abroad, it shall do so to a proxy of that person who has a

temporary or permanent residence in the Republic of Croatia. Where no proxy has been appointed, the

decision shall be deemed communicated and delivered by its publication in the Official Gazette.

LIABILITY FOR DAMAGES

Article 52

Members of the management board and employees of the Agency shall not be liable for any damages

arising from the performance of duties in compliance with this Act, unless it is proved that a certain

activity has or has not been done on purpose or by a gross negligence.

COOPERATION WITH OTHER SUPERVISORY BODIES

Article 53

(1) The Agency and supervisory bodies of the Member States that supervise capital markets shall

cooperate and deliver among themselves the data when it shall be necessary for the application of the

provisions of this Act or appropriate acts of the Member States that regulate takeover.



(2) Under the conditions referred to in paragraph 1 of this Article, the Agency shall cooperate also with the

supervisory bodies of Non-Member States.

COMPETENCE AND APPLICABLE LAW

Article 54

The Agency shall be competent for implementation of the provisions of this Act fully, in all cases when

the target company has a registered office in the Republic of Croatia.

Article 55

The Agency shall be competent for the supervision of the takeover procedure of a target company that:

1. has a registered office in the Republic of Croatia and whose shares are traded on the regulated market in

the Republic of Croatia,

2. has a registered office outside the Republic of Croatia in a Member State, and whose shares are traded

only on the regulated market in the Republic of Croatia,

3. has a registered office outside the Republic of Croatia in a Member State, and whose shares are traded

on the regulated markets in several Member States which are not the countries of the target company's

registered office, including also regulated markets of the Republic of Croatia, provided that the shares

were firstly listed on the regulated market in the Republic of Croatia,

4. has a registered office outside the Republic of Croatia in a Member State and whose shares are traded on

the regulated markets in several Member States which are not the countries of the target company's

registered office, including also regulated markets of the Republic of Croatia, if the competence of the

Agency has been decided upon pursuant to Article 56 of this Act,

5. The Agency is competent for the supervision of the takeover procedure of the target company referred to

in Article 2, item 1, subitem a) of this Act, which has a registered office in the Republic of Croatia and

whose shares have not been approved for trade.

Article 56

(1) The target company with the registered office outside the Republic of Croatia in a Member State,

which at the same time lists its shares for the first time on the regulated markets in several Member States

that are not the countries of its registered office, including also the registered markets of the Republic of

Croatia, shall notify on the day of the listing of its shares each of those regulated markets and their

supervisory body, which Member State's supervisory body shall be the body competent for the supervision

of the takeover procedure.

(2) The regulated market in the Republic of Croatia on which the shares of the target company are listed

shall, without delay, publish on the internet site the notification referred to in paragraph 1 of this Article.

(3) After the listing, the target company shall, without delay, publish the notification referred to in

paragraph 1 of this Article, in a manner set out in Article 4 of this Act.

Article 57



(1) Where the Agency is competent for the supervision of the takeover procedure, in cases referred to in

Article 55, items 1 and 5 of this Act, the Agency shall fully apply the provisions of this Act.

(2) Where the Agency is competent for the supervision of the takeover procedure, in cases referred to in

Article 55, items 2 to 4 of this Act, the Agency shall apply the provisions of this Act, with the exception of

the provisions referring to the establishment of the percentage of voting rights and occurrence of the

obligation to publish a takeover bid, exceptions to the obligation to publish a takeover bid, conditions

under which the management and supervisory board of the target company may undertake measures which

lead to hindering or preventing the takeover bid and reporting to the target company's employees, instead

of which the applicable law of a Member State in which the target company has a registered office shall

apply.

Article 58

(1) Where the competent body of a Member State approved the publication of a bid for the takeover of the

target company whose shares are traded in the regulated market in the Republic of Croatia, the takeover

bid shall be acknowledged in the Republic of Croatia without the additional approval procedure.

(2) The takeover bid referred to in paragraph 1 of this Article shall be published in the manner set out in

Article 4, paragraph 1 of this Act.

(3) The Agency is authorised, prior to the publication of the takeover bid referred to in paragraph 1 of this

Article, to request from the offeror, to supplement the content of the takeover bid with the appropriate data

referring to the instructions on the manner and effects of giving shares in custody.

PENALTY PROVISIONS

Article 59

(1) A pecuniary penalty ranging from HRK 200,000 to HRK 1,000,000 shall be imposed on a legal person

for an infringement, i.e. a pecuniary penalty ranging from HRK 100,000 to HRK 500,000 shall be imposed

on a natural person for an infringement if:

1. contrary to the provisions of Article 9, paragraph 5 of this Act, they fail to deliver without delay the

notification on the occurrence of the obligation to publish a takeover bid to the Agency, target company,

stock exchange and a regulated public market on which the trade in the target company's shares has been

approved, or if they fail to publish the same notification without delay according to the provisions of

Article 4 of this Act,

2. contrary to the provisions of Article 10, paragraph 2 of this Act they fail to deliver without delay the

notification on the intention to publish a takeover bid to the Agency, target company, stock exchange and a

regulated public market on which the trade in the target company's shares has been approved, or if they fail

to publish the same notification without delay according to the provisions of Article 4 of this Act,

3. contrary to the provision of Article 24, paragraph 1 of this Act, they fail to submit the request for

approval of the publication of the takeover bid within 30 days from the day of the occurrence of he

obligation to publish a takeover bid,

4. contrary to the provisions of Article 27, paragraph 1 of this Act, they fail to publish a takeover bid

within 7 days from the day of receiving the decision referred to in Article 24, paragraph 3 of this Act.



(2) A pecuniary penalty ranging from HRK 100,000 to HRK 500,000 shall be imposed on a legal person

for infringement, i.e. a pecuniary penalty ranging from HRK 50,000 to HRK 200,000 shall be imposed on

a natural person for infringement if:

1. contrary to the provisions of Article 11, paragraph 1 of this Act, the notifications referred to in Article 9,

paragraph 5 or Article 10, paragraph 2 of this Act do not contain the data referred to in Article 22,

paragraph 1, items 1 to 4 of this Act,

2. contrary to the provisions of Article 12, paragraph 2 of this Act, they fail to deliver without delay to the

Agency, upon request of the Agency, the explicit statement indicating the intention of the takeover,

3. contrary to the provisions of Article 13, paragraph 1 of this Act, they direct the bid or a general bid to

the shareholders of he target company with the aim to acquire the voting shares,

4. contrary to the provisions of Article 13, paragraph 2 of this Act, they direct a public or some other call

to the shareholders of the target company to bid with the aim to acquire the voting shares,

5. contrary to the provisions of Article 13, paragraph 3 of this Act, they exercise the voting rights arising

from the acquired shares of the target company,

6. contrary to the provisions of Article 22, paragraph 1 of this Act, the takeover bid does not contain all

data set out in the mentioned Article or if the data are not true,

7. contrary to the provisions of Article 27, paragraph 3 of this Act, fail to deliver without delay, upon the

receipt of the Agency's decision referred to in Article 24, paragraph 3 or Article 29, paragraph 2 of this Act,

the takeover bid or amendments to the takeover bid, to the target company, stock exchange and a regulated

public market on which the trade in the target company's shares has been approved and to the depository,

8. contrary to the provisions of Article 27, paragraph 4 of this Act, fail to immediately inform every

shareholder of the content of the takeover bid or fail to provide all available information regarding the

takeover bid to a shareholder who requests so,

9. contrary to the provisions of Article 40, paragraph 1 of this Act, from the moment of conclusion of the

legal transaction relating to the acquisition of the target company's shares, whereby the obligation to

publish a takeover bid arises, until the expiry of the takeover bid's validity period, acquire or release, or

oblige themselves to release the shares which are the subject of the takeover bid,

10. contrary to the provisions of Article 41, paragraph 1 of this Act, within 10 days from the day of

publication of the takeover bid, fail to publish a substantiated opinion on the takeover bid, or publishes an

opinion that does not contain the data prescribed by paragraph 1 of that Article,

11. contrary to the provisions of Article 42, paragraph 1 of this Act, without the approval of the general

assembly undertake actions referred to in items 1 to 5 of that paragraph,

12. contrary to the provision of Article 42, paragraph 2 of this Act, with no additional approval of the

general assembly implement decisions referred to in Article 42, paragraph 1 of this Act,

13. contrary to provisions of Article 47, paragraph 2 of this Act, fail to deliver documents, statements or

declarations which the Agency deems necessary for conduct of the supervision,

14. contrary to the provisions of Article 47, paragraph 3 of this Act, fail to provide access to business

premises, do not provide appropriate premises and staff, does not present or does not deliver the requested

documentation, fail to provide statements or declarations or do not ensure other conditions necessary for

the conduct of the supervision.

(3) A pecuniary penalty ranging from HRK 50,000 to HRK 200,000 shall be imposed on a legal person for

infringement, i.e. a pecuniary penalty ranging from HRK 20,000 to HRK 100,000 shall be imposed on a

natural person for infringement if:



1. contrary to the provisions of Article 11, paragraph 3 of this Act, they fail to inform the Agency or

inform the Agency with delay about the receipt and content of the received notification referred to in

Article 11, paragraph 1 of this Act, and about all activities or negotiations with the offeror or persons

acting in concert with the offeror that such activities or negotiations are not taking place,

2. contrary to the provisions of Article 11, paragraph 4 of this Act, the target company fails to immediately

inform about the content of the received notification referred to in Article 11, paragraph 1 of this Act the

representatives of employees, or if they are absent, employees,

3. contrary to the provisions of Article 12, paragraph 3 of this Act, they fail to deliver without delay, at the

request of the Agency, an explicit statement whether they are acquainted with the intention of takeover,

4. contrary to the provisions of Article 12, paragraph 4 of this Act, they fail to publish in the manner set

out in Article 4 of this Act, without delay, the statement referred to in Article 12, paragraphs 2 and 3 of this

Act or if they fail to deliver such statement to the stock exchange and a regulated public market on which

the trade in the target company's shares has been approved,

5. contrary to the provisions of Article 15, paragraph 1 of this Act, they fail to provide access to the data

which refer to shareholders and shares of the target company,

6. contrary to the provisions of Article 30, paragraph 3 of this Act, they fail to deliver the notification

without delay to the target company, stock exchange and a regulated public market on which the trade in

the target company's shares has been approved and to the depository and if they fail to publish the same

notification without delay in accordance with the provisions of Article 4 of this Act,

7. contrary to the provisions of Article 33, paragraph 3 of this Act, they fail to notify, without delay, the

Agency, the stock exchange and a regulated public market on which the trade in the target company's

shares has been approved, the target company and the depository, of the withdrawal of the takeover bid,

8. contrary to the provisions of Article 33, paragraph 4 of this Act, they fail to publish within 7 days the

notification of the withdrawal of the takeover bid referred to in Article 33, paragraph 3 of this Act,

9. contrary to the provisions of Article 39, paragraph 1 of this Act, after the expiry of the period for

payment of the shares which are the subject of the takeover bid, they fail to deliver without delay the

takeover report to the Agency, target company, stock exchange and a regulated public market on which the

trade in the target company's shares has been approved, or fail to publish the takeover report within 7 days,

in accordance with Article 4 of this Act,

10. contrary to the provisions of Article 39, paragraph 4 of this Act, they fail to publish, within 7 days

from the day of receiving the notification referred to in paragraph 3 of the same Article, the notification on

the failure of the takeover bid, in accordance with the provisions of Article 4 of this Act,

11. contrary to the provisions of Article 41, paragraph 2 of this Act, they fail to present prior to publication

the opinion, within 5 days from the day the takeover bid is published, to the representatives of employees,

or directly to employees in case they do not have representatives,

12. contrary to the provision of Article 41, paragraph 3 of this Act, fail to enclose to their opinion, when

publishing it, the received opinion of the employees' representatives on the takeover bid,

13. contrary to the provisions of Article 41, paragraph 5 of this Act, fail to deliver without delay the

opinion on the takeover bid to the Agency, the stock exchange and a regulated public market on which the

trade in the target company's shares has been approved, by no later than on the same day when the

advertisers are given orders for publication,



14. contrary to the provisions of Article 43, paragraph 2 of this Act, fail to inform without delay the

Agency and the supervisory bodies of the Member States in which the trade in the target company's shares

has been approved on regulated markets, whether the target company adopted or deleted the provision of

the Articles of Association, according to paragraph 1 of that Article,

15. contrary to the provisions of Article 45, paragraph 4 of this Act, fail to notify of the request the

minority shareholders, target company, stock exchange or a regulated public market on which the trade in

the target company's shares has been approved, the Agency, or fail to publish the notification without

delay.

(4) Responsible persons of the legal person shall be also punished for infringement referred to in

paragraphs 1, 2, 3 and 4 of this Act, with the pecuniary penalty ranging from HRK 10,000 to 50,000.

STATUTE OF LIMITATIONS

Article 60

(1) The infringement proceedings for infringements set out in this Act may not be initiated after the expiry

of a 3-year period from the day on which it becomes known that the infringement has been committed.

(2) The statute of limitations shall become effective in any case after the expiry of a 6-year period from the

day on which the infringement was committed.

(3) Administered punishments may not be exercised after the expiry of 5 years from the day on which the

infringement decision becomes final.

TRANSITIONAL AND FINAL PROVISIONS

Article 61

(1) Administrative procedures relating to the takeover of public joint stock companies, initiated upon

requests for approval of a takeover bid, which were initiated until the day of entry into force of this Act,

shall be completed in accordance with the provisions of the Act on the Takeover of Joint Stock Companies

(Official Gazette, No. 84/02, 87/02 and 120/02).

(2) Persons which became obliged to publish a takeover bid in accordance with the provisions of the Act

on the Takeover of Joint Stock Companies (Official Gazette, No. 84/02, 87/02 and 120/02) and who until

the day of entry into force of this Act did not submit the request for approval of the publication of a

takeover bid, shall meet such obligation in accordance with the provisions of this Act.

(3) Provisions of this Act shall appropriately apply, in case of further acquisition of the target company's

shares, also to shareholders of a joint stock company which after the entry into force of this Act became a

target company and who, in the moment when the company becomes a target company, hold 25% to 75%

of the company's voting shares, acquired before the joint stock company became the target company.

Article 62

On the date of entry into force of this Act, the Act on the Takeover of Joint Stock Companies (Official

Gazette, Nos. 84/02, 87/02 and 120/02) shall cease to have effect.

Article 63



(1) This Act shall enter into force on the eighth day after the day of its publication in the Official Gazette,

with the exception of the provisions referred to in Article 2, item 1, subitem b); Article 2, item 8; Article

17, paragraph 1, subparagraphs 2 and 3; Article 17, paragraphs 2, 3 and 4; Article 20; Article 22,

paragraph1, items 9, 16 and 17; Article 43 to 46, Article 55 and Article 57 and 58 of this Act that shall

enter into force on the date of the accession of the Republic of Croatia to the European Union.

(2) On the date of the accession of the Republic of Croatia to the European Union the provision referred to

in Article 54 of this Act shall cease to have effect.



Class: 432-02/07-01/01

Zagreb, 5 October 2007

THE CROATIAN PARLIAMENT

The President of the Croatian Parliament

Vladimir Šeks, m.p.

ACT - pak.hrpak.hr/cke/propisi, zakoni/en/TakeoverofJointStockCompaniesAct... · EN Act on the Takeover of Joint Stock Companies HR Zakon o preuzimanju dioničkih društava and conditions

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