Guideline:
When determining the appropriate consideration for a takeover bid, the prices paid by the bidder for the purchase of convertible bonds must also be taken into account.
by Attorney-at-law Martin Arendts, M.B.L.-HSG
Several former Celesio shareholders had won a premium of just under 32 per cent on the 2014 takeover price at the OLG Frankfurt am Main, after they had failed before the district court. While "ordinary" shareholders only received EUR 23.50 per Celesio share, McKesson paid significantly more to Elliott, a hedge fund specializing in such special situations, who had invested in Celesio convertible bonds. While BaFin (the Geman SEC) demanded equal treatment only for securities of the same class, the Higher Regional Court in Frankfurt am Main ruled that the complaining former Celesio shareholders were entitled to so much. According to this judgment, McKesson will have to pay EUR 7.45 per Celesio share.
The Federal Court of Justice (Bundesgerichtshof) has heard the case on 7 November 2017 and confirmed the minority shareholder-friendly decision of the Higher Regional Court. In the decision reasons now published, the Federal Court of Justice joins the legal opinion of the Higher Regional Court. When determining the appropriate consideration for the takeover bid, in its opinion, the prices paid for the purchase of convertible bonds must also be taken into account. The genesis of the law speaks for a broad interpretation in the sense of a general protection against circumvention. In addition, the court refers to the meaning and purpose of the statutory provisions.
According to the relevant (but not undisputed) opinion, this procedure for the Takeover Offer also has an impact on the judicial review proceedings (as Celesio Applicants also refer to the legal opinion of the Distric Court of Cologne in the Postbank judicial review proceedings; see the squeeze-out appraisal procedure: https : //spruchverfahren.blogspot.de/2017/10/spruchverfahren-zum-squeeze-out-bei-der_46.html).
The Celesio ruling should also have considerable practical effects on similar takeover cases. "Active" shareholders may not be paid more than "passive" shareholders, even if this is "hidden" as in the case of Celesio via convertible bonds.
German version: http://spruchverfahren.blogspot.de/2018/01/bgh-urteil-zum-ubernahmeangebot-bei-der.html
When determining the appropriate consideration for a takeover bid, the prices paid by the bidder for the purchase of convertible bonds must also be taken into account.
by Attorney-at-law Martin Arendts, M.B.L.-HSG
Several former Celesio shareholders had won a premium of just under 32 per cent on the 2014 takeover price at the OLG Frankfurt am Main, after they had failed before the district court. While "ordinary" shareholders only received EUR 23.50 per Celesio share, McKesson paid significantly more to Elliott, a hedge fund specializing in such special situations, who had invested in Celesio convertible bonds. While BaFin (the Geman SEC) demanded equal treatment only for securities of the same class, the Higher Regional Court in Frankfurt am Main ruled that the complaining former Celesio shareholders were entitled to so much. According to this judgment, McKesson will have to pay EUR 7.45 per Celesio share.
The Federal Court of Justice (Bundesgerichtshof) has heard the case on 7 November 2017 and confirmed the minority shareholder-friendly decision of the Higher Regional Court. In the decision reasons now published, the Federal Court of Justice joins the legal opinion of the Higher Regional Court. When determining the appropriate consideration for the takeover bid, in its opinion, the prices paid for the purchase of convertible bonds must also be taken into account. The genesis of the law speaks for a broad interpretation in the sense of a general protection against circumvention. In addition, the court refers to the meaning and purpose of the statutory provisions.
According to the relevant (but not undisputed) opinion, this procedure for the Takeover Offer also has an impact on the judicial review proceedings (as Celesio Applicants also refer to the legal opinion of the Distric Court of Cologne in the Postbank judicial review proceedings; see the squeeze-out appraisal procedure: https : //spruchverfahren.blogspot.de/2017/10/spruchverfahren-zum-squeeze-out-bei-der_46.html).
The Celesio ruling should also have considerable practical effects on similar takeover cases. "Active" shareholders may not be paid more than "passive" shareholders, even if this is "hidden" as in the case of Celesio via convertible bonds.
German version: http://spruchverfahren.blogspot.de/2018/01/bgh-urteil-zum-ubernahmeangebot-bei-der.html
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