Taking privates, i.e. launching a takeover bid for a stock-listed company and, if successful: removing it from the stock market, is an important source for potential investments of private equity funds. In Germany this entry channel faces some particular obstacles: As the German stock corporation act places particular weight on the protection of minority shareholders, a “successful” takeover is not characterized by the bidder crossing the 50% ownership threshold and then squeezing out the remaining minority shareholders not accepting the offer. Instead, several steps are required to get to full control and 100% ownership in the “endgame”, i.e. buying more shares in the market, concluding a Domination/Profit and Loss Transfer Agreement with the company and finally reaching the necessary threshold of a 90% or 95% ownership necessary for a squeeze out. During all of this minority shareholders have the opportunity to challenge the offered compensation in court. The endgame trade has evolved into an attractive investment opportunity for specialized investors (with US hedge funds among them). In this session we are discussing the strategies of such minority shareholders and their relevance for public takeovers in Germany together with the challenges for a PE bidder resulting from it.
This session is part of a broader lecture series surrounding the topic of private equity (PE).
Together with his guest Christopher Buhlmann (ParkView Partners), Prof. Dr. Bernhard Schwetzler (HHL, Chair of Financial Management) outlines peculiarities of the German legal environment and the consequences for the German takeover market. Christopher Buhlmann is a Managing Director at ParkView Partners, with extensive experience advising clients on public takeovers in Germany and other capital markets related M&A transactions. ParkView Partners is a leading German investment bank boutique for public M&A transactions.
The following topics will be highlighted and exploratively analyzed in the session:
- The role of minority protection in German corporate law and the consequences for German takeover offers
- Bidder strategies under German takeover law
- Dealing with hedge funds and “bumpitrage” strategies
- The total cost of acquisition
The event language is English.