• HUN CB published article by Dr. Kornél Komlósi, HUN CB market compliance lawyer on the effects of shares with voting rights to determine control influence in acquisitions.

Main Points

• The Capital Markets Act provisions apply to acquisitions of control of a target company.
• HUN CB has supervisory measures in its disposal against the control acquirer if a control change happens without a public takeover bid for the target company's shares.
• Shares without voting rights form part of public liability companies' capital, but due to changes in voting rights, acquisition of these shares may also result in control changes.
• Capital Markets Act provisions, protecting minority shareholders in acquisitions, should also apply to acquisitions made by an already shareholder, adding to his own shares.
• If an issuer acquires own shares, changes in the company's control must be evaluated by voting rights that can actually be practiced, voting ratios and voting limitations.
• A public liability company must disclose the last day of each month the voting rights attached to its shares, their number and series in the CB's information storage system.
• In acquisitions, the target company must also disclose these special information.
• Potential share acquirers can therefore evaluate their control influence in the target.

Supervisory Penalties

• In case of not timely disclosures HUN CB can impose penalties like the refusal for the buyer to exercise his voting rights or to order buyer to withdraw from the acquisition.
• In case of takeover bid rules breach HUN CB can impose fines of between HUF 100 thousand and HUF 2 billion on the offending acquirer of control influence in the target