Majority shareholders forced to acquire outstanding shares

Other companies listed on the Bucharest Stock Exchange (BVB), such as the Zentiva pharmaceutical company, the Ardaf insurer, or the SCT Bucharest construction company, will find themselves in the same situation. The amount necessary for offers for the two companies part of the Rompetrol oil group was computed based on the average price between January 2007 and January 2008, according to a request sent to CNVM by the American QVT fund, minority shareholder of Rompetrol Rafinare.

CNVM published a draft instruction on Friday to clear the way for determining direct and indirect ownership. The Commission’s officials declined to provide any details regarding the price at which offers should be made, saying that the way in which the instructions will be applied will be set once the ten-day period of public debate comes to an end.

CNVM’s decision had an immediate effect on the Stock Exchange, with all these shares surging on Friday by the maximum allowed for one day of trading. Ardaf was the exception, as its shares had appreciated sharply prior to this decision.

The Commission’s management said it is awaiting opinions on the draft from both majority and minority shareholders.

“If the draft does not undergo changes from its current form, the price will be computed according to Articles 203-205 of the law of equities market. Things have not yet been set. It is not known if a retroactive price will be applied, because we have not entered the applicability details of this draft. Only once we have the opinions of minority and majority shareholders, and that of law firms, will we set the application aspects of the indications. By last night [Ed. n. Sunday] we received no official reaction, and this must happen in order to be able to set a course as fair as possible for dealing with this matter,” CNVM’s President, Gabriela Anghelache, told Business Standard.

The draft instruction issued by CNVM sets terms such as direct and indirect ownership, to bring Romanian legislation in line with European directives, which states that a public takeover offering is compulsory in the case of indirectly changing the majority shareholder.

The draft states that entities owning more than 33 percent of voting rights of a company whose shares are tradable on a regulated market, and which find themselves in one of the situations included in these instructions, must launch a public takeover offering within two months of the instructions going into effect.

“It is premature to discuss the price, as the draft is still subject to public debate. It must be approved, in case of certain companies, documents must be filed, and this can easily take a further three to six months,” said the President of the Investors Association on the Capital Market (AIPC), Dumitru Beze.