4.5  Introduction to Public Takeovers	127

4.5.2.3  Financing the Bid

Prior to the publication of the offer document, the bidder must meet all necessary requirements to satisfy the offer when the consideration becomes due. For example, in the case of a cash offer, proof must be provided that sufficient funds are available; for every cash offer an independent financial institution must confirm in writing that the bidder is indeed capable of financing the bid even if all issued shares are tendered. This confirmation must be attached to the offer document.15

In the event that a stockholder accepts the offer but then suffers a loss due to the bidder’s inability to satisfy the offer, she/he can hold the financial institution liable for any losses incurred unless, in turn, the financial institution can prove it did not know that the issued statements were incorrect, misleading or incomplete.16

4.5.2.4  Time Limits and Procedures for Notifying BaFin

Within four weeks of the publication of the decision to launch a bid or publication of the acquisition of ‘control’, the bidder must file the offer document with BaFin.17 This time-limit can, however, be extended by BaFin by up to a total of eight weeks if the bidder is unable to comply with the original time-limit, e.g. due to a crossborder offer or the necessity of a capital increase.18 Following approval of the offer document by BaFin, the document must be published on the Internet and in the electronic Federal Gazette.19 Approval can be assumed if the BaFin has not prohibited the bid within ten working days of the bidder’s submission of the offer document.20

4.5.3  Evaluation of the Bid by the Target Company

After the offer document has been published, the management board and the supervisory board of the target company must each issue a detailed statement evaluating the offer.21 Such statement(s) must comment on the type and amount of the consideration being offered by the bidder, the possible impact of the bid on the interests of the target company and its employees or their representative bodies, and the aims of the bidder. Furthermore, both boards must indicate whether or not any of their members intend to accept the bid.22 Usually, the board(s) indicate(s) if a recommendation to accept the offer to the stockholders will be issued or not.

The management board must append to its own statement any statement on the offer issued by the target’s work council.23 The members of the management board

15  See Sec. 13 para. 1 Public TakeoverAct.

16  See Sec. 13 paras. 1 and 3 and Sec. 12 paras. 2–6 Public TakeoverAct. 17  See Sec. 14 para. 1 sentence 1 Public TakeoverAct.

18  See Sec. 14 para. 1 sentence 3 Public TakeoverAct. 19  See Sec. 14 para. 3 Public TakeoverAct.

20  See Sec. 14 para. 2 Public TakeoverAct.

21  See Sec. 27 para. 1 sentence 1 Public TakeoverAct. 22  See Sec. 27 para. 1 sentence 2 Public TakeoverAct. 23  See Sec. 27 para. 2 Public TakeoverAct.