Austrian Court Supports EU’s Criticism of Takeover Commission

Austrian Court Supports EU’s Criticism of Takeover Commission

An Austrian court this month confirmed a ruling of the European Commission’s top court that procedures of the nation’s takeover panel violate EU law, according to documents seen by Bloomberg News.

The takeover commission’s allegations that a group of real-estate investors acted in concert -- and should have therefore filed a mandatory takeover offer for Austria’s Conwert Immobilien SE -- are “fabricated and contradictory,” the country’s administrative court said in a document dated Nov. 10.

The court’s decision, which hasn’t previously been reported, casts doubts over the future of Austria’s Takeover Commission, founded in 1999 to ensure orderly bidding processes on the Vienna Stock Exchange and enforce rules on mandatory offers.

EU Court Faults Austrian Takeover Commission’s Procedures 

“It remains to be seen what happens to the Takeover Commission. One option is of course to close the authority and subsequently transfer it into Austria’s financial watchdog FMA,” said Sebastian Mock, a professor of business law at the Vienna University of Economics and Business.

He added that most European countries, other than Ireland and the U.K., have integrated their takeover functions into their financial watchdogs.

The ruling from the administrative court comes after the EU Court of Justice in September said Austrian rules violated EU law because the takeover commission punished executives with a fine, without giving them a chance to challenge earlier findings of the same commission.

The legal woes around the takeover panel go back to its preliminary decision in 2016 that a group of investors, including real estate investor Cevdet Caner, held 31.36% in Conwert Immobilien, an Austrian real estate company, and acted in concert.

Acting in concert matters because it would mean that the shares of the investor group would be seen as as one block of above 30%, the threshold above which a mandatory takeover offer would have to be made.

Caner and the other investors, which include Adler Real Estate and Petrus Advisers, denied they acted in concert.

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