Indirect tender offers as a way to take control of a public company without reducing the subscriptions of the majority shareholder.

The structure was first invented and applied by Prof. Michał Romanowski for the purpose of the acquisition of Bank BPH by GE Money Bank from UniCredito Italiano.

The solution was applied in a situation where the selling shareholder holds a significant stake of shares in a public company (close to the second tender offer threshold, i.e. 66%), and the investor does not intend to announce a tender offer for 100% of the company's shares. In such a situation, announcing a classic prior tender offer tied to exceeding the 33% threshold (up to 66%) would entail the risk of a significant reduction of subscriptions. This would mean that the selling shareholder would not be able to achieve the transaction objective.

The use of the structure of indirect acquisition of shares in a public company makes it possible to solve this problem. In simple terms, it consists of three stages. First, the selling shareholder of a public company transfers the shares to its special purpose vehicle (the disposal of shares within a capital group does not require the announcement of a tender offer). Then shares (stocks) in the SPV are sold. There is an indirect change of control over the public company. The investor obtains control over shares that make it possible to reach a certain number of votes – potentially up to 66% minus one share. The third stage is the execution of obligations resulting from Article 73 sec. 2 of the Act on Public Offering, i.e. the announcement of a follow-up tender offer allowing the investor to reach 66% of votes. Potentially, the tender offer may be made for a minimum number of shares (even one share).

After the acquisition of Bank BPH, this solution became a permanent feature of the Polish capital market.

If the legislator raises the lower threshold for tender offers, there will be no need to use this structure.

Perhaps one of the most recent of such transactions was the acquisition of control over LPP SA by the Semper Simul Foundation in connection with the transformation of the company into a multi-generational Polish family business. Completed in December 2020, the transaction (with a total value in excess of PLN 3 billion) was one of the more complex on the Polish capital market. Romanowski i Wspólnicy was a key legal and strategic advisor on this project.