On 1 October the German parliament has passed the draft act to implement the EU directive amending the transparency directive (2013/50/EU of 22 October 2013). The draft includes, amongst other provisions, new delisting requirements.

The primary purpose of the act is the implementation of the directive, by which the notification regime regarding significant interests in public companies is being harmonised within the EU and which in particular tightens the sanctions for violations of notification duties. However, in addition the act also contains new delisting provisions, which have been submitted by the coalition parties just shortly before the Bundestag was to resolve on the act. The need for a legal regime on delistings has been discussed since the so-called "Frosta"-decision of the Bundesgerichtshof, the German federal supreme court (BGH, 8 October 2013, II ZB 26/12). In this decision the court's second senate which is competent for corporate law matters has, in line with preceding decisions of the federal constitutional court, given up its previous practice and held that a withdrawal from the stock market neither requires a compensation of minority shareholders nor a takeover offer nor an approval by the general assembly of shareholders.

Pursuant to the new wording of sec. 39 of the Stock Exchange Act (Börsengesetz) which has now been adopted, a withdrawal from a regulated market requires a takeover offer in accordance with the Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz). The compensation for the acquired shares must be in cash and must not be lower than the average stock price during the last six months, except in the event of market manipulation or delayed or false ad-hoc-announcements or if during the six months' period the stock price has been very volatile or has been quoted on less than a third of all trading days. In these cases the compensation needs to be determined by way of a business valuation. No approval by the general assembly is required for a delisting. The new provisions also apply to a move from a regulated market to an open market (downlisting).

The amendments to sec. 39 of the Stock Exchange Act will enter into force on the day following the publication of the act in the Federal Law Gazette (Bundesgesetzblatt) and will apply to applications for a delisting or downlisting made after 7 September 2015.

If you are interested in further information on this topic, please do not hesitate to contact Christine Oppenhoff.