New German Takeover Act used by Weil in Texas deal

Weil Gotshal & Manges has advised on one of the first German tender offers since the new German Takeover Act came into effect.
A team led by Geza Toth out of the London office and Liza Kroeger out of Frankfurt advised Texas Instruments Incorporated on a voluntary cash tender offer for German company Condat.
For the deal to be successful, Texas must acquire 95 per cent of all Condat shares. Condat currently owns 56 per cent, while Texas holds 16 per cent. Once Texas owns 95 per cent it plans to squeeze out the remaining minority shareholders for cash compensation.
This is only possible following the change in take-over regulations which came into effect at the beginning of the year. For the first time in Germany, it is now possible to squeeze out competition if 95 per cent of the shares are in the hands of a single shareholder.
According to Toth, this is a vast improvement. “Before, the minority protection was quite strong and this was scary for the international community because they could threaten to block an entire transaction,” he said.
“There should not be 5 per cent of shareholders trying to determine the course of a company and the changes are long overdue.”
Texas is a long-term client of Weil Gotshal in Dallas, but this is the first public deal that it has been instructed on in Germany.
Texas has a strategic interest in Condat, but in order to get control of the moneymaking division it requires, it needs to take over the whole company.
There will also be a carve-out and sale of certain divisions of the target company to the founding shareholders. According to Toth, the structure makes the deal much more complicated. “We had to build confidence that this is the right way to go. We needed client confidence that we need a public bid on the whole company,” he said.
“The structure that is now contemplated provides a win-win for all constituencies. The bidder is in a position to acquire the part of the target it wants, the founding shareholders are able to retain the initial part of Condat and the shareholders are awarded a substantial premium,” he added.
Condat was being advised by Claus Heuchemer in the Berlin office of White & Case Feddersen. However, following Heuchemer's departure from White & Case (The Lawyer, 1 April) it remains unclear who will continue to advise.