Good governance necessitates happy investors

Tender offer is a takeover bid in the form of a public invitation to shareholders to sell their stock, generally at a price above the market price.

Mandotary tender offer mechanism is a common practice for unwanted anti-takeovers but is also an important provision for fair price requirements. This provision limits the range of prices a bidder can pay in two-tier offers. This typically require a bidder to pay to all shareholders the highest price paid to any during a specified period of time before the commencement of a tender offer and do not apply if the deal is approved by the board of directors or a supermajority of the target’s shareholders.

In Turkey, Capital Markets Board is the only regulatory body to impose exemptions for the mandotary tender offer. According to the communiqué (Serial IV No:8 – Principles Regarding Proxy Voting and Tender Offer) in the case of existence of some specific situations, generally exemption is requested by claiming that “the acquisition of shares and voting rights of the corporation is approved at the Shareholders’ Meeting of the corporation by the quorum mentioned in the first sentence of paragraph two in Article 388 of TCC. (It is 2/3 of total)”

Although there is no time to compare this regulation with the international standards, it is widely accepted that the meaning of tender offer is crucial for minority shareholders.

In the daily bulletin of Fortis Yatırım, it says that Sekerbank (SKBNK) disclosed to the ISE that, a suit has been filed against a decision taken at the General Assembly to ask the Capital Markets Board (SPK) for an exemption from cash call on floating Sekerbank shares. Sekerbank claims that the decision on call exemption is totally legal, since it is based on the laws of Capital Markets Board and Turkish Commercial Code, hence the law suit is unjustifiable. Back in June, Sekerbank’s main shareholders Sekerbank Pension Fund and Sekerbank Personnel Social Security Foundation signed a share sale agreement with TuranAlem Securities JSC to sell a total of 33.9787% stake for YTL424.73mn, corresponding to a price of YTL10.00/share, which is currently above Sekerbank’s closing price of YTL4.84/share as of yesterday. Previously it has been announced that share transaction would be completed by Oct. 31st. Once the transaction is completed, Sekerbank Pension Fund and TuranAlem Securites, each will have 33.98% stake, while Sekerbank Personnel Social Security Foundation will have no remaining stake at the Bank.

Metin Münir in Milliyet wrote that there has been an insider trading when the deal was made. Also in the annual meeting of Sekerbank, there has been quarrel between the minority shareholders of the company. So far there is no action taken by CMB about these allegations. But there is still a room for hope in this case to preserve the rights of individual investors and shareholders.

 
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