Takeover bids in capital market law

The institution of takeover bid regulated under Articles 25 and 26 of the Capital Markets Law and the Communiqué on Takeover Bid No. II-26.1. Takeover bid occupy a significant position in capital markets law, as they may give rise to a change in management control in publicly held joint-stock companies or arise as a consequence of such a change in control. In this respect, the takeover bid mechanism constitutes one of the principal legal mechanisms contributing to investor protection and the orderly and stable functioning of the capital markets. Serving the purpose of protecting the interests of minority shareholders in publicly held joint-stock companies and providing them with the opportunity to exit the company at a fair price, takeover bids are classified, depending on whether the bidder’s offer to the target company is based on a legal obligation, into mandatory bid and voluntary bid. It is of importance to ensure that both mandatory and voluntary bid processes are conducted within a framework of fair and balanced rules for all parties involved. In this study, the fundamental principles of takeover bids, the operation of mandatory and voluntary takeover bid procedures, and the main issues arising from their implementation are examined with reference to the views expressed in legal scholarship, judicial decisions, and proposed solutions are put forward.