The practice of protection against hostile takeovers in the Russian Federation. Protection from hostile mergers and acquisitions

This article presents brief analysis the main means of protection against hostile mergers and acquisitions used in the world and in Russia. The possibility of applying in the Russian legal space certain means of protection used in world practice is also being considered.

The given examples from Russian practice are not exhaustive - their choice was determined by the frequency of mention in open sources of information and the compliance with the proposed classification. It should be noted that some of these protection tools can be used in everyday management practice, regardless of the threat from an unfriendly company.

The global market for cross-border and national mergers and acquisitions has been booming in recent years. The number and volume of mergers and acquisitions have increased significantly. And here Russia plays an important role1. The recent surge in mergers and acquisitions, in particular in the Russian oil and gas sector, suggests that Russia, along with the US, Japan and Europe, is becoming an equal player in the corporate M&A market.

World practice shows that in most cases mergers and acquisitions are carried out by mutual agreement of the top management personnel of both companies. However, the practice of hostile mergers and acquisitions is also not uncommon, when the management of the “target” company does not agree with the deal being prepared and implements a number of anti-seizure measures2. In this case, an organization that would like to acquire the company of interest to it, applies directly to its shareholders, bypassing the management team.

World experience in protection against hostile takeovers

In world practice, a whole system of anti-seizure measures is known, which are used by both managers and shareholders in order to counter unwanted transactions. By their nature, all anti-seizure measures are divided into economic and legal. Their combination is also possible, when the economic measure is strengthened by the legal one (and vice versa).

The main types of protection against unwanted absorption, according to general rule, are divided into those that are effective:

1. before the public announcement of the intention to take over the company;
2. after such an announcement.

Protection of the company before the public announcement of its takeover

Among the means of protecting a company from a takeover before a public announcement of a transaction, one can single out the following measures, most commonly used in the global M&A market:

1. amendments to the company's charter ("shark repellents"). Among these changes are the following:
   • rotation of the board of directors: the board is divided into several parts, while only one part is elected each year;
   • supermajority: approval of the merger transaction by the supermajority of shareholders;
   • fair price: restricts mergers to shareholders holding more than a certain percentage of shares outstanding unless a fair price (determined by a formula or an appropriate valuation procedure) is paid;
2. change of place of registration of the company. Taking into account the difference in the legislation of individual regions, the place for registration is chosen where it is easier to carry out anti-seizure amendments to the charter and facilitate judicial protection;
3. "poison pill" (poison pill) 4. Such measures are used by the company in order to reduce its attractiveness to a potential invader. For example, existing shareholders are given rights that, if a significant shareholding is purchased by an invader, can be used to acquire the company's common stock at a low price - usually half the market price;
4. issue of shares with higher voting rights. The distribution of a new class of common stock with higher voting rights allows the managers of the target company to win a majority of the votes without owning a larger share of the shares;
5. A leveraged buyout is a highly leveraged purchase of a company or subdivision by a group of private investors. The shares of a company that is bought out in this way are no longer freely traded on the stock market. When a group of investors is led by its managers in a buyout of a company, such a transaction is called a buyout of the company by managers.

Protection of the company after the public announcement of its takeover

Among the means of protecting the company from takeover after the public announcement of the transaction, we note the following:

1. Pac-Man defense - counterattack on the invader's shares;
2. litigation. Litigation is initiated against the invader for violating antitrust or securities laws;
3. merging with the "white knight" (white knight). As a takeover protection option, you can use the option of merging with a friendly company, which is usually called the "white knight".
4. "green armor" (greenmail). Some companies make a buyback offer at a premium to a group of investors threatening to take over, that is, an offer by the company to buy back its shares at a price higher than the market price (and also, as a rule, the price that the group paid for these shares);
5. management contracts. Companies enter into management contracts with their management staff, which provide for high remuneration for the work of management. This serves as an effective means of increasing the price of the company being taken over, since the value of "golden parachutes" (golden parachutes) in this case increases significantly;
6. asset restructuring - the purchase of assets that will not please the invader or create antitrust problems;
7. restructuring of liabilities - issue of shares to a friendly third party or increase in the number of shareholders, buyback of shares at a premium from existing shareholders.

Other means of protection

The means of protection against hostile takeovers listed above are only a part of those used in world practice. Others include the following:

1. "macaroni defense" (macaroni defense). The target company issues a large amount of bonds, which, according to the terms of the issue, must be redeemed ahead of schedule at a higher price in the event of a takeover of the company. Consequently, the cost of redeeming bonds increases when a company is threatened with a takeover (like pasta swells when cooked), making the takeover prohibitively expensive;
2. scorched-earth policy. A method used by the target company to make itself less attractive to the buyer. For example, it may agree to sell the most attractive parts of its business, called "crown jewels", or order the payment of all debts immediately after the merger;
3. "white armor" (whitemail). The target company sells big number of their shares in a friendly company at a price below the market price. This puts the would-be 'invader' in the position of having to buy roughly the same number of shares, but at an inflated price, in order to seize control of the company. This method helps the current management of the company to maintain its position;
4. "white cavalier" (white squire) - a broker who acquires less shares than in a controlling stake in the company.

Russian practice of protection against hostile takeovers

The Russian practice of corporate mergers and acquisitions was formed against the backdrop of an underdeveloped legal framework in the field of corporate law and the absence of historically established, evolutionary economic relations, which made hostile takeovers the most effective method of corporate strategy in Russia. In fact, the methods of hostile takeovers and the corresponding protection measures used in Russia at the initial stage of the formation of statehood have undergone certain changes only due to the development of corporate legislation. It is solely in connection with this process that some of the means used to protect against hostile takeovers may no longer be as effective as they were at the dawn of the Russian corporate market. As a result of new legislative changes, the means of protection against hostile takeovers used in Russia have ceased to be exclusively administrative in nature and are approaching the means of protection widely used throughout the world.

Below we will consider the most common economic and legal methods of resistance to a potential invader in Russia, which are used by the management (shareholders) of the "target" company:

1. the purchase of shares by companies owned by management, or the repurchase by the company of its own shares, including their subsequent sale to employees and management (of companies owned by it) to increase the share of "insiders" to the detriment of external shareholders. This strategy became widespread in Russia in the second half of the 1990s. - the actions of the management of some metallurgical enterprises can serve as an example;
2. control over the register of shareholders, as well as restricting access to or manipulation of the register of shareholders. This method is effective for complex protection measures: its use without any additional means cannot prevent absorption. An example is complex tactics- actions of one of the regional pharmaceutical enterprises. In the late 1990s the company was attacked by a Moscow pharmaceutical holding, which intended to buy a controlling stake on the secondary market, but due to complex measures, which included strict control of the shareholder register, the takeover did not take place;
3. change in the size of the authorized capital of the company, in particular, the targeted reduction ("diluting") of the share of specific "foreign" shareholders by placing shares of new issues on preferential terms among the administration and employees, as well as friendly external and pseudo-external shareholders. This method was used by almost all large companies in the oil and gas industry, primarily with the aim of consolidating, creating the most manageable corporate structure. Thus, the risk of absorption is reduced due to the coordinated actions of all structural divisions of the company;
4. involvement of local authorities to introduce administrative restrictions on the activities of "foreign" intermediaries and companies that buy up employees' shares. One example is the refusal of one of the regional administrations to sell a block of shares in a budget-forming enterprise, which was the object of an attack by a financial holding and a large metallurgical plant;
5. lawsuits to invalidate certain stock transactions supported by local authorities. A striking example of such tactics is the corporate war that has unfolded over Russia's largest timber industry facilities.

Other means of protection

The list of means of protection against hostile takeovers used in Russia is not limited to the measures described above; moreover, there are no restrictions on expanding the arsenal of methods both for conducting a takeover and for protecting against hostile corporate actions. It should be emphasized once again the Russian features of the means of protection - in addition to the measures already described, we will give a number of methods typical for Russian companies:

1. local authorities by management in case the enterprise is a budget-forming enterprise;
2. the introduction of various material and administrative sanctions in relation to employees-shareholders who intend to sell their shares to an "outside" buyer;
3. formation of dual power in the company (two general meetings, two boards of directors, two general directors);
4. withdrawal of assets or reorganization of the company with the allocation of liquid assets into separate structures, etc.

At this stage of development of the Russian market of corporate mergers and acquisitions, the national component is obvious, reflecting the peculiarities of the development of market relations in the country. Most of the means of protection against hostile takeovers used in Russia cannot be unambiguously qualified in accordance with the recognized global institutions of corporate takeovers, since not only the range of means of obtaining control over the "target" company, but also the means of protection against such a takeover are not subject to standard criteria adopted in international practice. Nevertheless, I would like to note the shift in Russian corporate legislation. The shift is definitely positive.

Note

1. Thus, among the largest mergers and acquisitions in 2003, experts distinguish the following: TNK (Russia) and BP PLC (Great Britain), Orenburgneft (Russia) and TNK (Russia), Lenzoloto (Russia) and Norilsk Nickel (Russia), Rouge Industries ( USA) and Severstal (Russia), etc. (Ernst & Young report on the market of mergers and acquisitions in Russia dated March 24, 2004).
2. Rudyk N. B., Semenkova E. V. The corporate control market: mergers, hard takeovers and debt buyouts. M.: Finance and statistics, 2000.
3. See Patrick A. Gaughan. Mergers, Acquisitions and Corporate Restructuring. third edition. university edition. John Wiley & Sons Inc. pp. 165-234; Gerard Picot. Handbook of International Mergers and Acquisitions. Preparation, Implementation and Integration. Palgrave Macmillan, 2002. Pp. 99-101.
4. The method was invented by corporate lawyer Martin Lipton, who first tried it in 1982 to protect El Paso Electric from a takeover by General American Oil.

• Monitoring the current state
• Managers Motivation

Why is it always necessary to defend against an unfriendly attack, and not when it has already begun

The development of effective measures to minimize the risk of financial and property losses from the actions of unfriendly companies is largely based on the creation of practical obstacles in the way of the aggressor.

As you know, guessing and fortune-telling about whether something will happen or not, in the matter of protecting a money-bearing asset, can lead to a complete loss of business. There are many examples of this, it is no coincidence that there are special divisions in FIGs that develop options for a hostile takeover of competing companies.

Perhaps someone will say that these are "games the mighty of the world However, this is not the case. At any level (international, regional, city) there are people ready to pick up everything that is bad. For this purpose, specialized companies are often created that receive an order to take over a particular enterprise or asset. Moreover, as a rule, such companies work for a percentage of the acquired asset, i.e. their financial interest in the positive outcome of the acquisition is obvious.

Of course, it is necessary to defend against such aggressors. However, agreeing with this need, many owners of enterprises consider it sufficient to bring their block of shares to 75% or appoint "their" general director. And then they stop paying attention to protecting their assets. And only with obvious signs of an unfriendly takeover or merger, they remember the need to build a comprehensive defense. But to what extent will it become complex and, consequently, effective? Acquisition practice and common sense show that individual measures are less effective than well-timed complex strategic and tactical defenses.

The main methods of hostile takeover

One of the basics of the tactics of military operations is the principle "Know the weapon of the enemy, be able to resist it and use it in your own interests."

Modern business in the face of fierce competition is the same war, only waged by other means. Therefore, in order to effectively build a system of protection against hostile attacks, first of all, it is necessary to determine those possible acquisition methods that can be applied to the enterprise.

The most common methods of hostile takeover in modern Russia are:

• Consolidation (purchase) of small blocks of shares
• Deliberate bankruptcy
• Purposeful reduction in the value of the enterprise and the acquisition of its assets
• Challenging ownership of strategically important assets (industrial and technological complex, subsoil use rights, etc.)
• "Purchase" of enterprise managers

As can be seen from the above list, these methods are quite diverse, and any reader who is somewhat experienced in Russian business will surely immediately recall familiar examples of the use of these absorption methods. Therefore, we do not set ourselves the task of telling about all of them, and even more so, to oppose adequate protection options to each method. We will try to give an overview of the systematic approach to enterprise protection. Systems approach involves the systematic use of a combination of many methods of defense - placing on the enemy's path the optimal (in terms of the ratio of defense effectiveness / defense costs) number of "slingshots", their use depending on the intentions and actions of potential and real aggressors.

Strategic and tactical defenses

Strategic methods of protection - methods provided for by the company's strategy (i.e., a long-term business development plan), their use causes serious organizational changes in the business management system (for example, the transition to a holding structure). These methods are used in the systematic organization of business protection, as a rule, when the attack has not yet begun and there is no real visible threat of takeover.

Nevertheless, the majority of active and dynamically developing Russian business structures, when forming their development strategy, must take into account the factor of business protection.

Strategic methods of protection include, mainly, organizational and managerial measures - building a corporate structure (the structure of organizations that are part of a holding, a group of companies), forming a system of business economic security, organizing an effective system of motivation for top managers, etc.

Tactical methods of defense are used when the attack has already begun, or when the threat of attack is already obvious. They do not require major strategic and organizational innovations. As a rule, these are legal actions.

Basic strategic defenses

As already noted, the use of strategic methods of protection requires serious organizational and managerial innovations. What are these changes in the traditional structure of medium-sized businesses? This:

• Business integration (vertical or horizontal)
• Defense through attack
• Diversification (distribution) of property and financial risks in the holding structure

The use of the first two strategic methods of protection is typical for enterprises - industry leaders. This and the spread of its power up and down the production chain. Buying up and directly capturing smaller competitors, building a production and marketing network in the regions is also one of the effective methods of protection at the strategy level.

Let's leave the market leaders and their aggressive methods of protection alone and tell you more about another common way to protect large and medium-sized businesses - diversification of property and, to some extent, financial risks. This method is based on the use of a simple worldly principle: "do not put all your eggs in one basket." In relation to the production, technological and financial complex of an enterprise, this means - do not concentrate all assets in one organization, if you attack it, you can lose everything at once.

Let's take an example of how the most "advanced" business structures operate in this direction. The holding scheme depicted in the figure is a kind of collective image of many really operating business structures. Let's see how they are organized.

Real business owners, as a rule, do not advertise their predominant participation in the authorized capital of production business units directly. They operate through specially created companies - owners. Often these companies are registered in offshore zones, because legal status and the procedure for registering an offshore company in some jurisdictions allows not to disclose information about the composition of shareholders (members) of this organization. There are also exotic examples of registration in Russia under nominees of a company-owner with the same goal - to keep information about the real owners of the business secret.

Owning companies (and there are two types - owners of blocks of shares and intangible assets, and owners of capital-intensive and most liquid property) do not themselves conduct any financial and economic activities, which allows minimizing the risk of their capture through the concentration of accounts payable or by imposing liability for the activities of the production business units of the holding. They only determine the key appointments in the management company and exercise control over the use of the holding's main assets.

The direct management of the holding's activities is carried out by a specially created management company, which exercises its power in relation to production business units and service companies through an agreement between the management company and the subsidiary. This agreement defines the division of powers and responsibilities between the management company and the subsidiary, defines the mechanism for coordinating and making decisions on key aspects of activity. Depending on the distribution of powers that have taken place, the degree of centralization / decentralization of management in the holding is determined.

At one time (in the mid-1990s), during the period of the most active corporate construction, a scheme of over-concentration of powers in the holding's management company was widespread in the Russian raw material industries. This scheme was implemented by transferring the powers of the executive bodies of the subsidiary to the management company (Article 103 of the Civil Code, Article 69 federal law"On joint-stock companies"). Thus, all legally significant actions on behalf of the subsidiary were carried out directly by the management company. On the one hand, this made it possible to concentrate power over business in one hand, on the other hand, it made it difficult to manage the operational management of territorially remote business units. As the system of corporate management of raw materials holdings was being built, the oil and metallurgical "wars" subsided, most of the integrated structures switched to a less centralized management model, although there are still cases of applying the scheme of over-centralization of powers.

In addition to the actual production business units, the holding structure includes service companies serving commercial and auxiliary functions. In some industries with a significant movement of personnel (for example, in construction), Lately it is customary to create specialized personnel companies that, from the point of view of the risk distribution scheme, bear the burden of responsibility for relations with the labor collective, trade unions and regulatory authorities (state labor inspectorate, immigration services, etc.). In recent years, a popular trend in the oil and gas industry has been the creation of service companies for production drilling and workover of wells, which, again from the point of view of the protection scheme, allows the distribution of ownership of the most capital-intensive assets.

The use of service companies serving commercial functions (as a rule, sales and supply) allows you to separately control the material and financial flows of an enterprise, organize a protective buffer in the way of an aggressor who attacks through the concentration of accounts payable.

Let's consider two examples of using a risk sharing scheme in the interests of an average Russian enterprise operating, for example, in the food industry. With protection method 1, the production business unit "Plant" is protected from external counterparties by two buffers - Trading house "Snab" and Trading house "Sbyt", which provides the necessary protection, and also allows you to flexibly vary the flow of financial resources between holding organizations. With protection method 2, the production business unit with the conditional name "Operating activities" directly interacts with external counterparties, i.e. is at risk of capture through the concentration of accounts payable, but its most "tasty" assets are isolated in companies - owners that do not conduct current activities.

Tactical defenses. a brief description of

When applying tactical methods of protection, serious strategic and organizational innovations are required. However, for them effective application the ground must be prepared in advance in the form of a system of internal documents of the enterprise that regulate the emergence of rights and the assumption of obligations. When forming such a package of documents, special attention should be paid to the following areas:

• regulation of the formation and activities of governing bodies
• regulation of transactions with shares
• current state monitoring system

Let us dwell in more detail on the most significant aspects of tactical methods of protection against hostile takeovers.

Regulation of the Formation and Activities of Governing Bodies as a Way of Reasonably Restricting the Powers of Governing Bodies

Successful protection against hostile takeovers and mergers is based on confidence in the clear and well-coordinated work of society as a whole, its governing bodies and managers as the main driving force that overcomes any encroachment. Internal lack of control, vagueness in the delimitation of powers or excessive inertia in decision-making can in themselves lead to negative consequences, and if they are present during the attack of the aggressor, the ship will sink without even having time to fight.

The legal basis for the protection of the company should be scrupulously developed internal documents (the Articles of Association, Regulations on the governing bodies, the Agreement with the Management Company, etc.) corresponding to the chosen protection strategy. Often, these documents are treated as an unpleasant formality, repeating the imperative norms of corporate law in them. Business owners often do not take into account that in the event of a threat of a hostile takeover, they may simply not have enough time to eliminate contradictions in documents and make the additions necessary for organizing protection. Modern Russian business has recently “stepped over” a ten-year milestone in its development, and history already knows a lot of cases when former friends and partners, having decided to divide up a business, enter into such a clinch that they create the most favorable ground for an aggressor to attack. And mainly why? Because in advance they did not bother to clearly define the procedure for making strategic decisions about the fate of the business, the procedure for exiting the business, the procedure for determining the price of the ceded share in the business.

First of all, you should pay attention to the following key points when developing a package of internal documents of the company. In an unfriendly takeover, the aggressor seeks to gain operational control over the enterprise. For this purpose, a change of governing bodies is being carried out. Most often, attempts to change are carried out even before gaining control over even half of the company's shares. The current joint stock legislation provides for alternatives regarding the body competent to elect the general director or the chairman of the board of directors. If the right to elect them is attributed to the competence of the general meeting, then it will not be enough for the aggressor to obtain operational control to enlist the support of half of the members of the board of directors, it is required to convene a general meeting of shareholders. And if we additionally provide for the election of the board of directors by cumulative voting, then the term for holding an extraordinary general meeting can be postponed from 40 days to 70. In terms of protection, an additional month may not be superfluous at all.

During the takeover of one company, the aggressor managed to negotiate with several members of its board of directors, offering them guarantees for the extension of their powers under the new owner. However, the aggressor could not remove the general director and seize the operational management of the company, since in its charter the election of the general director and members of the board of directors was referred to the competence of the general meeting.

Of course, at the request of members of the board of directors, an extraordinary general meeting of shareholders was convened. But the charter provided for the election of the board of directors by cumulative voting, and the period for holding an extraordinary general meeting was automatically moved from 40 days to 70. In the issue of protection, an additional month played a decisive role. During this time, the company has taken a number of actions, including an exemplary purchase of its shares at an inflated price, which actually blocked the subsequent increase in the aggressor's shareholding, and work was carried out with shareholders. After an extraordinary general meeting was held, which did not re-elect unfriendly members of the board of directors and confirmed the powers of the acting general director, the company's stake was bought back from the aggressor at an acceptable price.

In this regard, it is reasonable to talk about the adoption of a charter that protects against takeovers. A charter protecting against takeovers is a collective term denoting a whole range of measures that exclude the possibility of an aggressor using common mistakes and provide additional features procedural protection.

Ways to reasonably limit the competence of the General Director and managers of the company

One of the most common types of hostile takeovers is the purchase of accounts payable. And in this regard, the eternal question of the main shareholder of the company will be - does the management act in the interests of the company and does it make decisions on concluding transactions with due diligence?

The current legislation allows shareholders to legitimately restrict the capabilities of individual officials, in particular the CEO, in order to avoid accidentally or deliberately creating an unfavorable situation in society.

First of all, this is a direct indication in the Charter of additional restrictions on transactions by their size (the option of restrictions by types of transactions, by counterparties is not excluded). The sole executive body under the current legislation independently concludes transactions up to 25% of the book value of the company's assets. In order to establish greater control over its activities, it can be limited to 5-10%, etc. This is especially expedient with a significant balance sheet value of assets or in the presence of several technologically interconnected, but legally separate industries.

The competence of the general director in the implementation of transactions can be limited through a change in the structure of management bodies. In companies where the presence of a board of directors is not mandatory, it is possible to introduce this body and transfer part of its powers to it. In medium and large companies, the powers of the executive body are redistributed between the CEO and the board. The creation of a board of directors and a board of directors also makes it possible to use such a tactical method of protection as the bureaucratization of the decision-making procedure in society. As already mentioned, it is possible to transfer the powers of the general director of the management company.

The procedural issues of making decisions that are strategically important for society should be clearly regulated in the regulations on governing bodies and in such an extremely important document for any commercial organization as the Regulations on the procedure for concluding contracts. The correct alignment of the management process of concluding an agreement and its clear legal regulation allows in most cases to avoid the threat of actions by the management and employees of the company in the interests of the aggressor (accept the terms of the transaction that are enslaving for society, provide an easy opportunity for the aggressor to buy up the obligations of the company, etc.).

Creation additional protection through a reasonable distribution of powers between the company's management bodies, limiting the uncontrolled powers of management, does not allow an unfriendly company to force the company's managers to conclude a deal or make a decision that does not correspond to the interests of the company. In fairness, it should be said that such restrictions will not be able to fully save society from the actions of an unfriendly CEO. But even in such an extreme situation, he will not deprive the enterprise of the most significant asset in one hour and will not concentrate significant accounts payable with an unfriendly company.

Stock transactions as a high-risk area

The most popular way to gain control over a joint-stock company is to buy its shares. When building takeover protection through the consolidation of blocks of shares, special attention should be paid to the minimum necessary requirements presented in this regard to the charter and to the registrar of the company.

In the practice of corporate warriors, where the resolution of a conflict goes beyond negotiations and all available means of attack and defense are used, there are very often cases of challenging the decisions of the governing bodies on the basis of non-compliance with the decision-making procedure. Since the options for contesting on such grounds are diverse, it is necessary to impose additional requirements on the charter of the company, in particular, regulate:

• the procedure for notifying shareholders and the Company about the offer of shares for sale (for CJSC);
• the procedure for the acquisition by the Company of unredeemed shares;
• the procedure for making a decision to increase the authorized capital (declared shares);
• the procedure for converting equity securities into shares.

But, having developed and adopted the most protective charter, there is no need to make elementary mistakes. The real owner of the business legally registered the company for another individual. While the business was not large, there were no questions. With the advent of good profits, the official shareholder began to demand more and more sums under the threat of selling the business, to the creation of which he had only an indirect relationship. To the credit of the real owner, he decided to get out of this situation with the help of lawyers. A scheme was developed to create debt from the official shareholder for his personal obligations, and the shareholder transferred the entire block of shares to pay off debts.

A separate issue of protection is the choice of a registrar. Societies do not always transfer their register to a professional registrar, when this is not directly required by law. But when state bodies (be it the prosecutor's office or the Ministry of Internal Affairs with their new powers, it doesn't matter) come to an enterprise with a custom-made "check" and, based on an extended list of documents that they have the right to request, demand that a register of shareholders be submitted, one has to come up with formal grounds for refusal. When the register of a joint-stock company is transferred for maintenance to a well-verified specialized registrar, one can fully expect that during the verification he will refer to an exhaustive list of grounds for disclosing such information.

We should also not forget that the use of a specialized registrar for the main owner of a joint-stock company is an additional way to regulate transactions with the company's most liquid asset - its shares and a way to reasonably narrow the uncontrolled powers of top management.

When choosing a registrar, a cautious owner will definitely check:

• whether it is a well-known company with a good reputation in the securities market;
• whether the registrar will provide an opportunity to obtain operational information on the movement of the company's shares;
• whether it is independent of potentially hostile structures.

Monitoring the current state

When buying up the most interesting assets, many aggressors act according to the principle: "Why buy an enterprise if you can buy its management?" Indeed, if an effective system of independent monitoring of its financial and economic activities (in other words, a system of business economic security) has not been built at an enterprise, it will not be so difficult for an aggressor to implement this principle.

The monitoring system is traditionally implemented through the creation of the current monitoring service itself (economic security service) and the control and audit service, whose tasks include conducting comprehensive audits of compliance with the management procedures established at the enterprise.

Managers Motivation

When creating a defense system, one should not get too carried away by the principle "Drag and don't let go", widely known in Russia. The system of total bureaucratization of management procedures and strict control over their observance cannot by itself provide effective business protection. Excessive complication of procedures can reduce the manageability of the business by reducing the efficiency of decision-making, and will irritate top managers and key specialists.

The basis of any team management system is the correct motivation of managers and leading specialists. It is they who make up the core of the company and largely determine the success of this business. Therefore, one of the effective mechanisms for protecting business is the creation of a motivation system that orients the company's management towards the growth of the value and efficiency of the business. In the Western business community, partnership schemes for top managers and key business specialists (options, deferred income mechanisms, "parachutes") are widespread. In modern Russia, these mechanisms are almost never used, which, in our opinion, indicates rather an insufficient development of the culture of corporate governance than the fundamental impossibility of using these schemes on domestic soil.

Ways of active counteraction

Any method of active counteraction must be built on the basis of the aggressor's strategy of action. Therefore, all actions of society aimed at repelling aggression can be conditionally divided into:

• Emergency share buyback from minority shareholders;
• Additional placement of shares by closed subscription;
• Emergency restructuring, asset withdrawal;
• Target redemption of their shares from the aggressor;
• Buying shares or other assets of the aggressor for the purpose of subsequent exchange;
• "White Knight" - leaving under the protection of a stronger player than the aggressor;
• "Reincorporation" - re-registration of a company in another region;
• Litigation (or disputes for any reason).

We plan to cover in detail these and other practical methods of active countermeasures used in domestic conditions in the next publications. We hope that the approach to the organization of complex protection against hostile takeovers proposed in this article has helped you put all the most common methods of protection into a system. With the next adjustment of the business strategy, you will not forget to take into account the issues of its effective protection. When forming a protection system, we suggest you use the old, like the world rule "He who is forewarned is armed."

L.L. Nikitin,
Director of Consulting Department, ACF "Modern Business Technologies"
D.V. Nurzhinsky,
Head of Legal Expertise Department, ACF "Modern Business Technologies"

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Ministry of Education and Science of the Russian Federation

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"Vladimir State University

named after Alexander Grigorievich and Nikolai Grigorievich Stoletov"

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Methods of protection against hostile takeovers: foreign experience and Russian practice

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Sapozhkova Dina Vladimirovna

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Associate Professor of the Department

Roberts Marina Vyacheslavovna

Vladimir 2015

Introduction

2.1.1 Acquisition (purchase) of shares of the target enterprise

2.1.2 The takeover of control in society

2.1.3 Establishing control over the enterprise through bankruptcy proceedings

2.1.4 Using the manipulation technology "white knight"

2.1.5 Illegal actions of the invading company

2.2 Impact of hostile takeovers on securities market participants and the economy as a whole

2.3 Information technologies for maintaining the register of shareholders and measures for protection software registrar from unauthorized access

Chapter III. Ways to protect against hostile takeovers: international experience and Russian practice

3.1 Methods of protection against hostile takeovers used in international and Russian practice

Conclusion

Bibliography

Introduction

The takeover market, which is one of the key external corporate governance mechanisms, began to develop dynamically in Russia around the mid-1990s and has been intensively increasing its momentum since then.

But, despite the abundance of legally permitted types of company reorganization, actual mergers or friendly acquisitions based on agreed transactions and civilized business methods have not yet become a noticeable phenomenon in Russian practice, since this form requires a highly developed capital market.

On the contrary, it is precisely "hostile takeovers," that is, the corporate control market itself, that have received the greatest development in Russia. Obviously, this combination of circumstances is not accidental, since "the majority of the share capital of Russian companies is concentrated in sedentary large blocks of shares," thereby making the process of taking over control in a company much easier.

According to the chairman of the board of directors of Ilim Pulp, Zakhar Smushkin, "hostile takeovers in Russia are when one of the parties wants to seize assets or acquire them at a price significantly lower than the market price." The main reasons why hostile takeovers are widespread in Russia lie in the imperfection of the legislative framework, corruption, and the mentality of Russian business. The negative impact of hostile takeovers on the country's economy can hardly be overestimated, "a wave of hostile takeovers leads to low capitalization of Russian companies and hinders investment in the real sector," said Andrey Sharonov, Deputy Minister of Economic Development and Trade of the Russian Federation.

The relevance of the topic "Protection against hostile takeovers: theory and Russian practice" is explained by the fact that recently in Russia there have been a number of events related to corporate conflicts and "seizure of control" at Russian enterprises, the number of publications about which in the media cannot be counted. According to the magazine Mergers and Acquisitions, in 2002 alone there were 1,870 takeovers in Russia, of which more than 1,400, that is, more than half of all takeovers, were hostile. However, by no means always do "hostile takeover" deals become public knowledge, and even more so, as a rule, the methods and methods of "capture" and protection against them remain in the shadows.

After all, not every enterprise not only does not know what methods of protection should be applied in relation to a specific attack by an invading company, but it is also not always able to recognize an enterprise attack that has begun with the aim of a hostile takeover by elementary signs.

In this regard, the purpose of this course work was an attempt to most clearly and fully analyze the known forms and methods (methods) of hostile takeovers used in international and Russian practice, as well as the possible and most effective ways to protect against them. This is especially interesting due to the fact that in our country, as often happens, international experience is used very creatively, being significantly modified in accordance with the requirements of Russian legislation.

In this regard, it is necessary to highlight those tasks that will help to conduct a study of the topic devoted to hostile takeovers and protection against them:

· identification of the global state of the acquisitions market;

· study of the theoretical and legal basis for the functioning of the takeover market;

· determination of the market specifics of "hostile takeovers" and their differences from mergers or friendly takeovers;

Identification of signs of a hostile takeover operation that has begun;

· analysis of the use of hostile takeover methods used in international practice by Russian "invading enterprises";

· analysis of the impact of hostile takeovers on the economy of the country as a whole and individual participants in the securities market;

· description of a comprehensive strategy to protect against an attempted hostile takeover on the example of a Moscow enterprise.

To write the work, such works of modern Russian authors as "Corporate takeovers: mergers, acquisitions, greenmail" by M. G. Iontseva, "Joint-stock company against a shareholder" Gololobova D.V., "Corporate control market: mergers, acquisitions, and greenmail" were used. redemption by debt financing" Rudyk N. and Semenkova E.V. and other authors.

In addition, the work reflected articles from periodicals of magazines: "Mergers and Acquisitions", "Securities Market", "Economic Issues", "Journal for Shareholders", "Expert" and others, newspapers "Vedomosti", "Kommersant "," Economics and Life ", as well as information in Russian and English from Russian and foreign Internet sites.

Chapter I. Theoretical and legal foundations for the functioning of the market for mergers and acquisitions of businesses

1.1 The concept and specifics of hostile takeovers and their differences from mergers and friendly takeovers in international and Russian practice

An analysis of the general state of the global mergers and acquisitions market allows us to draw conclusions about the negative dynamics of their development, which was caused by a slowdown in global economic development, primarily stagnation in the world's leading business centers. USA and Europe.

According to Dealogic and KPMG, the number of completed deals by the end of 2003 decreased by 25% from 20,954 in 2002 to 15,662 deals in 2003. In contrast to the global trend in Central and Eastern Europe (excluding Russia and the CIS countries ) there is a slight increase in the total value of mergers and acquisitions in 2003 compared to 2002. Even more impressive is the growth of the M&A market in Russia, with the size of transactions in the Russian market already such that they have entered the list of the largest in the world. According to Thomson Financial, in the first nine months of 2003, the total volume of mergers and acquisitions grew nine times to $30.4 billion, which put Russia in fifth place in Europe in this indicator.

Top 10 international deals completed in 2003.

Buying company		Acquired company		closing date	Transaction value, mln USD
		Telecom Italia SpA (59.65%)
		Siberian Oil Company OAO "Sibneft" (92%)
	Great Britain	Household International
	Great Britain
		MobilCom (UMTS Assets . 90%)	Germany
		MedcoHealth Solutions (80.1%)
Edizione Holding		Autostrade (54.8%)

Source: Dealogic 2003

However, against the background of the growth of the mergers and acquisitions market, there are still a lot of cases of abuse in Russian practice - especially in the sphere of small and medium-sized businesses, as well as at the regional level. According to the magazine Mergers and Acquisitions, in 2002 alone, 1,870 takeovers took place in Russia, of which more than 1,400 were hostile. Until now, some conflicts of a national scale related to the forcible seizure of enterprises continue, for example, in the forestry industry - the conflict between Ilim Pulp and Basic Element for control over the Kotlas Pulp and Paper Mill and the Bratsk Forestry Complex. So far, the corporate culture has managed to penetrate only some of the largest companies focused on cooperation with Western investors.

The Western market is also not far behind in terms of hostile takeovers. In 2003, the value of such deals tripled ($48 billion, up from $16 billion in 2002), in part due to several large hostile takeover bids. Examples include ArvinMeritor's bid for Dana Corp, Alcan's bid for Pechiney, and Oracle's bid for Peoplesoft.

The first isolated experience of hostile takeovers in Russia, carried out through public transactions in the secondary market, dates back to the mid-1990s. A fairly well-known, albeit unsuccessful, attempt to publicly conduct a hostile takeover operation was an attempt to seize the Krasny Oktyabr confectionery factory in the summer of 1995 by the Menatep bank group. Another, no less famous example, is the purchase by the Inkombank holding of a controlling stake in the confectionery JSC Babaevskoye. In the same period and later, many of the largest banks, financial groups and portfolio investment funds practiced hostile takeovers of companies in a wide variety of industries. In this regard, it is necessary to single out Alfa-Bank and Alfa-Capital, on whose account dozens of mergers and acquisitions have been made since 1992. Also in 1997-1998. in the food industry there are examples of takeovers of regional breweries by the Baltika group. And these are only the most famous cases, not counting all the other numerous examples of hostile takeovers that did not become available in the media or those that took place later. Such companies as "Rosbuilding", "Accept - RK" Financial Company, and "Your Financial Trustee" have participated in recent corporate wars, while the takeovers carried out by these companies are far from the civilized market of mergers and acquisitions. Oleg Brezhnev, financial director of the Accept company, openly comments: "This is a normal business. We are 'cleansing' the city of unprofitable, non-core business. In addition, such a business is 10 times more profitable than trading in securities."

The reasons for the emergence and further development of the hostile takeover market in Russia are the specifics of the processes that took place in the country, as well as the ownership structure of Russian companies and their participants:

In the post-privatization period, many enterprises lost their long-established economic ties with suppliers and buyers of their products. The newly formed financial and industrial groups needed to occupy their niches in the market, develop and diversify their business structures, and the best way was the takeover of counterparties, which, as a rule, were unfriendly;

ь concentration of the share capital of the majority of Russian companies in large blocks of shares (acquisition operations practically do not affect the stock market, and blue-chip companies are the least likely to become the object of hostile takeovers);

l minority shareholders of the target company play a passive role and cannot act as full-fledged participants in the corporate control market;

l the existence of companies and enterprises whose shares are distributed among numerous labor collective, which, in the event of a long-term absence of wage payments, exacerbates the possibility of involving the employees of the enterprise in a hostile takeover operation, through an offer from the company. a high buyback price grabber;

ь the presence of capturing companies that, when gaining control over an enterprise, do not set the task of developing it, increasing capitalization and efficiency, but are initially aimed at reselling its assets, since the costs of implementing a hostile takeover are significantly lower than buying an organization at its real value, if such purchase is generally possible;

ь the presence of "gaps" in Russian legislation, as well as the existence of legal acts that contradict each other in terms of some definitions;

ь lack of corporate governance practices in the majority of Russian enterprises;

All of the above characteristics of the Russian market contributed to the fact that Russia was characterized by the predominance of hostile takeovers and rare cases of voluntary, friendly takeovers, typical of continental Europe even before the 1990s.

Russian legislation establishes the following forms of company reorganization: merger, acquisition, division, separation and transformation.

It should be noted that in foreign practice, the definitions of "merger", "acquisition" and "accession" have a number of discrepancies with the definitions established by Russian legislation, which is due to a number of factors:

1. Differences are objectively predetermined by the elementary borrowing of Anglo-American terms that do not have an unambiguous interpretation.

2. Many features stem both from national business practices and from differences between "academic", "legal" and "business" interpretations. The lack of terminological unity is also associated with certain features of national legislation. In Russia, for example, the discrepancy between the types of reorganization legally formalized in the Civil Code of the Russian Federation and economic processes described in terms of "mergers" and "acquisitions" is quite obvious.

A merger in Russian legislation is understood as the termination of the activities of two business entities, all property, rights and obligations of which are transferred to the newly created new company. The most obvious examples are the merger of two giants of the international consulting business - PriceWaterhouse and Coopers & Lybrand, which resulted in the formation of PriceWaterhouseCoopers, as well as the merger of the Tyumen Oil Company (TNK) with Western British Petroleum and the formation of TNK-BP.

In foreign practice, a merger is defined as a merger of two companies, in which one of them loses its brand. A merger in foreign practice can also be understood as the merger of several firms, as a result of which one of them survives, while the rest lose their independence and cease to exist. In Russian legislation, this case is described by the term "connection".

Thus, according to Russian legislation, a merger is a situation when the merging company ceases to exist, is liquidated, and all its rights and obligations are transferred to another, as a rule, larger and "stronger" company.

Some authors use the term "merger" to mean the whole range of mergers and acquisitions: friendly takeover, "hard" (hostile, hostile) takeover, purchase of all or major assets of the target company (without merging, that is, from the target company in this case only the "shell" and cash from the sale of assets remain).

There is also an opposite approach, when all relevant operations are combined by the term "acquisition". As E. Chirkova notes, traditionally in the literature on corporate finance there are three types of takeovers: voluntary mergers based on negotiations with the management of the acquired company and subsequent purchase (exchange) of shares; hostile takeover by means of a tender offer to purchase shares directly to the shareholders of the company; obtaining control over the board of directors without purchasing a controlling stake in the share capital through proxy voting (proxy contests, proxy fights).

The term "acquisition" is not fixed by law in Russia. But in the periodical literature, the concept of "acquisition" is often defined as "a business purchase transaction in which the acquiring company either completely absorbs the acquired firm (and the latter ceases to exist), or is limited to purchasing a controlling stake (and the acquired firm becomes a subsidiary)". However, it must be said that the opinions of many authoritative Russian experts in the field of mergers and acquisitions are reduced to a distinction between the concepts of "merger" and "acquisition". The difference is explained by the fact that in the event of a merger, the owners of the acquired company receive a share in the new company, while in the case of an acquisition, the acquiring company buys all or most of the shares from the shareholders of the acquired company. In the latter case, the acquiree's owners do not receive a share in the combined company. In this case, the Yukos-Sibneft deal can be cited as an example, in which OAO Oil Company Yukos acquired a 92% stake in OAO Sibneft.

The issue of a clear definition of the term "hostile takeover" is purely debatable, and there are many interpretations on this score, both domestic and foreign, which cannot be considered mutually exclusive. Most often, a hostile takeover is understood as a situation where the buyer makes a tender offer directly to the shareholders. As a rule, such a development of events occurs as a result of the fact that negotiations with the management of the company - the target of the takeover - were unsuccessful. It is important to note that this form of takeovers was widespread in Russia, while in the United States in the 1980s. about half of the acquisitions were friendly acquisitions, that is, the terms of sale were based on a preliminary agreement between the corporation-buyer and the management of the target company.

In this regard, two groups of acquisitions can be distinguished:

1. The company - the buyer makes a tender offer to buy out 95 -100% of the shares of the target company. In this case, this is a friendly takeover or friendly takeover;

2. The company - the buyer makes a tender offer to the shareholders of the company - the target to buy out a controlling stake in ordinary voting shares, without informing the management of the target company about this. This is already an unfriendly takeover or hostile takeover.

A tender is an offer made to the shareholders of another company to acquire its shares at a fixed price per share. Typically, the tender price is set at a level well above the current market price of the share in order to attract more shares.

Foreign practice defines the concept of "hostile takeover", as a rule, as an unwanted takeover, not confirmed or approved by the management and the Board of Directors of the company - the goal.

It should be noted that a hostile takeover will be successful if the capturing company manages to buy at least a controlling stake target companies namely 50% and 1 ordinary voting share.

Nevertheless, it is important to note that Russian legislation also does not define the concept of "hostile takeover" in any way, and effective legislative mechanisms for counteracting this process, in contrast to international practice, are also ignored. And this is quite understandable, because the very concept of "hostile takeover" already carries in itself aggressiveness and, as a result, illegality. But in order to prevent the development of such processes in the country, the legislative consolidation of at least the main signs by which it is possible to determine the beginning of the "attack" of the enterprise; basic ways and schemes to protect against them, it is essential that all business units - potential victims of hostile takeovers - be sufficiently aware and prepared in case of a surprise attack.

1.2 Legal regulation of the mergers and acquisitions market in Russia and the main shortcomings of Russian legislation

The basis for regulating reorganization processes in Russia are the following legal acts:

· Civil Code of the Russian Federation

Federal Law "On Joint Stock Companies"

Federal law "On the securities market"

· Decree of the Federal Commission for the Securities Market "On standards for the issue of securities and registration of securities prospectuses" No. 03-30 / ps

Law "On Competition and Restriction of Monopolistic Activities in Commodity Markets" No. 948-1

Law "On protection of competition in the financial services market" No. 117-FZ

With regard to hostile takeovers, which have become widespread in Russian practice and are directly related to the topic of this work, it is necessary to additionally highlight the following legal acts (used both for the purpose of taking over an enterprise and for finding ways to protect against it), such as:

Arbitration Procedure Code of the Russian Federation

Civil Procedure Code of the Russian Federation

· Criminal Code of the Russian Federation

Federal Law "On Bankruptcy" No. 127-FZ

Law "On Enforcement Proceedings" No. 119-FZ

Decree of the Federal Securities Commission of the Russian Federation No. 934 "On approval of the procedure for seizing securities" dated 12.08.1998

Decree of the Federal Commission for the Securities Market of the Russian Federation No. 27 "On the procedure for maintaining the register" dated 10/02/1997 (as amended on 04/20/1998)

· Decree of the Federal Commission for the Securities Market of the Russian Federation No. 17 "On additional requirements for the procedure for preparing, convening and holding a general meeting of shareholders" dated May 31, 2002

· and others

The Civil Code of the Russian Federation establishes the foundations for the reorganization of legal entities. Article 57 establishes the forms of reorganization, which include, among other things, mergers and acquisitions. Also, Article 57 of the Civil Code indicates possible prohibitions on reorganization by the authorized state body and at the moment from which a legal entity is considered reorganized.

On the next level legal regulation are the Federal Laws "On Joint Stock Companies" and "On the Securities Market".

The reorganization of joint-stock companies falls under the jurisdiction of the Federal Law "On Joint-Stock Companies", which expands and specifies the forms of reorganization and describes each of them in accordance with its features, which will be discussed later, as well as the law determines the rights and obligations * of shareholders depending on their share in the authorized capital of the company, including those taking place during the reorganization of the company.

Rights and obligations of shareholders depending on the share of participation in the authorized capital of the company.

	Rights, obligations and opportunities of a shareholder	Base
	The right to familiarize with the list of persons entitled to participate in the general meeting of shareholders	Clause 4, Article 51 of the Federal Law JSC
	The right to obtain from the registrar information from the registry system containing the names of the owners (names), the number, category (type) and nominal value of the shares they own	Decree of the FCSM dated 02.10.1997 No. 27, clause 7.9.1
	The right to apply to the court with a claim against a member of the Board of Directors, a sole or collective executive body, as well as against a managing organization or a manager for compensation for losses caused to the company by their guilty actions (inaction)	Clause 5, Article 71 of the Federal Law JSC
	The right to put issues on the agenda of the annual general meeting of shareholders and nominate candidates to the Board of Directors, the collegial executive body, the audit commission, a candidate for the position of the sole executive body. The right to make formulations of the decision on the proposed issues.	Clause 1.4, Article 53 of the Federal Law of JSC
	The right to propose candidates to the Board of Directors for election at an extraordinary general meeting of shareholders if the agenda for the meeting contains the issue of electing members of the Board of Directors by cumulative voting	Clause 2, Article 53 of the Federal Law JSC
	The decision to approve a transaction for the acquisition of more than 2% of ordinary shares placed or sold by the company, if the acquirer is an interested person, is taken by the general meeting by a majority vote of shareholders not interested in this transaction	Clause 4, Article 83 of the Federal Law JSC
	The right to demand the convening of an extraordinary general meeting of shareholders, the right to include issues on the agenda of the meeting and the right to nominate candidates to the management bodies of the company.	Art. 55 FZ JSC
	The right to convene a meeting in the absence of a decision of the board of directors or the refusal of the board of directors to convene a meeting. At the same time, the shareholders convening the meeting acquire the powers of the Board of Directors in terms of convening and holding the general meeting of shareholders.	Clause 8, Article 55 of the Federal Law JSC
	A shareholder who owns 20% or more of shares is considered to be interested in the company's transaction in which he is a party, beneficiary, intermediary or representative	Clause 1, Article 81 of the Federal Law JSC
	Acquisition by a person (group of persons) of more than 20% of voting shares with the prior consent of the antimonopoly body. Prior consent to the purchase of shares is required if the total book value of the assets of the issuer, seller and buyer exceeds 200,000 minimum wages.	Federal Law "On Competition and Restriction of Monopolistic Activities in Commodity Markets"
	The ability to block the adoption of decisions by the company in cases where at least ½ votes must be given for the adoption of a decision at a general meeting
	The right of access to accounting documents and minutes of meetings of the collegial executive body	Clause 1, Article 91 of the Federal Law JSC
		P. 3 Art. 58 FZ JSC
	Persons who intend to acquire 30% or more of the placed ordinary shares in a company with a number of shareholders. owners of more than 1,000 ordinary shares, must notify the company of its intention, and after the acquisition, offer other shareholders to sell their shares.	Article 80 of the Federal Law JSC
		Clause 1, Article 58 of the Federal Law JSC
	The decision of the meeting on the issue put to the vote is taken by a majority of votes, except for cases when at least ½ votes are required for the decision to be made.	Clause 2, Article 49 of the Federal Law JSC
	Placement of shares through closed subscription	Clause 3, Article 39 of the Federal Law JSC
	Placement through open subscription of shares, constituting more than 25% of previously placed ordinary shares	Clause 4, Article 39 of the Federal Law JSC
	Amendments and additions to the charter of the company or approval of the charter of the company in a new edition	Clause 1, Article 48 of the Federal Law JSC
	Society reorganization	Clause 1, Article 48 of the Federal Law JSC
	Society liquidation	Clause 1, Article 48 of the Federal Law JSC
	Determining the number, nominal value, category (type) of declared shares and the rights granted by these shares	Clause 1, Article 48 of the Federal Law JSC
	Acquisition of outstanding shares by the company	Clause 1, Article 48 of the Federal Law JSC
	Decision to approve a major transaction, the subject of which is property, the value of which is more than 50% of the book value of the company's assets	Clause 3, Article 79 of the Federal Law JSC
	Adoption of any decisions without observing the deadlines that determine the procedure for convening and holding a general meeting of shareholders	Clause 3, Article 47 of the Federal Law JSC

Source: Iontsev M.G. Corporate takeovers: mergers, acquisitions, greenmail. M.: Os-89, 2003. S. 13-18

The federal law "On the Securities Market" considers the stages of the issue of securities, including the reorganization of companies. A separate legal act that considers the process and stages of the issue of securities is the Decree of the Federal Securities Commission No. 03-30 / ps "On the standards for the issue of securities and registration of securities prospectuses".

Clause 1 of Article 17 of the Federal Law "On Competition and Restriction of Monopolistic Activities in Commodity Markets" establishes restrictions on mergers and acquisitions of commercial organizations in order to prevent monopolistic activities. If the total book value of the assets of such organizations exceeds 200,000 minimum wages, then such transactions can be carried out only with the prior consent of the antimonopoly body, the same applies to the approval of the purchase of more than 20% of voting shares in the authorized capital. The recent intentions of the Ministry of Antimonopoly Policy of the Russian Federation to amend the Federal Law "On Competition and Restriction of Monopolistic Activity in Commodity Markets" cannot be ignored. The Government of the Russian Federation has already approved a bill that will increase the amount to 3 billion rubles. the minimum size of the total assets of companies whose mergers and acquisitions are subject to preliminary control by the antimonopoly authorities. It is also possible to completely cancel the restriction on the size of the purchased block of shares.

Speaking about the international practice of legislative regulation of monopolistic activity, it is necessary to note the legislative acts of the United States, which are mainly antitrust (antitrust) legislation, which declares it illegal for one or more corporations to seize monopoly positions in any business, in any part of the country or in business relations with foreign countries, and regulates the corporate policies of companies. Among its most important components is the Clayton Act, passed back in 1914, which introduced the principle of early prevention of potential damage from anti-competitive activities. This law prohibits the implementation of a transaction to acquire shares or other assets if, as a result of it, a monopoly may arise in the market or competition will be significantly reduced. The Hart-Scott-Rodino Antitrust Improvement Act of 1976, which supplemented antitrust laws with formal criteria for determining whether a monopoly has been seized or not.

The Act established rules for the pre-registration of all mergers and acquisitions of companies and required companies to provide the necessary information to the Antitrust Department of the Department of Justice and the Federal Trade Commission.

Mandatory prior notice of mergers has allowed antitrust authorities to block mergers before they can damage consumer interests. Within the time allotted by the Law, these bodies are obliged to find out whether the implementation of the declared transaction will have Negative consequences that infringe on the interests of American consumers (lead to higher prices, lower product quality, limited innovation, etc.). If negative consequences are revealed, then the antimonopoly authorities can block the transaction by challenging it in court.

All other legal acts mentioned at the beginning of this paragraph will be touched upon below when considering the "gaps" in Russian legislation that allow hostile takeovers.

Returning to the question of the forms of reorganization, we note that according to Art. 15 of the Federal Law "On Joint Stock Companies" the reorganization of a company exists in the following forms: merger, accession, division, separation and transformation. As noted earlier, the term "acquisition", as well as its particular case - hostile takeover - is not fixed in any way by Russian legislation.

Obviously, such a state of legal "anti-regulation" in terms of the hostile takeover market creates extremely favorable conditions for the "invaders", namely, ample opportunities to find more and more loopholes in order to circumvent the law. It is known that there are a number of reasons for the emergence of corporate conflicts in Russia, among which it is necessary to highlight the reasons related to legislative regulation and the intervention of law enforcement and federal executive authorities, such as:

· the presence of an administrative resource, or the so-called "shadow justice" using such shortcomings in the interests of the customers of the corporate takeover;

· shortcomings, "gaps" of the legislation.

The use of administrative resources is something without which hostile takeover companies today would not be able to successfully implement business takeover schemes. This is one of the most important factors in the success of hostile takeover operations. The presence of an administrative resource in the context of the ongoing crisis of the state largely determined the strategy or the specific course of corporate conflicts, the use of courts, prosecutors, law enforcement agencies and, accordingly, administrative pressure, criminal cases, and the use of force. In the redistribution of property, the benefits were received by those individuals or business groups who invested in the administrative and force resource in time. Alfa, Basic Element, MDM, and the Rosbuilding company, known to everyone who has faced the problem of hostile takeovers to one degree or another, have become the most active in this area. But these are only the most famous companies, and there are more than 100 companies specially created like Rosbuilding.

Indeed, why invest millions of dollars in the acquisition of a controlling stake in a joint-stock company, when you can invest several tens of thousands in obtaining the necessary court decision and the subsequent acquisition of the required stake, for example, through the Russian Federal Property Fund (RFFI), which organizes an auction and, through a commission sale, transfers shares to a friendly company-invader. Naturally, the true owner of these shares does not even suspect about the sale of his own block of shares, and no one was going to notify him. For money, judges are ready to take measures to ensure the complaints of minority shareholders (nominal persons of the occupier company), while actually not holding a single court session on the merits of the dispute.

Thus, the problem of the presence of a "bribe" administrative resource in Russian practice is obvious and contributes to the development of hostile takeover operations with no less force than the existing shortcomings of Russian legislation.

Considering the "gaps" of Russian legislation, let us note the most significant of them and those that have been quite often used recently by occupant companies in order to speed up and facilitate the operation of hostile takeover of enterprises.

The federal law "On joint-stock companies" with all the changes and additions, which greatly complicated a number of basic corporate procedures, to a certain extent created a favorable climate for minority shareholders hired by the invader company. According to paragraph 2 of Art. 53 of the Law, shareholders are given the opportunity to propose candidates for election to the Board of Directors of a joint-stock company during an extraordinary meeting, thereby simplifying the procedure for appointing "their own" people as an invading company. It should be noted that the old version of the Federal Law "On Joint Stock Companies" did not grant shareholders such a right.

In order to limit the number of schemes used by an invading company during a takeover, specialists from the International law firm Cooder Brothers deemed it necessary to introduce an amendment to the Law indicating that it is impossible to hold an extraordinary meeting of shareholders without the consent of the Board of Directors, otherwise it will not have legal force. This rule will allow, in their opinion, to weaken the positions of the “invaders” already at the initial stage of an illegal attack, but, given the specifics of hostile takeovers in Russia, one can argue with the proposal to introduce such an amendment. Invading companies will be able to get around this amendment if the members of the Board of Directors are not very interested in protecting their enterprise, and an unfriendly party offers them a good amount of money for facilitating an extraordinary meeting of shareholders.

It is impossible to ignore the introduction of an amendment to the Federal Law "On Joint Stock Companies", the draft of which was adopted State Duma February 4, 2004, and coming into force in March 2004. This amendment extends the cumulative voting system for candidates to the Board of Directors to all joint-stock companies without exception. The former Federal Law "On Joint Stock Companies" regulated the principle of cumulative voting only for those companies that have more than 1,000 owners of voting shares. According to experts, the introduction of such amendments will increase the investment attractiveness of Russian companies for. But for small businesses, this amendment will bring nothing but inconvenience. This is explained by the fact that due to cumulative voting, minority shareholders have a better chance of electing the right candidates to the Board of Directors than the invading companies will successfully use.

Moreover, "gaps" in the legislation are often used to capture companies, allowing parallel registers to be maintained and management bodies to be created. With the emergence of parallel registries, the Board of Directors of the Professional Association of Registrars, Transfer Agents and Depositories (PARTAD) has developed several decisions requiring registrars to take necessary measures when the first signs of a corporate conflict appear.

The Decision of the Board of Directors of PARTAD contains a requirement for the registrar of the target company in the event of corporate conflicts to immediately notify the Professional Association of Registrars, Transfer Agents and Depositories about a corporate conflict with the issuer, the register of registered securities holders of which is maintained by the registrar. Moreover, the decision of the Board of Directors of PARTAD contains a number of signs by which one can judge the occurrence of a corporate conflict, including a hostile takeover, namely: the decision by the issuer's governing bodies to conclude an agreement on maintaining the register of registered securities holders with another registrar; the emergence of several management bodies of the same name, each of which has documents confirming the authority of the issuer's management bodies, and many others. The Draft Decree of the Federal Commission for the Securities Market "On maintaining registers of holders of registered securities of issuers in the event of corporate conflicts", as well as the Draft Federal Law "On Amendments to Article 44 of the Federal Law "On Joint-Stock Companies" contain provisions similar to those described above, but obliging registrars of the target company to immediately notify the FCSM of Russia of the occurrence of a corporate conflict.

If these projects are accepted, control over joint-stock companies - potential targets of hostile takeovers could possibly be strengthened by speeding up the process of notifying specialized bodies that would take control of the target company and providing protective measures to prevent hostile takeovers. But, unfortunately, these proposals were not approved by the Federal Securities Commission.

The "invaders" also effectively used the Federal Law "On Insolvency (Bankruptcy)" of 1998, which provided a lot of technical possibilities in order to use it for purposes that it did not provide for.

The shortcomings of the 1998 Act were as follows:

* a very low debt threshold, in the presence of which the arbitration court could initiate a bankruptcy case against the company;

* a specific procedure for the appointment of temporary and external managers;

* low control over the activities of temporary and external managers.

With the release of the new edition of the Federal Law "On Insolvency (Bankruptcy)" No. 127-FZ of October 26, 2002, the invader companies lost the ease of conducting an operation for a hostile takeover of an enterprise through its bankruptcy. The 2002 law provides for stricter control by the court over the bankruptcy procedure, and also complicates the bankruptcy procedure itself.

The federal law "On Enforcement Proceedings" is also imperfect in the field of protection against corporate takeovers. According to Article 59 "The procedure for seizing the property of the debtor-organization and its sale" of the Law, bailiffs have the opportunity to choose between the sale of shares owned by the debtor, and cash on deposit and other accounts of the debtor. As practice has shown, bailiffs in almost all "forced takeovers" try to sell the issuer's shares to the occupant company or persons associated with it in the shortest possible time. In this regard, it is expedient to introduce an amendment to the Federal Law "On Enforcement Proceedings" in such a way that the sale of shares takes place in the second place, or it is clearly forbidden by law to levy priority recovery on shares owned by the debtor.

Procedural legislation also requires separate changes. This problem was taken up by the order of the Ministry of Economic Development of the Eastern European Center for Legal Research (VETSPI). As a result of its study of the procedural legislation, VETSPI prepared the concept of amendments. The shortcomings of the Arbitration Procedure Code were widely used by the invaders for the purpose of hostile takeover using administrative resources. Paragraph 2 of Article 36 of the Code gives the plaintiff the right to choose an arbitration court if there are several defendants. Thus, the hijacking company invents fictitious defendants (along with the company - the target of a hostile takeover), and files a lawsuit on behalf of a private shareholder in the court in which the hijacking company has "its own connections." In this regard, VETSPI proposes to amend the Code of Arbitration and Proceedings and legislate that the consideration of claims of private shareholders against the company should be transferred to the jurisdiction of the arbitration court at the place of registration of the company. Only in the "native" region will the court be able to introduce interim measures for claims. These amendments should, to one degree or another, reduce the number of hostile takeovers using the imperfection of procedural legislation.

Continuing the consideration of "gaps" in the procedural legislation, one cannot fail to mention one more shortcoming. The current procedural legislation objectively provides for the possibility for plaintiffs withdrawing claims to abuse their right and not be liable for losses caused to defendants as a result of the application of interim measures. In accordance with Article 98 of the Arbitration Procedure Code of the Russian Federation, such liability arises only after the entry into force of the decision of the arbitration court to refuse to satisfy the claim. Accordingly, according to Article 146 of the Civil Procedure Code of the Russian Federation, the plaintiff's liability comes only after the entry into force of the court decision, which dismissed the claim. Analyzing the Russian practice of hostile takeovers, it is important to note that in the course of numerous attempts of corporate takeover with the use of interim measures (including the seizure of shares, a ban on the export and import of products, and much more) Russian enterprises suffered huge losses. Therefore, it would be important to introduce into the legislation a special rule providing for the liability of the plaintiff who abandoned the claim to the defendant, who suffered losses by one or another security of the withdrawn claim.

It is also necessary to mention the Decree of the FCSM "On additional requirements for the procedure for preparing, convening and holding the General Meeting of Shareholders" No. 17/ps dated 05/31/2002. Clause 2.9. of this Resolution, it is stipulated that the General Meeting of Shareholders must be held in the settlement (city, town, village), which is the location of the company. In order to limit the practice of convening extraordinary meetings of shareholders at the initiative of an "unfriendly party", which, as practice shows, were held in most cases outside the enterprise - issuer and without its knowledge, it is necessary to legally limit the holding of the General Meeting of Shareholders exclusively to the location of the company.

In conclusion of the consideration of the legal regulation of the M&A market in Russia, we note that the legislative framework and the techniques arising from it, which have been used in corporate takeovers in recent years, are undergoing changes.

Firstly, the highest judicial instances have begun, although not to the extent that we would like, an explanatory practice aimed at “filling in the gaps” in the legislation, which will be discovered later, during the period of accumulating experience in applying new procedural and other amendments;

Secondly, corporate conflicts are gradually transferred to the halls of arbitration courts. The judges of these specialized courts are more qualified in the field of civil and corporate law, so the hijacking companies, as well as the target companies, will have to increase the level of professionalism in their approaches to corporate takeover cases;

Thirdly, “there will be those who wish to circumvent the exclusive jurisdiction of arbitration courts in corporate takeovers. In the tactics of hostile takeover operations, there are already attempts to incorporate a conflict of laws rule of the Civil Procedure Code of the Russian Federation, according to which if an application addressed to the court contains several interconnected, not subject to division of claims, some of which are under the jurisdiction of the arbitration court, and others - to the court of general jurisdiction, the case is transferred to the court of general jurisdiction.

Undoubtedly, the use of some of the "gaps" of Russian legislation discussed in this paragraph is only one of the possible mechanisms of hostile takeover. As practice shows, hostile takeovers are most often successfully implemented in relation to those joint-stock companies in which a controlling stake is not consolidated, or there is no effective system for protecting the property complex and the rights of shareholders - employees of the enterprise. However, the heads of enterprises that are potential targets of hostile takeovers should take into account that in any case, legislation will never become ideal, will never become a kind of shield to protect the interests of all parties. Of course, the desire to get "maximum profit at minimum cost" is the dream of any entrepreneur, but, as practice shows, this dream is often achieved too easily. In Russian practice, this way - buying up enterprises for the purpose of reselling them as real estate - has become a kind of business. And in this context, it must be said that such acquisitions undermine any notion of corporate ethics in Russia.

The existing methods of hostile takeovers used in international and Russian practice, as well as examples of the use of certain methods in the Russian practice of hostile takeovers, will be discussed in detail in the first paragraph "Forms and methods of hostile takeovers used in international and Russian practice" of Chapter II of this work.

Chapter II. Forms and methods of hostile takeovers

2.1 Forms and methods of hostile takeovers used in international and Russian practice

Currently, all business units operate in a highly competitive environment, when almost every enterprise has a risk of becoming a target for capture by other applicants, and experiencing a long, exhausting conflict, the outcome of which may be quite unexpected for the owner. Therefore, for any enterprise - regardless of whether there is a risk of a hostile takeover or not - it is necessary to take care of measures to protect their business. But in order to effectively takeover, first of all, it is necessary to determine those possible takeover methods that can potentially be applied to the enterprise - the target of a hostile takeover. Obviously, in order to know how to defend yourself, you need to know what to defend against. This paragraph is devoted to such methods, technologies used by the invader companies during the hostile takeover operation.

It is important to note that in any case, each hostile takeover is preceded by such an important process as the collection of information about the company that is the target of the takeover. The collection of information is a mandatory preliminary action on the part of the company - the invader in all options for the capture. The more information the invader company manages to collect, the faster and more correctly it will develop a strategy and action plan for conducting a hostile takeover operation, and the more chances the invader will have to implement such a strategy and capture the enterprise. Also, the strategy of a hostile takeover of an enterprise depends on the goals of a hostile takeover pursued by the invading company. The information collected by the invader company is very multifaceted, because for the purposes of a hostile takeover, any information about the activities of the acquired company may be useful. This can be both information directly related to the main activity of the enterprise (for example, production, if the enterprise is engaged in the production of any products), and information about the management of the enterprise (information of a personal nature), which the capturing company receives, as a rule, illegally . However, the main information about the target company, which is necessary and mandatory for the correct choice of the hostile takeover strategy by the company-invader, is:

1. The structure of the authorized capital, namely the distribution of shares in the authorized capital of the enterprise.

2. Analysis of the Charter and internal documents (in order to identify the mistakes made and use in the future the imperfection of the legislation).

3. Rights of the owners of the target company to property.

4. Analysis of the economic condition of the target company, namely the presence of a possible debt to counterparties (relationships with creditors and suppliers), especially overdue ones.

5. Availability of links of the target company with administrative, law enforcement and judicial resources.

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Lecture number 8. Hostile takeover protection.

Lecture plan.

Features of the Russian practice of applying protective measures against hostile takeovers.

Classic ways to counter hostile takeovers.

The set of measures to counteract hostile takeovers is divided into two parts: preventive And active Events. A task preventive measures– reduce the very likelihood of a hostile takeover. Active events intended for immediate defensive action after the start of a hostile takeover.

The following types of preventive (precautionary) measures are known:

"Poisonous (poisoned) pills,

Amendments to the articles of incorporation,

"Poison Pills". These are various options for additional securities issued by a company in order to reduce its attractiveness to a potential buyer. The most commonly used two options for protective "pills": external And domestic .External "pills" give the right to the shareholders of the company under threat of takeover to purchase the shares of the aggressor company at a significant discount. internal pills provide a similar right in relation to the company's own shares - the subject of a potential takeover.

The release of "poison pills" is associated with the possibility of the onset of the so-called. "launch" event. Such an event can be:

acquisition of 20 or more percent of the company's shares by any legal entity or individual;

tender offer for the purchase of 30 percent or more of the shares.

In most cases, "poison pills" are issued by decision of the board of directors and can be withdrawn for a symbolic price at any time before the "triggering" event. This policy of issuing "poison pills" provides the board with room for maneuver in the event of, for example, a friendly acquisition offer.

Poison pills, as a method of protection against hostile takeovers, were invented by the famous American lawyer specializing in takeovers, Martin Lipton. They were first successfully used in 1982 in the USA in a fight between ELPaso Electric and General American Oil. In the 1990s, protection with "poison pills" became commonplace for most American corporations.

The development and continuous improvement of methods of protection against hostile takeovers has led to the emergence of various forms of "poison pills":

Issues of preferred shares;

Issues of rights;

Issues of bonds with a put option.

Issue of preferred shares . This is the first generation of "poison pills".

The target company enjoying such protection distributes to its shareholders dividends in the form of convertible preferred shares. In addition to fixed dividends on such shares, shareholders receive certain additional rights in the event of a “starting” event. In particular, the conditions for issuing said shares may provide for all their owners the right to demand from the joint-stock company the redemption of their shares for cash at the maximum price paid by the aggressor-buyer for the shares of the target company during the last year. In addition, if the aggressor succeeds in carrying out the takeover, then the preferred shares of the target company can be converted into ordinary shares of the aggressor at a market value determined similarly to the previous case.

Issue rights. The "poison pills" in the form of a preferred stock issue had certain drawbacks, so over time they were replaced by a new generation of "poison pills" in the form of a rights issue. Rights are a type of call option issued by a joint-stock company and giving shareholders the right to purchase shares at a fixed price for a certain period of time (usually at least 10 years). The rights to purchase shares are distributed to shareholders as dividends.

In accordance with the terms of the issue, the right to purchase shares becomes effective only if a “triggering” event occurs. It is at the moment of occurrence of such an event that certificates of rights are sent to shareholders. As in the case of preferred shares, the issuer stipulates in the terms of the issue of rights the possibility of their withdrawal during the entire period of circulation for a symbolic price until the “starting” event occurs.

Issuing bonds with a put option . This is the third generation of "poison pills". The issuance of such bonds provides for the right of their owner to demand redemption of the bonds at face value in the event of a hostile takeover. The issuer, resorting to the use of this "poison pill", expects that in the event of a takeover, the presentation of bonds for redemption may create serious problems for the absorber due to a lack of financial resources.

Amendments to the statutory documents. Changes in the charter of a joint-stock company are the most common and least costly way of preventive protection against takeovers. Various changes to the founding documents of a company that fears a hostile takeover typically include:

Multi-stage conditions for elections to the Board of Directors,

Regulation on a qualified majority for making decisions on mergers and acquisitions,

Double capitalization, etc.

"Split" board of directors. The "divided" board clause is intended to create obstacles in the path of the aggressor in the process of changing the board of directors. Its essence lies in the division of the board of directors into several groups, while no more than one group of directors can be re-elected at the annual meeting. The most typical variant is the division of the board of directors into three groups with the annual election of one third of the directors. Thus, it may take more than two years for the aggressor to gain full control over the acquired business.

"supermajority" clause. This clause stipulates that more than a simple majority of votes is required to approve a takeover transaction, i.e. "supermajority" (qualified majority). A typical example of a supermajority is 75-80% of the votes, in some situations its size can reach 90-95%. The "supermajority" clause may contain an overriding condition whereby the "supermajority" clause does not apply if the takeover is approved by the board of directors of the target company.

double capitalization. Double capitalization provides for the presence in circulation of two or more types of ordinary shares of the company with a different number of votes per share. The main purpose of double capitalization is to give more votes to shareholders who are loyal to the target company.

The most typical example of double capitalization is an additional issue of shares that have a large number of votes compared to previously placed shares of the company. In 1988, the US Securities and Exchange Commission banned such share issues leading to a reduction in the number of votes of existing shareholders. However, this prohibitive normative act does not have retroactive effect, i.e. does not apply to US companies that double capitalized before 1988.

"Gold and Silver Parachutes". Special agreements with senior executives, managers or company personnel to pay them one-time compensation in the event of their voluntary or involuntary dismissal at the time of the takeover or for some time after it. Agreements on "gold" and "silver" parachutes can be concluded for a certain period, but in most cases they contain the so-called. an "evergreen" clause, according to which the initially fixed period of one year is automatically extended for a year if there is no hostile takeover.

Active defense against hostile takeovers includes a wide range of activities:

Greenmail and dormancy agreements,

"White knight",

"White Squire"

recapitalization,

Litigation,

Pac-Man Defense.

Greenmail called buyback of shares from the buyer with a premium. The payment of the greenmail is usually accompanied by a no-action agreement, under which the buyer undertakes not to buy additional shares in excess of a certain amount specified in the agreement. For this consent, the buyer receives a fee.

"White knight" - a friendly company that agrees to be the best buyer.

"White Squire" - a kind of "white knight". Unlike the latter, the “white squire” carries out a friendly takeover not for himself, but to protect the partner company.

Recapitalization - changing the capital structure by a sharp increase in the share of borrowed capital in order to deliberately worsen the financial condition of the company that has undergone a hostile takeover. This is, in essence, the transformation of the company into its own "white knight".

Litigation - all kinds of legal legal actions aimed at complicating the takeover process. The most accessible and widespread form of protection against hostile takeovers.

Baek-Man Defense - a mirror response tender offer to the buyer to acquire its shares. The most radical measure of defense against hostile takeovers (defense through attack).

2. Features of the Russian practice of applying protective measures against hostile takeovers.

The measures applied in the Russian practice of counteracting hostile takeovers also include preventive and active protective measures. However, their list differs significantly from the classical methods of protection used in foreign countries.

In Russia, specific methods of protection based on a direct violation of the law or on the use of its shortcomings have become widespread. Due to the imperfection of Russian legislation, many civilized methods of combating hostile takeovers are not applied at all or are applied in a very peculiar way.

"Poison pills" in Russian conditions . The release of "poison pills" is not provided for in Russian legislation, however, and is not prohibited. In foreign practice, as already noted, the issue and placement of special rights in the form of "poison pills" is carried out by decision of the board of directors of the joint-stock company. A similar procedure is defined by the Russian law "On Joint Stock Companies".

Thus, nothing prevents in Russian conditions from issuing rights to purchase shares, however, certain provisions of the Law "On Joint Stock Companies" seriously limit the possibility of using the issue of rights as a "poison pill". For example, Article 36 of this law establishes that the payment for shares is carried out at market value, but not below their nominal value. Due to the above legislative restrictions, “poison pills” are used in Russian practice in a very peculiar way.

Under "poison pills" in Russia, it is customary to understand the various actions of the management of the target company, aimed at creating all sorts of obstacles to the aggressor company. The most common varieties of Russian "poison pills" are:

Bonded deals concluded shortly before the seizure of the enterprise;

Issuance of bills for astronomical sums;

Lease of real estate for long-term lease;

Concealment or destruction of all documents of the target company;

The division of the target company into two enterprises.

"supermajority" clause . Russian companies do not have the opportunity to resort to this method of protection, since the "supermajority" clause is actually defined in our country by law and does not require additional changes to the company's charter. According to Russian legislation, 75% of the votes are required to make decisions on all the most important issues in the life of joint-stock companies, including mergers and acquisitions. Based on this, there is only one way for the target company in Russia to block any hostile takeover attempts - controlling more than 25% of the votes of the shareholders of its company.

Double capitalization is also banned in Russia, although this ban applies only to ordinary shares. The Russian law "On Joint Stock Companies" provides that each ordinary share of a company provides the shareholder with the same amount of rights. In other words, Russian joint-stock companies cannot issue ordinary shares with different amounts of rights granted to shareholders.

As for preferred shares, they can be used for double capitalization in Russia. To do this, it is enough to make appropriate changes to the charter of the joint-stock company, which give preference shares of a certain issue the right to vote.

"Gold and Silver Parachutes". This is the only protective measure of a preventive nature that can be used in Russia without restrictions. Russian legislation allows for the inclusion of a special clause in the labor contract with the top manager of the target company, by virtue of which, in the event of early termination of his powers, he receives significant monetary compensation. However, the Russian practice of protection against hostile takeovers so far very rarely uses the possibilities of "golden and silver parachutes".

Active defenses against hostile takeovers in Russia . The situation with the use of classical active means of protection against hostile takeovers in Russia is largely similar to the picture described above with preventive measures. For example, the use of greenmail in Russia is practically impossible and can easily be challenged as violating the rights and interests of other shareholders not participating in the share buyback.

The fact is that in Russia each shareholder - the owner of shares of certain categories, the decision to acquire which has been made, has the right to sell his shares, and the company is obliged to purchase them. In this regard, it is impossible in practice to carry out a division between the ordinary shares of greenmailer and other shareholders. Therefore, when deciding to buy back shares at a premium, it is likely that all shareholders will offer their shares for buyback. In such a situation, the target company would be required to make a proportional share buyback and, accordingly, the planned buyback targets would not be achieved.

Recapitalization . In Russian conditions, the use of recapitalization of the target company is difficult, primarily due to the underdevelopment of the corporate bond market. Currently, only very large Russian companies have real access to the corporate bond market. The majority of Russian companies experience no less difficulties in attracting bank loans, since recapitalization requires the attraction of a significant amount of borrowed funds.

"White Knight" or "White Squire" Invitation . Both types of such protection, in principle, can be easily used in Russian practice. However, it is difficult to find a “white knight” in Russia, since there are still practically no investment banks in our country that usually select suitable candidates. In addition, the “white knight” most often conditions his participation in the fate of the target company with certain concessions, which in Russian conditions can quickly become the subject of litigation, as violating the legitimate rights and interests of shareholders.

In the case of attracting a "white squire", difficulties may arise related to the registration of an additional issue of shares: Russian legislation does not provide for the possibility of a backup registration, as, for example, in the United States.

Pac-Man Defense . In its pure form, such protection in Russia is impossible due to the lack of legislation on the tender offer. In the Russian version, the protection of Peck-Man is a set of all measures to actively combat the aggressor company:

Appeals to law enforcement agencies with statements and complaints about the illegal actions of the aggressor company in buying up shares;

Appeal to the courts with claims against the aggressor company;

Bringing public attention to what is happening

Purchase of shares of enterprises owned by the aggressor company;

Disruption of individual events of the aggressor company.

Litigation . This is the only active protective measure from the classic set of foreign companies that is applied in Russia in a similar way. Moreover, the lack of elaboration, and often the complete absence of regulations relating to various aspects of mergers and acquisitions, creates extensive opportunities for the use of litigation as one of the main methods of combating hostile takeovers in Russian practice. Antimonopoly legislation is especially convenient for effective judicial opposition to hostile takeovers in Russia.

Specifically Russian Ways to Protect Against a Hostile Takeover . Given that the use of most of the classic foreign methods of combating hostile takeovers in Russia is not possible or effective, Russian companies have developed their own methods that are typical only for domestic practice. Specifically Russian ways of protecting business from hostile takeovers are usually classified into two groups:

Strategic ways of protection;

Tactical defenses.

TO strategic Ways to protect against hostile takeovers in Russia include:

Formation of a secure corporate structure.

Ensuring effective economic security of the enterprise.

Creation of conditions preventing the purchase of shares.

Creation of a system of control over accounts payable.

Formation of a secure corporate structure . The essence of this strategic method of protection lies in the formation of such a corporate structure of the business, which would almost completely exclude the possibility of its unfriendly takeover. This method is based on the principle of dividing the company's property complex into parts, which is usually achieved using two schemes:

Reorganization of a potential target company in the form of a spin-off of several small companies that are not interesting from the point of view of a hostile takeover.

Conclusion of the most attractive assets from the point of view of the aggressor companies to subsidiaries related to each other by cross-ownership of shares.

Ensuring effective economic security of the enterprise . To be always ready to repel an attack on a business, its owners must constantly monitor the current situation. To do this, you need to organize your own professional economic security service, which will monitor everything that happens around the target company.

Creation of conditions preventing mass buying of shares . The most common scheme to prevent aggressive mass buying of shares is the construction of cross-shareholding. The essence of cross-ownership of shares is as follows. A potential target company creates a subsidiary structure with a predominant share in the authorized capital (51 percent or more). The other founders of this subsidiary are minority shareholders who contribute their shares in the parent company as a contribution to the authorized capital. Thus, a controlling stake in the parent company is consolidated from the subsidiary, which guarantees full control over the parent company.

Creation of a control system for accounts payable . Effective control over accounts payable can be carried out in various areas:

Avoiding arrears.

Refusal of contractual relations with unknown companies.

Establishment of a special company that accumulates accounts payable.

Realization of all finished products through a controlled trading house.

To the number tactical Measures to combat hostile takeovers in Russia include:

Counterpurchase of shares.

Asset restructuring.

Blocking of a block of shares acquired by the aggressor.

Working with shareholders.

Defense through attack.

Counterpurchase of shares . This method of tactical struggle against hostile takeovers is the simplest, but also the most costly. The main purpose of counterbuying shares is to prevent the aggressor company from acquiring a controlling stake in the target company.

Restructuring of the assets of the target company . Blocking of a block of shares acquired by the aggressor company The target company, using completely legal legal mechanisms, blocks the block of shares acquired by the aggressor company. To do this, you need to find any formal clue in the actions of the aggressor company to buy shares associated with a violation of the current legislation. Along with blocking the aggressor, an additional issue of shares is simultaneously carried out in order to reduce the share of the aggressor in the authorized capital of the target company.

Work with shareholders . This measure is not legal. It is associated with the identification and suppression of unfriendly actions of certain groups of shareholders helping the aggressor company, explanatory work with shareholders in order to maintain their loyalty to the target company.

Defense through attack . It is a counter attack on the aggressor company, including:

Buying shares of the aggressor company or shares of enterprises owned by it.

Handling applications and complaints to the courts and law enforcement agencies on the illegal actions of the aggressor company.

Organization of relevant publications in the press.

Disruption of the activities of the aggressor company aimed at capturing the target company.

All methods of protection against hostile takeover, which are used by companies in the Russian market, can be conditionally divided into two classes - preventive and active methods Rudyk N.B. Methods of protection against hostile takeover: Proc. practical Benefit. - M.: business, 2006. p. 309

Due to the specific features of Russian hostile takeovers, preventive methods of defense, on average, have a much greater potential effectiveness than active ones. After all, after a Russian company has been attacked, it simply may not have enough serious protective measures. Preventive defenses are used by companies to reduce the likelihood of ever becoming the target of a hostile takeover. In the Russian Federation, the following preventive methods of protection against hostile takeovers have gained the greatest popularity:

• 1. Reorganization: delisting and transformation into a CJSC (LLC);
• 2. Redemption of shares from minority shareholders (protection against green blackmail);
• 3. “Freezing out” of minority shareholders (withdrawal of assets and subsequent buyback of shares);
• 4. Separation of the company;
• 5. Liquidation of the company and transfer of its property to a new legal entity (LLC or CJSC);
• 6. Withdrawal of assets to subsidiaries (CJSC or LLC);
• 7. Change of registrar;
• 8. Monitoring of the debt load;
• 9. Shark repellent;
• 10. Search for the "white knight";
• 11. Creation of a strategic alliance.;
• 12. Exit to the IPO.

Let's consider some of the preventive methods of protection against congenital absorptions.

Supermajority. This method is used when special decisions are made, for example, when considering a proposal to buy a company in a takeover or the question of changing its management. The supermajority clause ranges from 60% to 80%, which is the minimum percentage of shareholders required to approve any decision. This measure limits the ability of the acquiring company to take over the target company, even if the aggressor managed to control the board of directors, and helps to balance the interests of management with the interests of shareholders of the target company.

A number of studies show that the supermajority clause increases the value of shares, while other studies indicate no corresponding effect. At the same time, the growth of costs for coordinating the actions of shareholders is often neutralized by a decrease in agency costs. raider hostile merger takeover

The supermajority condition for regulating the most important issues relating to the company's activities is contained in the charters of many Russian firms. For example, VimpelCom has a supermajority threshold of 80%. This fact came to light during the raider's unsuccessful attempt in 2005 to overturn this provision with a lawsuit by a minority shareholder of the company, who demanded that it change the charter so that a simple majority on the board of directors would be sufficient to resolve critical issues, the Norwegian company Telenor, whose interests as a shareholder " VimpelCom was violated in this case, managed to defend the 80% norm only in the Supreme Court of the Russian Federation (28).

Creation of a strategic alliance. This type of protection resembles the "white knight" method, but unlike the latter, it is applied before the threat of absorption arises. A strategic alliance between two or more businesses can protect all parties from unwanted takeovers. But at the same time, there is a risk that the strategic partner will transform into a “gray knight” and will try to take over the partner company using the insider information available to him. In addition, the creation of an effective alliance is a very difficult task.

In Russian practice, there are examples of successful organization of strategic alliances: the Verysell group created a whole technology for acquiring attractive businesses at the end of 2002, Vest and Metatechnology formed a single and quite effective organism. However, many attempts to create an equitable or "inclusive" association fail. Caught between three centers of gravity (Verysell, Compulink, White Wind), the Compulink retail chain practically ceased to exist, Parus and Galaktika, after a short partnership, split again Tuzhilin A. Creation of a system of protection against hostile actions of competitors in the group of companies . - In: Securities Market, 2003, No. 11, p. 18-21.

Asset protection. The ideal defense is a legal structure that prevents raiders from depriving the owners of their assets or makes the aggressors pay a high price for them, so that the owners can retain the necessary degree of control.

The transfer of assets to a third party is a common defense measure in Russia. As a rule, such transactions are rather controversial, sometimes feigned, and do not imply the receipt of an appropriate equivalent in return. However, they violate the rights of minority shareholders. In case of insufficient legality of the transaction and the loss of assets, minority shareholders can sue to receive compensation for their losses, which can be paid from the managers' personal funds if their actions are found to be illegal. As a result, they can easily lose their property. A fairer option is when companies exchange assets of equal value (such an operation is called cross-collateralization). At the same time, the state of their balance sheets does not worsen. In general, the risk that asset protection will lead to losses not only for managers and controlling shareholders, but also for minority shareholders, is too high. Until Russian corporate law establishes clear rules for regulating takeover defense methods, such countermeasures will be costly and risky.

A prime example of the use of a trust to protect assets was the ownership structure of Yukos. According to Kommersant newspaper, 44% of Yukos shares belonged to eight trusts. They were managed by two trust companies registered in the British Channel Islands. Moreover, the transfer of assets from individual owners to trust companies took place only in February 2004. The trust structure made it possible to reliably hide the source of the origin of funds used to repay debts, and very quickly, given the ease of changing the beneficiary, to offer potential investors security for the return of borrowed funds.

Another type of asset protection is the restructuring of liabilities through debt buildup. This means the transfer of all assets and liabilities to the enterprise that economic activity. This method was successfully used by the management of Togliattiazot.

strategic acquisitions. They make it possible to complicate the process of hostile takeover. However, their shortcomings as a preventive measure include the unpredictability of the behavior of a potential aggressor before an official takeover offer is made. Therefore, this type of protection has practically not received distribution in Russia.

One of the few examples of the application of this method is the acquisition by Norilsk Nickel of a controlling stake in the registrar CJSC Unified Registrar in April 2005. Using the capabilities of its “own” (controlled) registrar facilitates the construction of a system of protection against hostile takeovers.

Active methods of protection against hostile takeovers available to Russian companies do not differ in variety. Ignatishin Yu. Mergers and Acquisitions: Strategy, Tactics, Finance. - St. Petersburg: Peter, 2005. - p. 334..

Here are some of the active protection methods that can be most often observed in practice:

• - Blocking the movement of shares
• - Registry takedown lock
• - Counterclaims
• -Additional emission
• -Urgent withdrawal of assets to a new legal entity
• - Counter-purchase of own shares

However, if the aggressor is a professional in the Russian market of hostile takeovers, then most likely he has already “taken care of” everything, and the company has few chances for successful defense. If the aggressor has access to an administrative resource, then the target corporation loses even these chances.

It is possible to talk about an effective protection strategy in the conditions of the Russian Federation only in relation to preventive methods of protection.

The results of assessing the potential effectiveness of Western methods of protection against hostile takeovers in the Russian corporate control market are presented in Table. 2.

Table 2. The potential of using Western methods of protection against hostile takeovers in the Russian Federation Molotnikov A. Mergers and Acquisitions: Russian experience. - M., 2006. - p. 301.

western method	Potential in Russia
Divided board of directors	Impossible (AO law)
supermajority	Maybe
fair price	Impossible
poison pills	Impossible
Toxic securities	Maybe
Recapitalization	Impossible
Green blackmail	Maybe
non-intervention agreement	Maybe
White knight	Maybe
Restructuring of assets and liabilities	Maybe
golden parachutes	Maybe
Management buy-out	Maybe
reincorporation	Impossible
Trials	Maybe

The low potential effectiveness of the application in Russia of many protection methods developed in the Western corporate control markets is explained by the following reasons:

• 1. extremely “peculiar” methods of attack used by Russian corporations-buyers;
• 2. there is no proper legal basis for the application of many Western methods of protection;
• 3. the stock market is not developed;
• 4. The vast majority of open Russian companies are only formally open joint stock companies, but in fact they are private companies (and many Western methods of protection were created specifically with open joint stock companies in mind).

In conclusion, I would like to note the following. The methods of conducting hostile takeovers in Russian practice are a direct consequence of the “wild” stage of the initial redistribution of property that took place in our country in the early 1990s. it seems that the consequences of this stage will be felt for a long time to come in a variety of areas.