Contributed By CHSH Cerha Hempel Spiegelfeld Hlawati
Shareholder activism has emerged and become increasingly visible in Austria in recent years. However, shareholder activist organisations (eg, typically the Austrian Chamber of Labour, trade unions and consumer protection organisations such as Verein für Konsumenteninformation) mainly focus on advising and representing consumers who have suffered damage to their investment made in units for collective investment or similar instruments, mainly by a wrongful prospectus or advertising, including in legal proceedings, rather than tackle M&A cases. Therefore, activism caused by the aforementioned groups in M&A transactions is seen quite rarely.
It is noteworthy that minority shareholders in particular may avail themselves of legal remedies surrounding M&A activities – not so much preventing or challenging a takeover, merger or similar reorganisation or squeeze-out as such, but as regards the judicial review of the adequacy of (cash) compensation offered or granted for any forced exit as shareholder of a company. These proceedings mostly go without media publicity.
In addition, shareholders may exercise minority rights prior to and in the general meeting, eg, by taking advantage of their right to ask questions. In rare cases minority shareholders have tried to stretch these rights, such as to pose numerous questions, request a special audit or challenge resolutions in court, bordering on abuse, but since the law provides for a rather limited system of minority rights, these strategies have not often proven successful. However, lawsuits do occur from time to time. Most recently, a lawsuit to challenge a resolution to appoint members of the supervisory board of a large listed Austrian company was filed for lack of gender diversity.