Major regulatory finance dispute

Motieka & Audzevičius was a leading counsel and strategic adviser in a major regulatory finance dispute.

In the case at hand a new shareholder took over the control of a publicly listed Lithuanian company by acquiring a majority shareholding. As a result, he had the obligation to submit a mandatory tender offer to purchase the remaining shares of the company. The Central Bank of Lithuania approved the conditions of the mandatory offer by which the tender price was less than a half of the original price paid by the new major shareholder.

Client (a foreign investor that has a minority shareholding in the company) challenged the legality of the Central Bank’s approval on the grounds that the reduced tender price was unfair and no motives to back the reduction of the price had been provided by the Central Bank.

The Supreme Administrative Court of Lithuania issued a final and binding decision by which it ruled that the decision of the Central Bank had been unlawful because it contained no adequate motives that could support the reduction of mandatory tender offer price.

The Court’s decision is an important precedent for foreign and national minority investors seeking to invest in Lithuanian companies, because it demonstrated a principle position that the interests of minority shareholders are protected with high legal standards in Lithuania, and that majority shareholders cannot arbitrarily determine the fate of other shareholders.