Draft, Albania "integrates on paper" with the EU capital market

2026-01-07 18:15:05, Aktualitet CNA

The Parliament has published for consultation the draft law "On some additions and amendments to law no. 10 236, dated 18.2.2010, "On the takeover of companies with public offering", which aims to harmonize the rules for the functioning of capital markets with those of the European Union countries.

Although legislation is being harmonized, the capital market in Albania is still in a development phase: limited number of issuers, low liquidity, and an investor base that is still taking shape.

According to the report accompanying the draft law, in this context, a clear, predictable and EU-standard framework for takeover bids is not a technical issue, but a prerequisite for increasing trust and integrating our market with European markets. The full approximation of our law with the acquis, with clear rules on the offer document, deadlines, fair price, board neutrality, “breakthrough”, as well as post-bid rights (squeeze-out/sell-out), gives the market the missing link: legal certainty.

Albania is on track to complete full alignment of its legal framework with the EU by the 2030 political horizon, and therefore it is important for investors and issuers that capital market rules will be the same as those of the European Union. With this draft law, according to the report, we de facto enter a much broader ecosystem, the rules becoming understandable for investment banks, funds and advisors operating throughout Europe. This means less regulatory arbitrage, more real competition and a greater likelihood that a legitimate offering will be successfully and timely concluded.

The draft law places the parties in a network of internationally recognized rules and reduces the costs of uncertainty. When an offeror knows exactly what to include in the offer document, how the fair price is assessed, what measures the board of the target company can (or cannot) take and what the rights of shareholders are after the completion of the offer. Also, mutual recognition of documents approved by an EU/EEA authority avoids duplication and speeds up the process, becoming a key element for a small market seeking to attract large capital.

Companies are encouraged to list and sell shares under these rules for the following main reasons:

• Permanent capital for growth—listing gives companies the fuel for investment, geographic expansion, digitalization, and without burdening the balance sheet with debt.

• Liquidity and transparent pricing—a regulated market enables fair valuation and orderly exit for existing shareholders; listed shares are converted into purchase currency (stock-for-stock).

• Governance and reputation—listing and transparency standards increase managerial discipline, customer and bank confidence, and the ability to attract talent (shares for employees).

But these motives only materialize when the legal infrastructure supports them. A complete bidding law does exactly that: it reduces uncertainty, prevents artificial control blockages, protects the small and increases the predictability of the outcome.

This law gives companies clear guidelines for large transactions, gives investors the guarantee that the rules are respected, and gives the Authority the tools to maintain the integrity of the market.

According to the report, the objectives to be achieved are:

a) Expanding the scope of application and clarifying definitions (e.g. “voluntary/mandatory offer”, “shares with multiple voting rights”).

b) Increasing the transparency of the bid document (e.g. data on compensation/price and determination methodology).

c) Reinforced rules for “fair price”: mandatory price increase if purchased more expensively during the offer period; authority of the Authority to adjust the price in exceptional circumstances.

d) Clarification of safeguards and voting rights in the AGA during the offer period (neutrality, "breakthrough", treatment of shares with multiple votes).

e) Special exemption from mandatory offer in cases of resolution/intervention under financial legislation.

f) Strengthening the Authority's powers: mutual recognition of the document adopted by an EU/EEA member state; inter-authority cooperation; possibility for limited exceptions in exceptional circumstances; implementing regulations.

g) Annual reporting to the European Commission and filing in ESAP to ensure public access and interoperability of data (“machine-readable” formats, standard metadata).

h) Transitional provisions and entry into force related to EU membership and updating of legal references (capital markets)./Monitor.al