On March 5, the courts in Poland permitted state energy giant PKN Orlen to acquire Polska Press, the largest regional press group in the country, which previously belonged to the German holding Verlagsgruppe Passau until March 2021 before it was bought by PKN Orlen.
PKN Orlen’s purchase of the publisher was also confirmed by decision of the antitrust body Office of Competition and Consumer Protection (UOKiK).
Earlier this week, the office of the Polish Ombudsman or Human Rights Commissioner Adam Bodnar suddenly announced that the Warsaw District Court has considered his office’s motion against the acquisition and halted the takeover of the media group.
PKN Orlen has a number of options to move forward with the acquisition, but even if the halt proves to only be temporarily, it will serve as a roadblock in the government’s efforts to ensure a higher share of Polish ownership of the country’s press. The ruling Law and Justice party (PiS) had expressed concern for years that the country’s press was in the hands of foreign owners, particularly German companies, while at the same time, Germany’s own laws tightly restricted foreign ownership of its own press.
Radosław L. Kwaśnicki, a specialist in economic law, believes that “the court’s ruling which stops the head of the UOKiK from permitting the purchase of Polska Press by Orlen does not limit Orlen’s ownership rights in the acquired company.”
Kwaśnicki says that another element of the case that could contain surprises is the timeline of events. He noted that on April 7, the UOKiK conveyed its position and passed over files to the court. Surprisingly, the court’s ruling on the matter is dated on April 8, just a day later.
“This means that the court could not have familiarized itself with the UOKiK’s position and with the files while releasing its ruling,” he underlined.
Meanwhile, Orlen CEO Daniel Obajtek has questioned the Competition and Consumer Protection Court’s decision to halt the acquisition. Obajtek stated that one could not stop what had been executed under the law and the acquisition of Polska Press took place on March 1, 2021.
He pointed out that all necessary permissions were received earlier, including ones from the Office of Competition and Consumer Protection. Moreover, if the Competition and Consumer Protection Court had made its decision during the acquisition, then PKN Orlen would not have been able to take over shares.
“When the acquisition of shares took place, we became legally entitled to exercise our rights in this area,” Obajtek explained.
He announced that the company will manage Polska Press and will not execute the court’s verdict due to potential loss of controllability of the newly acquired company. This is because in a year or two, Polska Press would lose liquidity and head towards bankruptcy.
Legal expert and attorney Artur Wdowczyk expressed surprise that the company’s CEO was cut out of the information loop in the case and initially unware of the court’s decision.
“These decisions affected the concept of economic freedom. How is it possible that those most interested in the transaction are not informed by the court and instead information is given to a state actor, the Polish Human Rights Commissioner Adam Bodnar,” he emphasized.
Wdowczyk evaluated Bodnar’s role in the affair as “doubtful”, as in the past, the ombudsmen did not deal with merger and acquisition affairs. The expert also noted that Bodnar’s five-year term had expired in September 2020. This raises the question of whether he even has the legitimacy to carry out such actions. Wdowczyk pointed out that in this case the court should turn to the Constitutional Tribunal or await a potentially different ruling, as a motion had already been filed by another subject in the case.