The Commission has published an amended proposal for a Directive to
apply to the company law of Member States and arrangements
established by regulatory bodies dealing with take-over bids for
Supervisory bodies must be designated by the
relevant Member State for the supervision of bids. The Member State
authority responsible for any particular bid will be that in which
the offeree company has its registered office if its securities are
traded on a regulated market in that Member State; otherwise, the
competent authority will be that of the Member State on whose
regulated market the securities of the company were first admitted
to trading; failing that, the competent authority will be that of
the Member State on whose regulated market the company's securities
are principally traded during the period of acquisition of the
securities conferring control on the company. The law applicable
will be that of the same Member State.
The proposal contains mechanisms for protecting
minority shareholders. If a shareholder has a controlling stake in
a company a Member State may provide for mandatory bids to protect
minority shareholders. Any such mandatory bid must be launched to
all shareholders for all or a substantial part of their holdings at
a price which ensures equal treatment for shareholders.
'Substantial part' means at least 70 % of all securities. Only a
supervisory authority may authorise a lesser sum, and then only if
justified. If a Member State does not require a controlling
shareholder to make a mandatory bid, then it must ensure that
measures are in place requiring a controlling shareholder to offer
other appropriate and at least equivalent means of protecting
Member States' regulators will retain authority to
decide what is a controlling stake and whether the Directive
applies to temporary holdings of securities or the acquisition of
majority holdings without intention to exercise control over the
The proposal outlines general principles which
should govern take-over bids. Shareholders of offeree companies
should be treated equally; addressees of a bid should be given
enough time and information to make a properly informed decision;
the board of an offeree company must act in the best interests of
the company as a whole, and false markets must not be created in
the securities of an offeree company.
The proposal also contains rules to ensure that the
board of the offeree company will not, after receiving information
about a bid and before the result of the bid is made public, take
any action to frustrate the offer, without the prior authorisation
of a shareholders' general meeting given for this purpose during
the period of acceptance of the bid.
The supervisory authority and the board of the
offeree company must be informed before a bid is made public. After
publication, the board of the offeree company will be required to
inform its employee representatives or the employees themselves.
The offeror must draw up and make public the offer document, which
must contain certain specified information to allow the addressees
of the bid to reach a properly informed decision within good
Member States will also be required to ensure that
rules exist to govern the withdrawal/nullity of a bid, revision of
a bid, competing bids and disclosure of the result of bids.
The proposal is currently in the Council but it
seems unlikely that it will be adopted in time for the planned date
for transposition into national law of 1 January 1999.