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No 3 (April 96/Avril 96/April 96)
A new and streamlined proposal for a Directive to co-ordinate procedures for takeover bids (the 13th Company Law Directive) was put forward on 7 February 1996 by the Commission. The proposal would ensure that, within the Single Market, shareholders of listed companies enjoyed equivalent safeguards in the case of a change of control and would provide for minimum guidelines for the conduct and transparency of takeover bids. However, the proposal would leave to Member States the choice of how best to meet these requirements, in line with their existing traditions and structures, unlike the previous proposal (put forward in 1989 and amended in 1990) which would have imposed very detailed rules on the Member States.
A pragmatic approach on takeovers
The new proposal is for a "framework" Directive which would establish the same general principles to govern the conduct of takeovers as were featured in the previous proposal, but no longer includes detailed provisions to harmonise how these principles should be applied. Instead, the new proposal would simply require Member States' own rules on takeovers to respect the following principles:
a) equal treatment for all holders of securities in the target company who are
in the same position
With this approach, Member States would be able to implement the Directive's requirements with their own detailed rules which respected their differing national systems and traditions. The new proposed Directive would therefore provide for a structure which allowed national differences to remain provided that these differences did not undermine the common principles and requirements set out by the Directive at Community level.
Does not a framework Directive run the risk of leaving too many differences remaining between Member States' rules?
The proposal for a framework Directive lays down common principles and a limited number of general requirements which Member States would be required to implement through more detailed rules according to their national practices. Indeed, the draft Directive provides for a structure which permits the maintenance of existing national differences. However, these differences cannot go as far as to undermine the common principles and requirements set out at Community level. In addition, the proposed Directive would introduce new elements in some Member States which might not have been provided for before. For instance, a totally new situation would arise for those Member States which currently have no provisions for the protection of minority shareholders.
Opportunities for acquiring companies in different Member States are still uneven. Takeover barriers are mainly due to either the different level of capitalisation of national markets, or to company law provisions which may ensure that the control of a company remains in the hands of "friendly" shareholders even beyond the context of a takeover bid (if for example, certain categories of shares enjoy disproportionate voting rights). There is thus no "level playing field" for takeovers throughout the Union which means that in practice takeover activity is concentrated in a few Member States. The Commission is aware that these obstacles may hamper the restructuring of Community companies.
Would the draft Directive allow the maintenance of self-regulatory systems?
The draft Directive explicitly encourages voluntary control to be exercised by self-regulating bodies in order to avoid recourse to administrative or judicial actions. It also would not affect the power that courts may have in a Member State to decline to hear legal proceedings and to decide whether or not such proceedings affect the outcome of the bid. Furthermore, authorities designated under the Directive to supervise the respect of takeover rules could be private bodies and could enjoy a large degree of discretion in exercising their responsibilities.
Is the mandatory bid considered the only means of protecting minority shareholders?
No. In contrast to the previous proposal, the full mandatory bid (i.e. a requirement to launch a bid for 100% of the shares once a person acquires shares with at least one third of the voting rights) is not specified by the new draft Directive as the only means to protect minority shareholders. Member States would not have to adopt the mandatory bid if they provided for other appropriate and at least equivalent means in order to protect the minority shareholders of a listed company.
One aspect of the proposed 13th Directive relevant to takeover barriers is a provision which prevents the board of the target company from taking defensive measures which may frustrate the bid without having the authorisation of the general meeting of shareholders. This is to ensure that the interests of shareholders are fully taken into account. However, other takeover obstacles are not tackled by the draft 13th Directive because measures to this end have already been adopted by the Council of Ministers or are pending. The 2nd Company Law Directive (77/91/EEC) was amended in 1992 (EC Official Journal N.L 347 of 28/11/1992), with effect from 1 January 1994, so as to extend the rules on the acquisition of the company's own shares to cover acquisitions by subsidiaries. An amendment to the proposal for a 5th Company Law Directive on the structure of public limited companies (O.J. N.C321 of the 12/12/1991), which is still pending, would ensure a broader respect of the principle of proportionality between the shareholder's stake in the capital and his voting rights and facilitate changes in the composition of companies' boards.
Protection of minority shareholders
The proposed Directive aims at ensuring an adequate level of protection for minority shareholders throughout the Union in the case of a change of control of a listed company. Member States would not have to adopt the full mandatory bid method, as was the case in the previous proposal, if they could demonstrate that in their own jurisdiction minority shareholders were given proper protection by alternative means which were just as effective.
The proposed Directive also aims at ensuring that when a takeover occurs, it takes place in a context of legal security where all interested parties have prior knowledge of the conditions under which they should operate. To that end, the new proposal covers most of the field covered by the previous proposal but in a less detailed way. The new proposal retains the obligation for Member States to designate an authority to supervise all aspects of the bid and to ensure that rules are in force giving effect to the requirements for the necessary degree of information and disclosure during the takeover bid. Such an authority could be a self-regulating body recognised by the public authorities in a Member State.
La Commission a adopté le 7 février 1996 une nouvelle proposition, simplifiée, de directive concernant la coordination des procédures relatives aux offres publiques d'achat (13ème directive "droit des sociétés"). Son objectif est d'assurer aux actionnaires des sociétés cotées en bourse des garanties équivalentes au sein du marché unique lorsque leurs entreprises changent de mains et de définir un minimum de règles pour la conduite et la transparence des offres publiques d'achat.
Die Kommission hat am 7. Februar 1996 einen neuen vereinfachten Vorschlag für eine Richtlinie über Übernahmeangebote (13. Gesellschaftsrechtsrichtlinie) angenommen. Ziel dieser Richtlinie ist es, für Aktionäre börsennotierter Gesellschaften gleichwertige Schutzbestimmungen bei Unternehmens-übergängen im Binnenmarkt und Mindestregeln für die Durchführung von Übernahmeangeboten und die Gewährleistung der Transparenz solcher Vorgänge einzuführen. Im Unterschied zum ersten Vorschlag bleiben die Anwendungsmodalitäten den Mitgliedstaaten überlassen.
Proposal for a 13th Company Law Directive concerning takeover bids COM(95)655 Final of 7/02/1996
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