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European Takeover Reform of 2012/2013 — Time to Re-examine the Mandatory Bid

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Abstract

The Thirteenth Directive on Takeover Bids of 2006 has to be revised on the basis of experience gained in the five years of its application. This revision includes an examination of the control structures and barriers to takeover bids for those bids that do not fall within the scope of application of this Directive. On the basis of an examination carried out by Marccus Partners and the Centre for European Policy Studies, the Commission published an Application Report on 26 June 2012, to which the European Parliament responded favourably in its Resolution of 21 May 2013. This has provoked highly controversial discussions in various Member States and beyond. This article carries out a comparative, theoretical and policy analysis of European takeover law, incorporating not only the Thirteenth Directive but also commonalities and differences in takeover law in the Member States as regards the European market for corporate control, with an emphasis on the mandatory bid. While many economic opinions regard the mandatory bid as a mistake (it makes takeovers more expensive), the vast majority of academics and practitioners believe that the mandatory bid as an early exit option plays an irreplaceable role in the protection of minorities, and recent economic theory holds that mandatory bids are beneficial. The objection that the economic costs of the mandatory bid could be saved through improved protection of minorities after the takeover or in groups of companies is unrealistic. There is a whole range of special reform issues regarding the mandatory bid which fall partly within the remit of the European Commission and partly within that of the national legislatures. These issues include: the control threshold; opting up and opting out; low balling and creeping in; exercising control on the basis of a voting agreement; exemptions from the mandatory bid; and share price calculation.

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References

  1. Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids, OJ 2004 L 142/12 of 30 April 2004.

  2. This means that Member States may adopt stricter national rules, such as for the protection of minority shareholders or employees (gold plating). Examples can be found in the price rules, see section 3.2.7 below.

  3. European Commission, Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the Application of Directive 2004/25/EC on takeover bids, Brussels 28 June 2012, COM(2012) 347 final, available at: <http://ec.europa.eu/intemal_market/company/docs/takeoverbids/COM2012_347_en.pdf>. As regards the content of this Application Report, see section 1.3.1 below. See also European Parliament, Resolution of 21 May 2013 on the application of Directive 2004/25/EC on takeovers bids, see section 1.3.2 below for more details.

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  10. Previously, there were three basic historical models of corporate control: shareholder orientation as in the USA, the UK and other Anglo-Saxon countries; company orientation as in Germany and the Netherlands; and mixed as in France, Belgium and Spain. See also E. Wymeersch, ‘Unternehmensführung in Westeuropa’, Die Aktiengesellschaft (1995) p. 299, at p. 305 et seq., with figures from the UK, France, Belgium and Spain; see also ‘The Regulation of Takeover Bids in a Comparative Perspective’, in R. Buxbaum, G. Hertig, A. Hirsch and K. Hopt, eds., European Economic and Business Law (Berlin/New York 1996) p. 291, at p. 294 et seq. These models are now converging. But still, see External Study, supra n. 4, at p. 81: shareholder-oriented (UK), company-oriented (Continental Europe) and management-oriented (USA).

  11. These 42 takeovers are listed in C. Seibt, ‘Übernahmerecht: Update 2010/2011’, Corporate Finance Law (CFL) (2011) p. 213, at p. 214 et seq.

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  13. One of the few cases that has been the subject of a court dispute. Dismissing an action, Court of 1st Instance (Landgericht) Cologne, ZIP (2012) p. 229.

  14. The core of the merger plan was an exchange offer under takeover law by the new Alpha-Beta Netherlands Holding N.V. to the shareholders of Deutsche Börse AG, in conjunction with a reverse triangular merger with NYSE Euronext Inc. For an overview of this incredibly complicated chronology, see Seibt, supra n. 11, at p. 227. See also Prohibition Order of the European Commission of 1 February 2012; see also the summary of the European Commission, Europäische Zeitschrift für Wirtschaftsrecht (EuZW) (2012) p. 123.

  15. On the market for corporate control, see K. J. Hopt, ‘Takeover Defenses in Europe’, 21 Columbia Journal of European Law (2014/15) (forthcoming).

  16. For an American point of view, see J. Gordon, ‘American Experience and EU Perspectives’, in G. Ferrarini, K. Hopt, J. Winter and E. Wymeersch, eds., Reforming Company and Takeover Law in Europe (Oxford 2004) p. 541, at p. 546.

  17. The best introduction is still R. Romano, ‘A Guide to Takeovers: Theory, Evidence and Regulation’, in K. Hopt and E. Wymeersch, eds., European Takeovers–Law and Practice (London 1992) pp. 3–48; see also R. Romano, ‘A Guide to Takeovers: Balancing Competing Concerns’, 9 Yale Journal on Regulation (1992) p. 119. For the development of the takeover theory since H.G. Manne ‘Mergers and the Market for Corporate Control’, 73 Journal of Political Economy (1965) p. 110, see S.M. Davidoff, ‘Takeover Theory and the Law and Economics Movement’ (4 April 2011), available at <http://ssrn.com/abstract=1802733>. Recently, in detail, CEPS External Study, supra n. 4, Ch. 4: Economic Study

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  23. This circumstance, which can often be seen in practice, is now confirmed by new long-term studies, such as U. Malmendier, E. Moretti and F.S. Peters, ‘Winning by Losing: Evidence on the Long-Run Effects of Mergers’ (April 2012), Working Paper: ‘Winners in merger contests (USA, 1985–2009) underperform losers by 50 per cent over the following three years’, but the authors are very careful in drawing consequences; U. Malmendier and G. Tate, ‘Who Makes Acquisitions? CEO Overconfidence and the Market’s Reaction’, 89 Journal of Financial Economics (2008) p. 20; see also Martynova and Renneboog, supra n. 19, at p. 2164, but they are careful due to the particularly serious issue of causality problems in long-term studies.

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  25. In companies with dispersed shareholder structures, there is a conflict of objectives between the protection of shareholders and that of employees. The former are interested in a takeover, the latter are usually critical of a takeover bid since they fear rationalisation measures. Thus, employees and unions represented in the target company usually support their management.

  26. Participation for employees exists in countries with employee participation via the board or supervisory board (see also infra n. 73). Certain special takeover-related participation rights of employees may be problematic and are not usually included in takeover laws. Takeover-related protection of employees is usually ensured by means of transparency: see M. de Vos and J. Heynen, ‘Employee Participation and Takeovers under EC Law’, in Van Hooghten, ed., infra n. 48, p. 89 et seq. Under the UK Takeover Code, employee representatives have the right to give their opinion on the takeover bid. The target company must pay for the publication and for the costs reasonably incurred by the employee representatives in obtaining advice required for the verification of the information contained in that opinion. Cf. Rule 25.9 as revised in 2011 and Rule 2.12 as revised in 2011. For a revision of the Directive in light of employee interests, see B. Sjafjell, ‘The Core of Corporate Governance: Implications of the Takeover Directive for Corporate Governance in Europe’, 22 EBLR (2011) p. 641; idem, Towards a Sustainable European Company Law – A Normative Analysis of the Objectives of EU Law, with the Takeover Directive as a Test Case (Alphen aan den Rijn 2009); see also B.J. Clarke, ‘Directors’ Duties in a Changing World: Lessons from the Cadbury Plc Takeover’, 7 European Company Law (2010) p. 204; idem, ‘Reviewing Takeover Regulation in the Wake of the Cadbury Acquisition: Regulation in a Twirl’, Journal of Business Law (2011) p. 298.

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  28. Generally on the effect of the issue of the direction of the company and behaviour of the management on shareholder value or on the interests of the company, see (too) briefly the External Study, supra n. 4, at p. 76; for more detail, see CEPS External Study, supra n. 4, at p. 342 et seq. Cf. R. Kraakman, et al., supra n. 27, at p. 29 et seq., for further evidence; P. Hall and D. Soskice, eds., Varieties of Capitalism: The Institutional Foundation of Comparative Advantage (Oxford and New York 2001).

  29. With respect to the coordination issues ‘free riding’ and ‘pressure to tender’, see CEPS External Study, supra n. 4, at p. 275 et seq. On free-riding, see S. J. Grossman and O. D. Hart, ‘Takeover Bids, the Free-rider Problem, and the Theory of the Corporation’, 11 The Bell Journal of Economics (1980) p. 42. Squeeze-out is a measure against free-riding, and sell-out a solution to pressure to tender. The mandatory bid also eases the pressure to tender.

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  30. The private benefits of control discussed in economic theory may also include advantages for the controlling shareholder that are useful for other shareholders as well (value-creating versus value-expropriating). Cf. section 3.1.2.2 below, n. 119.

  31. Friendly and hostile takeovers are difficult to distinguish in practice. When a takeover can no longer be avoided, the target company’s management is usually cooperative. Therefore, the difference does not apply to regulation and is not used internationally for this purpose.

  32. For more detail, see K.J. Hopt, Europäisches Übernahmerecht (Tübingen 2013), at p. 84 et seq.

  33. For more detail, see P. Davies and K.J. Hopt, ‘Control Transactions’, in Kraakman, et al., supra n. 27, p. 225, at p. 232. Furthermore, the United Kingdom and the Netherlands (since 2004) have rules that shareholders of the bidder company must be consulted before a takeover bid once a certain threshold has been reached. This reform proposal of the EU was made by J. Winter at the Conference on International Takeover Regulations, Vienna, 9 September 2011.

  34. See, with caution, CEPS External Study, supra n. 4, Ch. 4, on the effect of various rules (such as MBR, BNR and BTR), Table on p. 322, on the effect on competitiveness, p. 323 et seq., and on employment markets, p. 342 et seq., for a summary see pp. 357–358.

  35. Takeover Code of Swiss Stock Markets, 1 September 1989, and the Swiss Commission for Regulation.

  36. On the reasons behind the sluggish development of the takeover market and its regulation in Germany, see K.J. Hopt, ‘European Takeover Regulation: Barriers to and Problems of Harmonizing Takeover Law in the European Community’, in Hopt and Wymeersch, supra n. 17, p. 165: as to institutional and structural factors (capital markets, banking, disclosure and transparency), see p. 167 et seq., and regarding technical legal factors (corporation law, law of groups, labour representation on corporate boards, merger control), see p. 170 et seq.

  37. Securities Acquisition and Takeover Act (WpÜG), 14 July 1995, printed in ZIP (1995) p. 1464.

  38. Under pressure from the British, the possibility of voluntary self-regulation is retained in the Directive, see Preamble, Recital (7): ‘Self-regulatory bodies should be able to exercise supervision.’

  39. K.J. Hopt, ‘Stand der Harmonisierung der europäischen Übernahmerechte–Bestandsaufnahme, praktische Erfahrungen und Ausblicke’, in Mülbert, et al., supra n. 12, p. 42, at p. 60 et seq. for further details.

  40. See supra n. 1.

  41. H.-D. Assmann, T. Pötzsch, U.H. Schneider and U. Bosch, eds., WpÜG, 2d edn. (Cologne 2013).

  42. Ferrarini, Hopt, Winter and Wymeersch, eds., supra n. 16; see also the commentary by J. Wouters, P. Van Hooghten and M. Bruyneel, ‘The European Takeover Directive: A Commentary’, in P. Van Hooghten, ed., The European Takeover Directive and Its Implementation (Oxford 2009) p. 3 et seq., as well as 21 extensive country reports in this volume; for a more cursory approach, see S. Maul, D. Muffat-Jeandet and J. Simon, eds., Takeover Bids in Europe–The Takeover Directive and Its Implementation in the Member States (Freiburg 2008); J. Mukwiri, Takeovers and the European Legal Framework (London and New York 2009); T.G. Papadopoulos, EU Law and the Harmonization of Takeovers in the Internal Market (Alphen aan den Rijn 2010); M. Menjucq, ‘The European Regime on Takeovers’, 5 European Company and Financial Law Review (ECFR) (2006) p. 222; C. Mosca, ‘The Takeover Bids Directive: An Opportunity for Europe or Simply a Compromise?’, 28 Yearbook of European Law (2009) p. 308.

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  43. Hopt, supra n. 45, at p. 43, with evidence of sunset clauses.

  44. Article 20(1), sentences 1 and 2 of the Directive.

  45. External Study, supra n. 4.

  46. Coordinators: C. Clerc and F. Demarigny, both from the Paris branch; cf. the abridged version of this study in book form by C. Clerc, F. Demarigny, D. Valiante and M. de Manuel Aramendia, A Legal and Economic Assessment of European Takeover Regulation (Brussels/Paris 2012).

  47. Except for Bulgaria, Latvia, Lithuania, Malta and Slovenia.

  48. Listed in the Application Report of the Commission, supra n. 3, 2, no. 6, fn. 4, and no. 13, fn. 15.

  49. External Study, supra n. 4, at p. 53. Cf. also the surveys by Clifford Chance, A Guide to Takeovers in the United States (New York 2010), A Guide to Takeovers in the UK (London 2011) and A Guide to Takeovers in Germany (Frankfurt 2012).

  50. Commission Staff Working Document, Report on the Implementation of the Directive on Takeover Bids (Brussels, 21 February 2007), SEC(2007) 268 (hereinafter ‘Commission Staff Working Document’). On this, see K.J. Hopt, ‘Obstacles to Corporate Restructuring: Observations from a European and German Perspective’, in M. Tison, H. de Wulf, C. van der Elst and R. Steennot, eds., Perspectives in Company Law and Financial Regulation (Cambridge 2009) (Essays in Honour of Eddy Wymeersch), p. 373, at p. 378 et seq.

  51. P. Davies, E.-P. Schuster and E. van de Walle de Ghelcke, ‘The Takeover Directive as a Protectionist Tool?’, in U. Bernitz and W.-G. Ringe, eds., Company Law and Economic Protectionism (Oxford 2010) p. 105, also available at: <http://ssrn.com/abstract=1554616>.

  52. On the Commission Staff Working Document and the study by Davies, et al., see Hopt, supra n. 45, at pp. 43–47.

  53. Commission Staff Working Document, supra n. 57, at p. 10. On this and other protectionist tendencies in Member States, see Hopt, supra n. 45, at pp. 46–47.

  54. Illustrated by Davies, et al., supra n. 58, at p. 155.

  55. Application Report of the Commission, supra n. 3, 2, nos. 9 and 10; External Study, supra n. 4, at p. 18; this assessment can also be found in Hopt, supra n. 45, at pp. 45–46; E. Wymeersch, ‘The Takeover Directive, Light and Darkness’, at p. 14, available at <http://ssrn.com/abstract=1086987>.

  56. See supra n. 3.

  57. Application Report, supra n. 3, 1, no. 3.

  58. Ibid., 2, no. 6. This finding applies to the most important though not all Member States, but fits in with the conclusions that no major changes have taken place.

  59. Ibid., 3, no. 19, following on from the External Study, supra n. 4, at p. 35; this lists 15 Member States out of 22 examined.

  60. Application Report, supra n. 3, 2, no. 7.

  61. Ibid., Annex, Fig. 4, with reference to the External Study, supra n. 4, at p. 48.

  62. Application Report, supra n. 3, 2, no. 14.

  63. Ibid., 4, nos. 21–28.

  64. Under the Directive, the protection of employees (see supra n. 30) is ensured through information, e.g., Articles 6(2) and (3) and 8(2), and through the opinion of the management board and supervisory board of the target company. Cf. High-Level Group of Company Law Experts, Report on Issues Related to Takeover Bids, Brussels, 10 January 2002, Ch. 1, Section 5: Level Playing Field Between the EU and the USA (also in Ferrarini, Hopt, Winter and Wymeersch, supra n. 16, p. 825, at p. 867 et seq., Annex 2) available at: <http://ec.europa.eu/intemal_market/company/docs/takeoverbids/2002-01-hlg-report_en.pdf>, Ch. 1, Section 2.1: ‘Shareholders should be able to decide for themselves and stakeholders should be protected by specific rules (e.g. on labour law or environmental law).’ Individual Member States go beyond this, for instance, by granting the Works Council a right of consultation as in France, Belgium and the Netherlands, or even a right to listen to the bidder, as in France and Belgium, see External Study, supra n. 4, at p. 102. Article 3(2)(c) moreover states that the management body of the target company ‘must act in the interests of the company as a whole’; on this stakeholder-oriented approach, see K.J. Hopt, ‘Comparative Corporate Governance: The State of the Art and International Regulation’, LIX American Journal of Comparative Law (2011) p. 1, at p. 28 et seq. Besides this, normal rights of co-determination, cooperation, protection and information arising from general employment law also apply. Regarding the strengthening of employee rights in the United Kingdom after the takeover of Cadbury by Kraft, see External Study, supra n. 4, at p. 103 et seq., particularly with respect to a minimum 12-month commitment of the bidder to its statements; see also UK Takeover Code Rule 19.1, Note 3, and Takeover Panel Code Committee, Review of the 2011 Amendments to the Takeover Code, 2012/8, 26.11.2012, para. 7. Employee protection during takeovers is also provided outside the European Union, but usually via information requirements in the offer document, see External Study, supra n. 4, at p. 114 et seq., including a table. On the protection of employees through the right of consultation during takeovers, see supra section 1.1.2.2, n. 30.

  65. European Parliament, Resolution of 21 May 2013, supra n. 3.

  66. European Company Law Experts (ECLE), ‘Response to the European Commission’s Consultation on the Future of European Company Law’ (May 2012), para. 5(d), available at: <http://www.ecle.eu> and at <http://ssrn.com/abstract=1912548>.

  67. Cf. the controversy in the 1990s over whether this competition is a race to the bottom (example: the management-friendly corporation law of Delaware) or to the top, leading to the best result from an economic perspective and from the viewpoint of shareholders.

  68. Evidence in Hopt, supra n. 45, at p. 49; recently, J. Lau Hansen, ‘The Directive on Takeover Bids: Unwanted Harmonisation of Corporate Law’, in H.S. Birkmose, M. Neville and K. Engsig Sorensen, eds., The European Financial Market in Transition (Alphen aan den Rijn 2012) p. 29 et seq. The arguments brought forward for a retransfer of powers to the Member States are very heterogeneous: partly they favour legislative competition, or promote decentralisation and subsidiarity, or underline the advantages of option rules (see section 3.2.2 below), or they are specific arguments against individual harmonisation candidates.

  69. Freshfields Bruckhaus Deringer, Reform of the EU Takeover Directive and of German Takeover Law. Survey Report, November 2011 (hereinafter ‘Survey Report’): survey of 375 selected experts; on this, see C. Seibt, ‘Reform der EU-Übernahmerrichtlinie und des deutschen Übernahmerechts’, ZIP (2012) p. 1 (hereinafter ‘Expert Poll’).

  70. No comment is made here on the appropriateness of statutory measures to create a level playing field. The term itself and its meaning are the subject of much economic debate due to the fact that it tends to cancel out competition between legislators and regulators, see section 2.1.1 above.

  71. The order of preference or specification is different in the English version (Survey Report, supra n. 79, at p. 15, as in this text) and the German version (Expert Poll, supra n. 79).

  72. ‘Board neutrality rule and prohibition of frustrating actions (in particular (a) prohibition of company law instruments allowing takeover bids to be frustrated, such as multiple voting rights, golden share schemes, and (b) national interest test regulation)’, Survey Report, supra n. 79, at p. 15, no. 4.

  73. J. Meyers, ‘Agenda Items for the Revision of the European Takeover Bid Directive’, in C. Van der Elst, H. De Wulf, R. Steennot and M. Tison, eds., Van alle markten: Liber Amicorum Eddy Wymeersch (Antwerp and Oxford 2008) p. 693; on insider law, ibid., at p. 703 et seq.; M. Nelemans and M. Schouten, ‘Takeover Bids and Insider Trading’ (August 2012), available at <http://ssrn.com/abstract=2147360>, also in S.M. Bainbridge, ed., Research Handbook on Insider Trading (Cheltenham, UK 2013) p. 449; K. Lorez, Insider Dealing in Takeovers. Developments in Swiss and EU Regulation and Legislation (Zürich 2013); K.J. Hopt, ‘Übernahmen, Geheimhaltung und Interessenkonflikte: Probleme für Vorstände, Aufsichtsräte und Banken’, ZGR (2002) p. 333, at p. 336 et seq.; see also OECD, Conflicts of Interest and the Market for Corporate Control, 16–17 April 2008. This issue is supposed to be addressed during the reform of the Market Abuse Regulation (MAR); on this, see Council of the European Union, 31 October 2012, 15707/12, Presidency Compromise, Recitals (12a), (13) and (14a), Article 5(28): definition of stakebuilding, Article 6(2): protracted process, Article 7a(3a): inside information obtained through due diligence of a company in view of a possible merger or public takeover, and Art. 12(3): delay in publication in case of a protracted process. The version is still the subject of intense debate.

  74. B. Clarke, ‘Reinforcing the Market for Corporate Control’, 22 EBLR (2011) p. 517.

  75. J. Von Lackum, O. Meyer and J.-A. Witt, ‘The Offering of Shares in a Cross-Border Takeover’, 5 ECFR (2008) p. 101.

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  80. L. Enriques, R.J. Gilson and A.M. Pacces, ‘The Case for a Neutral Takeover Law in the European Union’, preliminary version (April 2012), which is an elaboration of the thesis of Enriques, supra n. 89, and was presented in Tilburg on 4 December 2011 and at the Oxford Takeover Conference on 20 April 2012; the presenter was L. Enriques and the respondent K.J. Hopt.

  81. R. J. Gilson, H. Hansmann and M. Pargendler, ‘Regulatory Dualism as a Development Strategy: Corporate Reform in Brazil, the United States, and the European Union’, 63 Stanford Law Review (2011) p. 475, with reference to the general theory of Mancur Olson.

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  82. See also CEPS External Study, supra n. 4, at p. 287. For a different and more special approach–whereby Article 9 is only optional–which is in favour of the possibility to opt out from a general prohibition of frustrating action, see Davies, Schuster and Van de Walle de Ghelcke, supra n. 58, at p. 158 et seq.

  83. This addresses a highly complex and controversial problem that touches on basic issues of law and economics and cannot be discussed in any detail here, namely whether or not the legislature is entitled to purport to know better and to determine what is best for shareholders (presumption of knowledge) or to guide the decision of the shareholders into a particular direction in their own interest. See the discussion on liberal paternalism in R. Thaler and C. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (New York, et al. 2009).

  84. K. J. Hopt, ‘Company Law Modernization: Transatlantic Perspectives’, 51 Rivista delle Società (2006) p. 906.

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  85. Similarly, CEPS External Study, supra n. 4, at p. 289. On the anti-frustration rule, see Hopt, supra n. 36, at pp. 69–105; on supervision, idem, at pp. 106–117, and Hopt, supra n. 15.

  86. Generally, for example, S. Grundmann, W. Kerber and S. Weatherill, eds., Party Autonomy and the Role of Information in the Internal Market (Berlin 2001). Especially in the context of takeovers, see K. Engsig Sorensen, ‘Disclosing Barriers to Takeovers’, in Birkmose, Neville and Engsig Sorensen, supra n. 78, at p. 69 et seq.; also, External Study, supra n. 4, at pp. 45 et seq., and 245 et seq., and CEPS External Study, supra n. 4, at p. 295 et seq. Also, M. Schouten, ‘The Case for Mandatory Ownership Disclosure’, 15 Stanford Journal of Law, Business & Finance (2009) p. 127.

  87. E. Wymeersch, ‘A New look at the Debate About the Takeover Directive’, in Festschrift für Hommelhoff (Cologne 2012) p. 1375, at p. 1378 et seq., and Revue Trimestrielle de Droit Financier (2012) p. 78.

  88. According to proponents of a neutral takeover law, see section 2.2.2 above.

  89. Already in 1990 there was talk of in excess of 500 mandatory bids; see P. Lee (of the Takeover Panel), ‘Takeover Regulation in the United Kingdom’, Europäisches Wirtschafts- und Steuerrecht (EWS) (1990) p. 241, at p. 243.

  90. Already in 1970, ibid. This evidently still applies today; see comments by Veil, supra n. 8: good to excellent. In greater detail, N. Jennings, ‘Mandatory Bids Revisited’, 5 Journal of Corporate Law Studies (2005) p. 37.

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  91. C. Bolle, A Comparative Overview of the Mandatory Bid Rule in Belgium, France, Germany and the United Kingdom (Baden-Baden 2008).

  92. CEPS External Study, supra n. 4, at p. 289. For the United Kingdom, C. Crawshay, ‘Mandatory Bids in the U.K.’, in R. Veil, ed., Übernahmerecht in Praxis und Wissenschaft (Cologne 2009) p. 83, at p. 89: there are around 10 mandatory bids per year and between 100 and 300 friendly takeover bids. According to H. Merkt, ‘Das übernahmerechtliche Pflichtangebot in der Reformdiskussion’, in Festschrift für Eberhard Schwark (Munich 2009) p. 529, at p. 533, the share in the United Kingdom is around 7% and that in Austria 17%.

  93. Merkt, ibid., at p. 533, who correctly links the differences to the differing shareholder structures. The more widespread the companies with controlling shareholders, the lower the number of mandatory bids. Regarding the fact that the number of exemptions from mandatory bids is very high, see section 3.2.6 below.

  94. Commission Staff Working Document, supra n. 57, 2.2.1, at p. 9 et seq., with Annex 2 (Conditions triggering the obligation to make a mandatory bid) and Annex 3 (Derogations provided at the level of law, derogatory powers of the supervisory body/authority).

  95. Wouters, Van Hooghten and Bruyneel, supra n. 48, at p. 75: the mandatory bid is ‘one of the Directive’s main achievements’ and ‘increases legal certainty for practitioners’.

  96. External Study, supra n. 4, at p. 117.

  97. Comprehensive overview of German discussion in Merkt, supra n. 102, at p. 532.

  98. J.A. McCahery and L. Renneboog, The Economics of the Proposed European Takeover Directive (CEPS 2003), at p. 52 et seq.; M.C. Burkart and F. Panunzi, ‘Mandatory Bids, Squeeze-out, Sell-out and the Dynamics of the Tender Offer Process’, in Ferrarini, Hopt, Winter and Wymeersch, eds., supra n. 16, p. 737; L. Enriques, ‘The Mandatory Bid Rule in the Proposed EC Takeover Directive’, in Ferrarini, Hopt, Winter and Wymeersch, eds., supra n. 16, p. 767 et seq., at p. 794: currently the ‘lesser evil’. See also E. Wymeersch, ‘The Mandatory Bid: A Critical View’, in Hopt and Wymeersch, supra n. 17, p. 351; as regards Sweden, see R. Skog, Does Sweden Need a Mandatory Bid Rule? A Critical Analysis (Stockholm 1995), at p. 27 et seq.; concerning Denmark, see J. Lau Hansen, ‘When Less Would Be More: The EU Takeover Directive in Its Latest Apparition’, 9 The Columbia Journal of European Law (2003) p. 275, at p. 289 et seq.

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  99. R. Romano, ‘The Political Economy of Takeover Statutes’, 73 Virginia Law Review (1987) p. 111; S.M. Sepe, ‘Private Sale of Corporate Control: Why the European Mandatory Bid Rule Is Inefficient’, Arizona Legal Studies Discussion Paper 10–29 (2010). For a differing view, see L.A. Bebchuk, ‘Efficient and Inefficient Sales of Corporate Control’, 109 Quarterly Journal of Economics (1994) p. 957, in comparing the US ‘market rule’ and the ‘equal opportunity rule’ in other countries. Another positive view can be found in M. Ventoruzzo, ‘Europe’s Thirteenth Directive and U.S. Takeover Regulation: Regulatory Means and Political and Economic Ends’, 41 Texas International Law Journal (2006) p. 171, at p. 214; on the legal position in the USA, see J. Berick and T. Shropshire, ‘The EU Takeover Directive in Context: A Comparison to the US Takeover Rules’, in Van Hooghten, ed., supra n. 48, p. 103 et seq.; see also External Study, supra n. 4, at pp. 122 and 174.

  100. According to these statutes, where someone acquires control of a company or a block of 20% (Pennsylvania), 25% (Maine) or 50% (South Dakota), minority shareholders have a cash-out right at a ‘fair price’, see External Study, supra n. 4, at pp. 122 and 174.

  101. Rule 14-d10 Sec. Exch. Act of 1934 as revised in 2006. This rule does not apply during a merger.

  102. L. Enriques, ‘The Mandatory Bid Rule in the Takeover Directive: Harmonization Without Foundation’, 1 European Company and Financial Markets Law Review (2004) p. 440; A.M. Pacces, Featuring Control Power (Rotterdam 2007), at pp. 664 et seq., 670 et seq. and 768 et seq.; idem, Rethinking Corporate Governance: The Law and Economics of Control Powers (London and New York 2012), at p. 338 et seq.; McCahery and Vermeulen, supra n. 88, at p. 2195 et seq.; Wymeersch, supra n. 97; Lau Hansen, supra n. 78.

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  103. C. Bolle, supra n. 101, at pp. 31 et seq. and 279 et seq.; P.L. Davies, ‘The Notion of Equality in European Takeover Regulation’, in J. Payne, ed., Takeovers in English and German Law (Oxford 2002) p. 9; Davies and Hopt, supra n. 38, at p. 252 et seq. A recent, clear and economically argued statement in favour of the mandatory bid, which expressly does not put forward equality and fairness arguments but promotes growth in synergies, may be found in E.-P. Schuster, ‘The Mandatory Bid Rule: Efficient, After All?’, 76 Modern Law Review (2013) p. 529. Similarly, H. de La Bruslerie, ‘Equal Opportunity Rule vs. Market Rule in Transfer of Control: How Can Private Benefits Help to Provide an Answer?’, 23 Journal of Corporate Finance (2013) p. 88, cf. also at p. 106: ‘The exit option given to outside shareholders is a tool to curb possible future private expropriation.’

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  104. Davies, et al., supra n. 58, at p. 106, note 4; Davies and Hopt, supra n. 38, at p. 254; see also Bebchuk, supra n. 109, at p. 968 et seq.; M. Kahan, ‘Sales of Corporate Control’, 9 Journal of Law, Economics and Organization (1993) p. 368.

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  105. Survey results of the External Study, supra n. 4, at p. 184. For this reason, even before the Directive raised the issue of the mandatory bid, in Sweden and in Finland there were already calls from block shareholders and management for such a construct. See External Study, ibid., at p. 123 et seq.

  106. Not recognised by the CEPS External Study, supra n. 4, at p. 291, which mentions ex post protection.

  107. These are not identical to the private benefits of control discussed in economic theory, which also include the advantages of the controlling shareholder that benefit other shareholders as well (value-creating versus value-expropriating). There is a great deal of law and finance literature discussing these issues; see A. Dyck and L. Zingales, ‘Private Benefits of Control: An International Comparison’, 59 The Journal of Finance (2004) p. 537: in the country list included there (cf. control premiums, Calculation Table II at p. 551; institutional variables, Table VIII at p. 580) the rankings range from 1% (USA, United Kingdom), 2% (France), up to 37% (Italy), 38% (Austria) and 65% (Brazil); all figures are also mentioned briefly in the External Study, supra n. 4, at p. 124. A recent contribution worthy of merit is Pacces, supra n. 112, at p. 273. See also CEPS External Study, supra n. 4, at p. 273.

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  108. This is the central argument put forward by Pacces, ibid., passim, summarised at p. 768: ‘When control is entrenched and non-controlling shareholders are protected from expropriation, unequal treatment of shareholders is preferable to the mandatory bid.’ Yet both these preconditions are not self-evident. At least with respect to European takeover law account must be taken of the fact that there are 28 Member States with great differences in supervisory authorities and courts; see infra n. 128.

  109. Davies and Hopt, supra n. 38, at p. 253, pose further arguments, including that the mandatory bid is an answer to the coordination problem of minority shareholders as against the bidder, because there is no ex ante certainty as to whether or not the offer is generally beneficial.

  110. In the USA, those who acquire a controlling block shareholding require the authorisation of the company’s board for certain transactions for a period of three to five years. Cf. also External Study, supra n. 4, at p. 110.

  111. On the relevance of trust of shareholders in the capital markets, see N. Moloney, ‘Confidence and Competence: The Conundrum of EC Capital Markets’, 4 Journal of Corporate Law Studies (2004) p. 1.

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  112. A. Viandier, OPA, OPE et autres offres publiques, Vol. 2, 4th edn. (Paris 2010): Garantie de cours, nos. 2300 et seq.

  113. C. Diregger, S. Kalss and M. Winner, Das österreichische Übernahmerecht, 2nd edn. (Vienna 2007), at p. 109 et seq.

  114. This is a functional statement. There are two reasons for the mandatory bid in the United Kingdom: early exit and equivalent treatment, P. Davies and S. Worthington, in Gower and Davies, Principles of Modern Company Law, 9th edn. (London 2012), at pp. 28–46, and 1067 et seq. A further aim of the mandatory bid may be to maintain the integrity of the election process, cf. also supra n. 120. For a discussion of the purposes, see also G. Psaroudakis, ‘The Mandatory Bid and Company Law in Europe’, 7 ECFR (2010) p. 550, at p. 551 et seq.

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  115. Gower and Davies, ibid., at pp. 28–46 and 1067.

  116. See section 3.1.2.2. For further details, see CEPS External Study, supra n. 4, at pp. 291 and 281, n. 326; for greater detail, see Pacces, supra n. 112, at pp. 661 et seq., 682 et seq., 699 et seq., and 703 et seq., regarding fiduciary duties that consistently view the American model as superior to the British model. See also Wymeersch, supra n. 97, at p. 1385 et seq., for rules about conflicts of interest and self-interested transactions within a group (related party transactions, private benefits of control), such as disclosure, involvement of experts, and control by the board or supervisory board and perhaps by the general meeting of shareholders. The further suggestion to exempt from the mandatory bid those private control transactions that do not give any ‘private benefits’, ibid., at p. 1385 et seq., is practically difficult to implement with legal certainty; how would a supervisory board establish this under Article 4(5) of the Directive? On the exemptions from the mandatory bid and the corresponding wide discretion of supervisory authorities, see section 3.2.6 below.

  117. E. Berglöf and M. Burkart, ‘European Takeover Regulation’, 36 Economic Policy (2003) p. 173, at p. 195 for takeover defences and at p. 196 for the mandatory bid rule. Cf. also M. Burkart, D. Gromb, H.M. Mueller and F. Panunzi, ‘Legal Investor Protection and Takeovers’ (1 April 2011), available at: <http://ssrn.com/abstract=1854367>. Improved investor protection may improve the efficiency of the takeover results if external financing is taken into consideration.

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  118. Preamble, Recital (9) of the Directive.

  119. As in Belgium, Germany, Finland, France, since the reform of 22 October 2010 (previously 1/3), Ireland, Italy, the Netherlands, Austria, Sweden, the Czech Republic, the United Kingdom and Cyprus, see External Study, supra n. 4, at p. 128 et seq. A second stage is envisaged by Finland (50%), Poland (66%) and Portugal (50%), ibid.; on the second control threshold, see section 3.2.3 below. Despite countries having the same control threshold, there may still be differences in calculation, such as regarding the allocation of voting rights (see section 30 of the WpÜG, thus incorrect or at least unclear in the External Study, supra n. 4, at p. 132).

  120. Greece, Luxembourg, Poland, Portugal, Rumania, Slovakia, Hungary, ibid.

  121. Cf., with case studies, J. Grant, T. Kirchmaier and J. A. Kirshner, ‘Financial Tunneling and the Mandatory Bid Rule’, 10 European Business Organization Law Review (EBOR) (2009) p. 234.

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  122. Survey Report, supra n. 79, at p. 25; Expert Poll, supra n. 79, at p. 7, there 71.3%.

  123. Sepe, supra n. 109, at p. 20 et seq.: actual control in the target company or average actual control in the respective country; sympathising, CEPS External Study, supra n. 4, at p. 292: dynamic threshold; see also A. Cahn, ‘Der Kontrollbegriff des WpÜG’, in Mülbert, et al., supra n. 12, p. 77, at p. 107, stating that at a quite considerable number of companies, attendance at general meetings of shareholders is below 60%, on this ibid., at p. 94 et seq.

  124. Discussion Report in Mülbert, et al., supra n. 12, at p. 108.

  125. The reasons were not that there had been unfavourable experiences with the material control threshold, they were far more complex. On the earlier and current control thresholds, see Diregger, Kalss and Winner, supra n. 124, marginal notes 179 et seq.

  126. This was suggested for new companies by the Italian CONSOB (Commissione Nazionale per le Società e la Borsa) on 25 July 2011, down to 25% and up to 35%.

  127. Article 32(1), sentence 2, BEHG (Bundesgesetz über die Börsen und den Effektenhandel); K. Hofstetter and E. Schilter-Heuberger, in R. Watter and N.P. Vogt, eds., Börsengesetz, Finanz-marktaufsichtsgesetz, 2nd edn. (Basel 2011), Article 32 BEHG, marginal note 58 et seq., at p. 149; U. Schenker, Schweizerisches Übernahmerecht (Bern 2009), at p. 538. Cf. also M. Glatthaar, R. Bernet and J. Luginbühl, Swiss Takeover Law (Zürich 2013).

  128. Article 22(2) and (3) BEHG; Hofstetter and Schilter-Heuberger, supra n. 143, Article 32 BEHG, marginal note 18 et seq.; Schenker, supra n. 143, at p. 530 et seq.; H. Peter and P. Bovey, Droit suisse des OPA (Bern 2013), nos. 446 et seq. It is notable that the statutory amendments mentioned in Article 22(2) and (3) may be made by the general meeting of shareholders by simple majority and without an attendance or majority requirement, see R. Tschäni, J. Ifflad and H.-J. Diem in Watter and Vogt, supra n. 143, Article 22 BEHG, marginal note 23 at the end.

  129. Tschäni, Ifflad and Diem, ibid., Article 22 BEHG, marginal note 18 et seq.; on the dispute about the possibility of a renewed opting-in after having opted out, ibid., Article 22 BEHG, marginal note 28 et seq.

  130. For the details on the new policy adopted by the Swiss Takeover Board since October 2012, see Peter and Bovey, supra n. 144, nos. 469 et seq.; see also, briefly, External Study, supra n. 4, at p. 168.

  131. Hofstetter and Schilter-Heuberger, supra n. 143, Article 32 BEHG, marginal note 149; K. Hofstetter, ‘One Size Does Not Fit All: Corporate Governance for “Controlled Companies”’, 31 North Carolina Journal International Law and Commercial Regulation (2006) p. 597, at pp. 636 et seq. and 646 et seq.

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  132. Peter and Bovey, supra n. 144, no. 447.

  133. Ibid., this one company is the Swatch Group AG; Tschäni, Ifflad and Diem, supra n. 144, Article 22 BEHG, marginal note 22.

  134. Apparently different for Borsa Italiana, supra n. 142.

  135. See section 3.1.2.2 with n. 122 (Moloney).

  136. Schenker, supra n. 143, at p. 532.

  137. Survey Report, supra n. 79, at p. 26, which addresses only the issue of a lower control threshold; Expert Poll, supra n. 79, at p. 7.

  138. The definitions are unclear and disputed. Low balling and creeping in are often used synonymously. If a differentiation is to be made, low balling should be used for the attempt by the bidder, where possible, to exceed the 30% mandatory bid threshold as cheaply as possible; creeping in should be used when it comes to the question whether a second mandatory bid must be submitted. Creeping in can also be used for acquisitions up to 30%, creeping on for acquisitions up to 50% and definitive legal control for acquisitions from 50%.

  139. J. Tyrolt and C. Cascante, ‘Pflichtangebotsbefreiung durch Übernahmeangebot und Mindestpreisregelungen’, in Mülbert, et al., supra n. 12, p. 110, at p. 111 et seq.

  140. Comparative evidence in External Study, supra n. 4, Table, at pp. 129–130.

  141. As regards Austria, see Diregger, Kalss and Winner, supra n. 124, marginal note 218 et seq. See Expert Poll, supra n. 79, at p. 7; Tyrolt and Cascante, supra n. 157, at p. 142.

  142. Except for France and Austria. The threshold in Italy and Greece is 3%; in the United Kingdom, it is one share, External Study, supra n. 4, at p. 127; Tyrolt and Cascante, supra n. 157, at p. 142.

  143. Loi no. 2010–1249 du 22 octobre 2010 de régulation bancaire et financière, J.O. no. 247 du 23.10.2010, p. 18984, available at: <http://www.joumal-officiel.gouv.fr/frameset.html>; Hopt, supra n. 45, at p. 65.

  144. Takeover Code Rule 9.1. Takeover bids and mandatory bids may only be completed if the bidder holds more than 50% of the voting rights in the target company at the end of the process. See also External Study, supra n. 4, at pp. 127 and 146.

  145. Seibt, supra n. 11, at p. 214 et seq., with list of cases and other information.

  146. Survey Report, supra n. 79, at p. 27; Expert Poll, supra n. 79, at p. 7.

  147. See supra notes 173 et seq. Supported by, for example, Merkt, supra n. 102, at p. 545.

  148. Von Bülow, supra n. 12, at p. 38 et seq., and, following him, the vast majority in the discussion. On the alternative solution, following the British rule not to allow any additional purchases that would exceed the 30% threshold but not reach the 50% threshold, see section 3.2.3 above, n. 159.

  149. Listed in S. Kalss, ‘Creeping-in und Beteiligungstransparenz’, in Kaemmerer and Veil, supra n. 8, IV.4.

  150. In general, see R. Veil, in R. Veil, ed., Europäisches Kapitalmarktrecht (Tübingen 2011), § 16 Beteiligungstransparenz (transparency of investment), § 19 Übernahmerechtliche Publizität (takeover-related disclosure).

  151. Tyrolt and Cascante, supra n. 157, at p. 142 et seq.

  152. Directive 2013/50/EU of the European Parliament and of the Council of 22 October 2013 amending Directive 2004/109/EC of the European Parliament and of the Council on the harmonisation of transparency requirements OJ 2013 L 294/1. See also Mazars, Transparency Directive Assessment Report, on acting in concert, at p. 108 et seq., available at: <http://ec.europa.eu/intemal_market/securities/docs/transparency/report-application_en.pdf>.

  153. C. Seibt and B. Wollenschläger, ‘Europäisierung des Transparenzregimes, Der Vorschlag der Europäischen Kommission zur Revision der Transparenzrichtlinie’, AG (2012) p. 305, at p. 311 et seq.

  154. Seibt, supra n. 11, at p. 229, with reference to Schaeffler/Continental, in which Metzler and Sal. Oppenheim private banks were involved to ensure that Schaeffler was never able to buy 50% or more of the shares in Continental AG, as approved by BaFin.

  155. External Study, supra n. 4, at p. 38.

  156. Clarke, supra n. 84. Cf., more generally, Ferrarini, ‘Equity Derivatives and Transparency: When Should Substance Prevail?’, Festschrift für Klaus J. Hopt, supra n. 88, p. 1803.

  157. On the Commission Proposal, Commercial Law Committee of the German Bar Association, ‘Opinion’, NZG (2012) p. 770; Seibt and Wollenschläger, supra n. 176.

  158. Examination of the bid by an independent body, Art. 26 et seq. Takeover Regulation; D. Gericke and K. Wiedmer, Kommentar Übernahmeverordnung (UEV) (Zürich 2011), Art. 26 et seq. Fairness opinions are often sought in American practice; see section 3.2.6, n. 207 below.

  159. Art. 231-13, I du Règlement Général; Viandier, supra n. 123, no. 1072 et seq.

  160. Commission Staff Working Document, supra n. 57, at p. 10 and details in Annex 3.

  161. See section 1.3.2 above.

  162. For details on whitewash in the United Kingdom, see City Code, Appendix 1 (Whitewash Guidance Note). Such a decision would be void in Germany pursuant to Section 241(3) of the German Stock Corporation Act (AktG), but a recommendation of the general meeting of shareholders would be possible under exemption proceedings pursuant to Section 37 of the German Takeover Act (WpÜG).

  163. External Study, supra n. 4, at p. 140 et seq., Summary Table at p. 152, no. 2. This is the case in most large non-EU states, namely in regard to capital increases, during major restructuring and when gaining control, ibid., at p. 41.

  164. Compare EFTA Court, Case E-1/10 (Periscopus), 10 December 2010; H. Krause, ‘Periscopus and Clear Criteria in European Public Takeover Legislation’, ECFR (2011) p. 70; T. Papadopoulos, ‘Acquisition of Corporate Control and Clear Criteria in the Adjustment of the Mandatory Bid Price’ (24 March 2013), available at: <http://ssrn.com/abstract=2238603>.

  165. External Study, supra n. 4, Summary Table at p. 152 et seq.

  166. Such as for public joint investments that do not fall within the mandatory bid rules, Application Report, supra n. 3, 3, no. 17.

  167. Cf. External Study, supra n. 4, at p. 143.

  168. Including the question under what conditions it involves ‘acting in concert’ when group members carry out transactions among themselves, Application Report, supra n. 3, 3, no. 17.

  169. Schemes of arrangement are mainly to be found in the United Kingdom, Ireland and former Commonwealth countries. The Takeover Code is applicable, in principle subject to the exceptions in Appendix 7. See also External Study, supra n. 4, at p. 172 et seq.; R. Bork, ‘The Scheme of Arrangement’, International Insolvency Law Review (IILR) (2012) p. 477.

  170. J. von Hein, ‘Zur Kodifikation des europäischen Übernahmekollisionsrechts’, ZGR (2005) p. 528, at p. 560 et seq. See also External Study, supra n. 4, at p. 98: exclusionary bids.

  171. External Study, supra n. 4, at pp. 122, 139–155, with meticulous listing and categorisation of over 35 different exemptions. On the statistics for Germany, including tables, see Seibt, supra n. 11, at p. 233.

  172. Merkt, supra n. 102, at p. 536.

  173. Survey Report, supra n. 79, at p. 28; Expert Poll, supra n. 79, at p. 8.

  174. On the restructuring exemption under BaFin procedures, see Seibt, supra n. 11, at p. 235 et seq., including restructuring with dual-trustee structures.

  175. See supra n. 2.

  176. External Study, supra n. 4, at p. 158.

  177. Von Bülow, supra n. 12, at p. 36 et seq., and discussion, at p. 73. But the stock market price is still a market valuation, even if not always accurate. Also, there are problems with valuations made in other ways. As a last resort, BaFin would be called upon to assess the price, but this was not envisaged by the legislature and BaFin does not want this responsibility.

  178. Tyrolt and Cascante, supra n. 157, at p. 126.

  179. Seibt, supra n. 11, at p. 217.

  180. Ibid., at p. 224 et seq.

  181. Article 3(1)(a) of the Directive expressly states that all holders of the securities of an offeree company ‘of the same class’ must be afforded equivalent treatment.

  182. External Study, supra n. 4, at p. 99: ‘post-bid top-up clause’, ‘class struggle’; for a legal comparative view regarding the latter, see also at p. 110.

  183. G. Giuliani, ‘La réforme des offres publiques d’acquisition’, Revue de Droit Bancaire et Financier (2006) p. 55, at p. 58 et seq.

  184. External Study, supra n. 4, at pp. 96 and 156 et seq. Fairness opinions are also common in US practice, ibid., at p. 113, and supra n. 181.

  185. Article 32(4) BEHG; Hofstetter and Schilter-Heuberger, supra n. 143, Article 32 BEHG, marginal notes 110 et seq., and 112; on block premiums, see marginal note 149.

  186. Swiss Takeover Commission, Kontrollprämie, Letter to the Eidgenössische Finanzdepartement (Zürich, 21 January 2011), with substantial data and different reform proposals. Art. 32(4) was amended by the law of 28 September 2012. For details, see Peter and Bovey, supra n. 144, nos. 352 et seq.

  187. External Study, supra n. 4, at pp. 159 et seq. and 180.

  188. Expert Poll, supra n. 79, at p. 8.

  189. As estimated by Tyrolt and Cascante, supra n. 157, at p. 145.

  190. Contra J. Winter, lecture at the Conference of International Takeover Regulations, Vienna, 9 September 2011.

  191. Psaroudakis, supra n. 126.

  192. Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC, OJ 2004 L 390/38 of 31 December 2004. The definition in Article 10(a) states: ‘[V]oting rights held by a third party with whom that person or entity has concluded an agreement, which obliges them to adopt, by concerted exercise of the voting rights they hold, a lasting common policy towards the management of the issuer in question.’ The reform of the Transparency Directive (22 October 2013) (see supra n. 175) leaves Article 10(a) unchanged.

  193. Directive 2007/44/EC of the European Parliament and of the Council of 5 September 2007 amending Council Directive 92/49/EEC and Directives 2002/83/EC, 2004/39/EC, 2005/68/EC and 2006/48/EC as regards procedural rules and evaluation criteria for the prudential assessment of acquisitions and increase of holdings in the financial sector, OJ 2007 L 247/1 of 21 September 2007. According to the text of the Level 3 Guidelines ‘persons are “acting in concert” when each of them decides to exercise his rights linked to the shares he acquires in accordance with an explicit or implicit agreement made between them’.

  194. Application Report, supra n. 3, 3, no. 16; External Study, supra n. 4, at p. 132 et seq.

  195. For Belgium, see X. Dieux and J. Legein, ‘Questions relatives à la notion de concert en droit belge’, Forum Financier/Droit bancaire et financier (2012) p. 143. For France, see Law no. 2010-1249 of 22 October 2010. On this reform of takeover law in France, see Hopt, supra n. 45, at p. 65, and most recently, T. Bonneau and A. Pietrancosta, ‘Acting in Concert in French Capital Markets and Takeover Law’, Revue Trimestrielle de Droit Financier (2013) p. 17, with extensive case law.

  196. For France, see Viandier, supra n. 123, nos. 1410–1569 with important decisions.

  197. M. Winner, ‘Acting in concert im österreichischen Übernahmerecht’, lecture, Hamburg, 20 May 2011.

  198. Hofstetter and Schilter-Heuberger, supra n. 143, Article 32 BEHG, marginal notes 33 et seq.; Schenker, supra n. 143, at p. 477 et seq. Also, R. Tschäni, ‘Die Gruppe im Übernahmerecht–“Are we really all one?”’, in R. Tschäni, ed., Mergers & Acquisitions VI (Zürich 2004) p. 179.

  199. R. Skog, lecture at the Conference on European Takeover Regulation, Oxford, 20 April 2012.

  200. UK Takeover Panel Practice Statement No. 26 of 9 September 2009 on Shareholder Activism.

  201. Ibid., under 1.6. On policy questions, see also Gower and Davies, supra n. 126, at pp. 28–44 and 1064 et seq.

  202. External Study, supra n. 4, at pp. 137 and 175.

  203. Von Bülow, supra n. 12, at p. 21.

  204. The latter is the case in Austria: Diregger, Kalss and Winner, supra n. 124, marginal notes 57 et seq. and 214; on acting in concert, see marginal notes 42 et seq.

  205. Notification law concerns prior transactions, takeover law concerns gaining control or changing control. For companies, the threat, in individual cases, of exceeding the notification threshold (such as the five per cent threshold) may be worse than the threat of a mandatory bid, which is relevant only in special controllable circumstances.

  206. Hofstetter and Schilter-Heuberger, supra n. 143, Article 32 BEHG, marginal note 39.

  207. On 6 February 2011, the FSA’s Guidance on concert party arrangements for the control of UK banks and other financial industry entities came into force. It is not clear how this Guidance relates to the treatment of acting in concert by the Takeover Panel; see H. Smith, ‘Financial Regulatory Developments’, 5 Law and Financial Markets Review (2011) p. 224, at pp. 241 et seq. and 242–243.

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  208. European Commission, Action Plan supra n. 5. See Wymeersch, supra n. 88, at p. 1582 et seq. The lack of a definition for acting in concert is mostly (48%) seen as a hindrance to cooperation between shareholders, External Study, supra n. 4, at p. 176; see also Report of the Reflection Group on the Future of EU Company Law, supra n. 86, at p. 46 et seq.: long-term ownership. Making reform proposals, but sceptical, see J. Winter, ‘Shareholder Engagement and Stewardship: The Realities and Illusions of Institutional Share Ownership’, available at: <http://ssrn.com/ abstract=1867564>.

  209. External Study, supra n. 4, at p. 135.

  210. For example, in France, Cour d’appel de Paris, 2 April 2008, Sacyr c. Eiffage, No 07/11675.

  211. External Study, supra n. 4, at p. 175 et seq., also Table at p. 177.

  212. Survey Report, supra n. 79, at p. 33; Expert Poll, supra n. 79, 1, at p. 9. On the difficult problems of evidence, using the ACS/Hochtief takeover as an example, see Seibt, supra n. 11, at p. 229.

  213. European Commission, Action Plan, supra n. 5, 3.4. In 2013, the Commission worked closely with the competent national authorities and ESMA to develop guidance in order to increase legal certainty regarding the relationship between investor cooperation on corporate governance issues and the rules on acting in concert. However, it aims to draw up a sort of white list for institutional investors in order to promote shareholder activism, instead of including legal definitions into the Transparency and Takeover Directives. See already the Application Report, supra n. 3, no. 16, and Feedback Statement, Summary of Responses to the Green Paper on the EU Corporate Governance Framework, 15 November 2011.

  214. Commission Communication, ‘Single Market Act’ (April 2011), COM(2011) 206 final; express reference is made to this Communication by the Commission in its Application Report, supra n. 3, 4, no. 23. This concern of the Commission can be found throughout the Action Plan, supra n. 5.

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  1. Max Planck Institute for Comparative and International Private Law, Hamburg, Germany

    Klaus J. Hopt (Professor (em.) and Director)

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This article goes back to the first Christian Wilde Memorial Lecture on European takeover law held by the author on 7 June 2012 at the Bucerius Law School in Hamburg. Later, the German version of this lecture was incorporated into a book on European takeover law: K.J. Hopt, Europäisches Übernahmerecht (Tübingen 2013). The English version is based on parts of this book and has been updated and changed for an international audience. The Application Report of the European Commission of 28 June 2012 and the External Study commissioned by the European Commission have been taken fully into account in the hope that this article will contribute to discussions raised by the Commission about the legal position and practice of takeover law in the European Union and Member States.

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Hopt, K.J. European Takeover Reform of 2012/2013 — Time to Re-examine the Mandatory Bid. Eur Bus Org Law Rev 15, 143–190 (2014). https://doi.org/10.1017/S1566752914001098

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