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Takeover Defenses in Europe

Author	: Klaus J. Hopt
Publisher	:
Total Pages	: 40
Release	: 2015
Genre	:
ISBN	:

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The European Directive on Takeover Bids of 2004 must be revised on the basis of experience gained in the five years of its application. On the basis of a legal and economic examination carried out by Marccus Partners and the Centre for European Policy Studies, the European Commission published an Application Report on 26 June 2012 on which the European Parliament in its Resolution of 21 May 2013 responded favorably. This has provoked very controversial economic and policy 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 path dependent commonalities and differences between takeover law in the Member States as regards the European market for corporate control. The main point of dispute is the prohibition of frustrating action. The idea that the Board only takes account of the interests of the shareholders as regards defensive measures or an improved price (this with reference to the USA) is countered by the fear that the Board will have a serious self-interest in retaining their jobs and that this could affect their decisions and lead to their entrenchment (the position of the United Kingdom takeover regulation). It is argued that for path dependent reasons in Europe the market for corporate control has a role as a factor of external corporate governance. Takeovers do not only play a role in the allocation of resources with the consequence that capital is directed towards the place where it can be used most efficiently, but may also motivate Board members to perform better on behalf of shareholders (disciplinary mechanism). Even though there have been the improvements in (internal) corporate governance in recent decades, through the slowly growing role of institutional investors in the markets and in general meetings of shareholders, the progress has been rather limited. A functioning takeover market may still remain the most effective control mechanism.

Defense Strategies Against Hostile Takeovers

Author	: Jan Steinbächer
Publisher	: GRIN Verlag
Total Pages	: 93
Release	: 2007-09
Genre	: Business & Economics
ISBN	: 3638803597

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Bachelor Thesis from the year 2007 in the subject Business economics - Miscellaneous, grade: 94,0 %, International University of Monaco, 65 entries in the bibliography, language: English, abstract: Objective of this thesis was to identify the trends and developments of country-specific defense strategies against hostile takeovers and their determinants. Thus, it was necessary to analyze which possibilities of corporate defense would actually be feasible in certain countries. Defense strategies were subdivided into preventive and ad-hoc strategies. National characteristics and differentiators were shown and analyzed regarding their suitability as a defense measure. Especially in France and Germany the big influential players have been in a process of change: banks and governments are pursuing different investment strategies and companies loose their "systematic protection". The example of Germany illustrates that companies are looking for protective alternatives as old structures like the Rhenish capitalism are breaking up. The growth of M&A activities, especially of hostile takeovers, has affected national legislation to tighten their regulations; France has lifted barriers regarding takeovers (both friendly and hostile) regarding 11 specific industries at the time being. This example illustrates the increasingly protectionist behavior in Europe on a governmental level. Corporate Governance generally takes shareholders more and more into consideration regarding the vote on the adoption of defense measures and golden parachutes. In the US, companies started to diminish golden parachutes as a result of the proposal of activist shareholders. In many European countries, however, there are still enough loopholes to avoid foregone shareholder voting. A contrary trend is to be seen in the US, where poison pills are diminished on a fast pace. In addition, shareholders vote increasingly in favor of declassified boards. Golden parachutes are still prevalent, but not

Optionality Arrangements and Reciprocity in the European Takeover Directive

Author	: Matteo Gatti
Publisher	:
Total Pages	: 27
Release	: 2015
Genre	:
ISBN	:

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Because of the failure of harmonizing the regime of takeover defenses, the European Directive on Takeover Bids (DTB) has created broad dissatisfaction. In fact, two key features of the DTB, the board neutrality rule and the break-through rule (BTR), are not mandatory, but can be opted out by Member States. Since both rules were considered chief devices for increasing takeover activity, as they aim to neutralize the most significant anti-takeover defenses, the fact that their adoption will rely upon local choices by national legislators puts into serious question whether the ultimate outcome of the DTB will be that of promoting a vibrant and efficient pan-European market for corporate control. Optionality is not alone in thwarting harmonization in the field of takeover defenses, as the European legislator has also introduced a reciprocity feature, according to which Member States can decide whether to relax the prohibitions and restrictions arising out of the board neutrality rule and/or the BTR in the event a bid is made by a company which is not subject to the same prohibitions and restrictions.Although the DTB failed the goal of promoting a strong takeover market by limiting the availability of defensive tactics, both the optionality and the reciprocity features will represent an intriguing test of how Member States will address the underlying policy choices and, where they chose to opt out of the board neutrality rule and/or the BTR, of how companies will react to the possibility of deciding to opt into the pro-takeover EU default regime. The paper argues that optionality: (i) may very well be a sound approach with regards to the BTR, as its beneficial impact is still highly debated, and (ii) represents an acceptable compromise for the gradual implementation of the board neutrality rule. Quite plausibly, at this stage, an abrupt introduction of a mandatory board neutrality rule would have generated, at least in some Member States, a backlash in both national politics and corporate practice. The paper also stresses that reciprocity does not represent a sound policy to govern the regime of takeover defenses.

Emerging trends and developments of country-specific defense strategies against hostile takeovers

Author	: Jan Steinbächer
Publisher	: GRIN Verlag
Total Pages	: 89
Release	: 2007-08-11
Genre	: Business & Economics
ISBN	: 3638800598

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Bachelor Thesis from the year 2007 in the subject Business economics - Miscellaneous, grade: 94,0 %, International University of Monaco, language: English, abstract: Objective of this thesis was to identify the trends and developments of country-specific defense strategies against hostile takeovers and their determinants. Thus, it was necessary to analyze which possibilities of corporate defense would actually be feasible in certain countries. Defense strategies were subdivided into preventive and ad-hoc strategies. National characteristics and differentiators were shown and analyzed regarding their suitability as a defense measure. Especially in France and Germany the big influential players have been in a process of change: banks and governments are pursuing different investment strategies and companies loose their “systematic protection”. The example of Germany illustrates that companies are looking for protective alternatives as old structures like the Rhenish capitalism are breaking up. The growth of M&A activities, especially of hostile takeovers, has affected national legislation to tighten their regulations; France has lifted barriers regarding takeovers (both friendly and hostile) regarding 11 specific industries at the time being. This example illustrates the increasingly protectionist behavior in Europe on a governmental level. Corporate Governance generally takes shareholders more and more into consideration regarding the vote on the adoption of defense measures and golden parachutes. In the US, companies started to diminish golden parachutes as a result of the proposal of activist shareholders. In many European countries, however, there are still enough loopholes to avoid foregone shareholder voting. A contrary trend is to be seen in the US, where poison pills are diminished on a fast pace. In addition, shareholders vote increasingly in favor of declassified boards. Golden parachutes are still prevalent, but not for defense reasons. It was found that their effect is hardly predictable. Shareholders sharply criticize their adoption and increasingly vote against them. A change in Japan’s legislation allows hostile takeovers since May 2007. Consequently, Japanese companies are about to set up poison pills to protect themselves.

Adopted EU Directive on Takeover Bids - The Target Company Management's Position, Defensive Measures and Insider Dealing

Author	: Ljiljana Maurović
Publisher	:
Total Pages	: 13
Release	: 2013
Genre	:
ISBN	:

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The defense industry is unlike other industries due to the nature of its products and given the significance of the defense industry for national security. Since the end of the Cold War, the European defense industry has undergone a huge transformation. Decline in demand for military equipment and growing research and development costs for major weapons systems have strengthened economic pressure to concentrate arms-production activities in Europe. Co-operation in the European defense industry sector has taken different forms, shapes and magnitudes. Reconstruction of the European defense industry through mergers, acquisitions and joint-ventures is being shaped by strong market. There is a growing tendency towards greater co-operation and collaboration at the European level (regionalization) in order to create a competitive European defense industry, capable to compete, cooperate and integrate on equal terms with stronger and more productive American arms-producing companies. A combination of liberalism and mercantilism focuses on competition and the need to maintain considerable European capacity and autonomy in the field of armaments production. Such a balance would not only encourage a greater degree of transatlantic competition but also transatlantic co-operation.

Takeover Defense Mechanisms

Author	: Elena Sabinina
Publisher	:
Total Pages	: 152
Release	: 2004
Genre	: Antitakeover strategies
ISBN	:

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Common Legal Framework for Takeover Bids in Europe: Volume 2

Author	: Dirk Van Gerven
Publisher	: Cambridge University Press
Total Pages	: 333
Release	: 2010-01-28
Genre	: Law
ISBN	: 1139484753

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The Council Directive of 21 April 2004 on takeover bids sets forth the general principles applicable to takeover bids and clarifies certain minimum rules with respect to the procedure for a takeover bid, the obligation to make a mandatory bid in the event a minimum threshold is crossed and the majority shareholder's squeeze-out right as well as the minority shareholders' sell-out right. Furthermore, the Directive defines the authority which is competent to approve offer documents and supervise takeover bids, and provides for optional restrictions on the actions of the target company's management and on defence mechanisms. This book discusses the Takeover Directive and its implementing rules in each Member State of the European Union and the European Economic Area, providing companies and their advisors with useful insight into the legal framework and principles applicable to takeover bids in the region.

A Legal and Economic Assessment of European Takeover Regulation

Author	: Christophe Clerc
Publisher	:
Total Pages	: 0
Release	: 2012
Genre	: Business & Economics
ISBN	: 9789461382344

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Takeovers are an exceptional event in the life of a corporation, fundamentally altering both control and strategy. But the prospect of becoming the target of a bid, even when remote, influences daily corporate decision-making. Takeover rules are therefore central to company law and the balance of power among managers, shareholders and stakeholders alike. To what extent is it possible to balance an active market for corporate control with long-term, firm-specific investments? This book is an abridged version of a comprehensive study carried out by the law firm Marccus Partners and the Centre for European Policy Studies for the European Commission and supplemented by additional policy recommendations. The study analyses the corporate governance considerations driving takeover regulation. It also assesses the implementation of the EU Directive on takeover bids and compares it with the legal framework of nine other major jurisdictions, including the United States. The authors find that similar rules have different effects, depending on company-level and country-level characteristics, and examine the use of modular legislation and optional provisions to cater for these differences. Offering the reader a unique and thorough legal review, this book draws on the work of a global network of law firms and an in-depth economic study, including a survey of the relevant academic literature and an empirical analysis based on a comprehensive dataset on takeovers in Europe dating back to the early 2000s. An analysis of the impact of takeover rules on competitiveness and employment is also provided. Book jacket.

Common Legal Framework for Takeover Bids in Europe

Author	: Dirk van Gerven
Publisher	: Cambridge University Press
Total Pages	: 333
Release	: 2008
Genre	: Law
ISBN	: 0521516706

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An examination of the general principles applicable to takeover bids in the European Union and the European Economic Area.

Hostile Takeovers and Defensive Mechanisms in the United Kingdom and the United States

Author	: Alexandros L. Seretakis
Publisher	:
Total Pages	: 35
Release	: 2013
Genre	:
ISBN	:

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The United States and the United Kingdom are two countries sharing the same belief in the free market economy. Both countries are characterized by the separation of ownership and control and hostile takeovers are an important mechanism for constraining managerial excesses. However, the regulation of takeovers and defensive mechanisms is strikingly different. While Delaware jurisprudence has entrusted the board with the power to block hostile bids subject to an enhanced judicial standard, the United Kingdom has been a pioneer in adopting and promoting across Europe an absolute ban on takeover defenses. The public outrage provoked by the recent Kraft-Cadbury debacle has increased calls for stricter regulation of hostile takeovers. In light of the growing skepticism against the City Code's lenient approach to hostile takeovers, a question naturally arises. Should the United Kingdom abandon its restrictive approach towards takeover defenses and adopt the laxer and more lenient U.S. model? The answer should be negative, as the implementation of a U.S.-style regime, under which directors' defensive actions are scrutinized by the courts, would result in the U.K. market losing its major advantages. The speed, flexibility and certainty offered by the current regime would dissipate, should the authority in regulating defensive tactics be given to the courts. The genius of the U.K. regime lies in its ability to achieve the best results at a minimum cost. It manages to promote certainty, a vibrant takeover market and the accountability of directors, while eliminating the costs generated by litigation. In addition, the costs imposed by Rule 21 of the Takeover Code are either insignificant or associated with a wider debate outside the takeover field.

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Takeover Defenses In Europe