CMS Guide to Mandatory Offers and Squeeze-outs
This Guide provides an overview of the current legal framework and practice governing public takeovers and squeeze-outs in a total of 26 jurisdictions (18 EU Member States, Albania, Bosnia-Herzegovina, Russia, Serbia, Switzerland, Turkey and Ukraine as well as China) and provides contact details of experienced legal advisors active in this ﬁeld. The number of jurisdiction covered demonstrates the growing geographic footprint of CMS across Europe and beyond as well as our capability to provide a seamless cross-border service.
At European level, the Takeover Directive (2004/25/EC) has created a framework setting certain minimum standards for public takeover bids in the EU. The Takeover Directive has required EU Member States to create national legal frameworks based inter alia on the over-arching principles of equal treatment of the target company’s shareholders, protection of minority shareholders, ensuring an informed decision by target company shareholders on the merits of a particular takeover bid, and an obligation of the board(s) of the target company to act in the interest of the company. Implementing these principles, the Takeover Bids Directive prescribes minimum standards in relation to trigger events for mandatory offers, the offer price, acceptance periods and the level of disclosure to be provided in context of public takeover bids, as well as the pricing and other terms of squeeze-outs.
At the same time, a number of very important aspects of takeover law such as the rules on board neutrality and break-through have remained optional, and a number of important determinations such as the deﬁnition of “control”, including the general control threshold itself and the scope of exemptions from the offer requirement, have largely been left to the Member States.
While the Report from the EU Commission on the Application of the Takeover Directive (COM (2012) 347) which has been published in June 2012 has not led to any material amendments to the Directive, the takeover laws and in their application in many of the EU Member States and other jurisdictions covered in this Guide have clearly evolved since the previous edition of this Guide was published in 2011, an evolution which has effectively lessened the uniformity introduced by the Takeover Directive. Apart from increasingly complex deal structures and the rising importance of activist shareholders in the takeover context, national legislators and regulators were faced with a wave of delistings and the issue whether a delisting should trigger a mandatory offer even in the absence of a change of control. This is clearly an area where new national legislation, following the German example, or even European regulation is to be expected.
The scope and relevance of takeover law is not limited to classic tender offer scenarios, of course: in numerous instances, such as restructurings of shareholder groups, acquisitions of troubled target companies or approaches by activist shareholders, legal ways and means of avoiding triggering a mandatory offer are being explored. The Commission Report referred to above has highlighted that there are national exemptions from the offer obligation which in some cases are quite openly geared towards protecting national interests. It remains to be seen whether a higher degree of uniformity in this area will find sufficient support at the European level.