Germany wants the directive to rule that shareholders should be asked at shareholder assemblies to grant the board the right for a fixed period to act against a hostile bid without further consultation. Other member states are protected from hostile bids on their companies in other ways by their national laws. Berlin's reversal on the issue of shareholder consultation has taken people by surprise. When there is a bid for a company, there are investment decisions to be taken by shareholders. Investors in Europe would be no better off.
Managements can have very different interests from shareholders.
They said management would not have any defenses against hostile takeovers. Ever since the British telecommunications company Vodafone Group PLC made a successful hostile bid for Mannesmann AG there has been a question of which way Germany would move on allowing companies to protect themselves from predators, said Jacques Reding, a lawyer in Brussels. His firm represents Gucci NV, the Italian luxury goods company listed in Amsterdam that is embroiled in a legal dispute over its handling of a hostile takeover. Three months ago an Amsterdam court appointed three experts to advise it on the legality of the share issuance. If they conclude that the shares were issued to PPR simply as a poison pill to deter LVMH from a hostile takeover, then Gucci will have broken national law.