CELEX: 51997PC0565
Language: en
Date: 1997-11-10
Title: Amended proposal for a thirteenth European Parliament and Council Directive on company law concerning takeover bids

C 378 / 10                                     Official Journal of the European Communities                  13 . 12 . 97
                                                                        II
                                                                (Preparatory Acts)
                                                          COMMISSION
                   Amended proposal for a 13th European Parliament and Council Directive on company law
                                                          concerning takeover bids (')
                                                                 (97/C 378 /09 )
                                                            (Text with EEA relevance)
                                                       COM(97) 565 final — 95/0341(COD)
                   (Submitted by the Commission pursuant to Article 189a (2) of the EC Treaty on 11 November
                                                                      1997 )
                   O OJ C 162 , 6 . 6 . 1996 , p . 5 .
                             INITIAL PROPOSAL                                           AMENDED PROPOSAL
THE EUROPEAN PARLIAMENT AND THE COUNCIL                                      Unchanged
OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European
Community, and in particular Article 54 thereof,
Having regard to the proposal from the Commission ,
Having regard to the opinion of the Economic and
Social Committee ('),
Acting in accordance with the procedure referred to in
Article 189b of the Treaty (2 ),
Whereas it is necessary to coordinate certain safeguards
which Member States require of companies and firms
within the meaning of the second paragraph of Article 58
of the EC Treaty for the protection of members and
others, in order to make such safeguards equivalent
throughout the Community ;
Whereas it is necessary to protect the interests of share­
holders of companies governed by the laws of a Member
State when these companies are subject to a takeover bid
or to a change of control and their securities are
admitted to trading on a regulated market within the
scope of this Directive ;
O OJ C 295 , 7. 10 . 1996 , p. 1 .
(2) European Parliament opinion of 26 June 1997 (OJ C 222 ,
    21 . 7 . 1997 , p. 20 ).
 ---pagebreak--- 13 . 12 . 97        EN                Official Journal of the European Communities                               C 378 / 11
                     INITIAL PROPOSAL                                             AMENDED PROPOSAL
Whereas only action at Community level can ensure an
adequate level of protection for shareholders throughout
the Union and provide for minimum guidelines for the
conduct of takeover bids ; whereas Member States acting
independently are not able to establish the same level of
protection especially in the case of cross-border
takeovers or purchases of control ;
Whereas the adoption of a directive is the appropriate
procedure for laying down a framework consisting of
certain common principles and a limited number of
general requirements which Member States will be
required to implement through more detailed rules
according to their national systems and their cultural
contexts ;
Whereas Member States should take the necessary steps
in order to protect shareholders having minority holdings
after the purchase of the control of their company ;
whereas such a protection can be ensured either by
obliging the person who acquired the control of a
company to make a bid to all shareholders for all or for
a substantial part of their holdings or by providing for
other means which attain the objective of at least an
equivalent level of protection of minority shareholders ;
Whereas each Member State should designate an                   Whereas each Member State should designate an
authority or authorities to supervise all aspects of the bid    authority or authorities to supervise the entire course of
and to ensure that parties to takeover bids comply with         the bid and to ensure that parties to takeover bids
the rules made pursuant to this Directive ; whereas the         comply with the rules made pursuant to this Directive ;
different authorities must cooperate with one another ;         whereas the different authorities must cooperate with
                                                                one another ;
Whereas it is desirable to encourage the voluntary              Unchanged
control exercised by self-regulatory bodies in order to
avoid recourse to administrative or judicial action ;
Whereas to reduce the scope for insider dealing offerers
should be required to announce their intention of
launching a bid as soon as possible and to inform the
supervisory authority and the offeree company's board
of the bid before they are made public ;
 ---pagebreak---  C 378 / 12          EN                 Official Journal of the European Communities                                 13 . 12 . 97
                      INITIAL PROPOSAL                                                AMENDED PROPOSAL
Whereas the addressees of a takeover bid should be                Whereas the adressees of a takeover bid should be
 properly informed of the terms of the bid by means of an         properly informed of the terms of the bid by means of an
 offer document :                                                 offer document ; whereas appropriate information should
                                                                  also be given to the representatives of the company's
                                                                  employees or, failing that, to the employees directly;
Whereas it is necessary to set a time limit for takeover          Unchanged
bids ;
Whereas to be able to perform their functions satisfac­
torily, supervisory authorities must at all times be able to
require the parties to the bid to provide information on
it ;
Whereas to avoid operations which frustrate the bid it is
necessary to limit the powers of the board of directors of
the offeree company to engage in operations of an
exceptional nature ;
Whereas the board of the offeree company should be
required to make public a document setting out its
opinion on the bid and the reasons on which it is based ;
Whereas it is necessary that Member States provide for
rules covering the cases when the bid may be withdrawn
or declared void once the offer document has been made
public, the right of the offerer to revise its bid , the possi­
bility of competing bids for the securities of a company
which are necessarily to the advantage of its shareholders
and the disclosure of the result of the bid,
HAVE ADOPTED THIS DIRECTIVE :                                     HAVE ADOPTED THIS DIRECTIVE :
                           Article 1                                                        Article 1
                            Scope                                                             Scope
The coordination measures prescribed by this Directive            The coordination measures prescribed by this Directive
shall apply to the laws, regulations and administrative           shall apply to the laws, regulations and administrative
provisions or other mechanisms or arrangements of the             provisions of the Member States, including mechanisms
Member States relating to takeover bids for the securities        or arrangements established by organizations officially
of a company governed by the law of a Member State,               authorized to regulate the markets , relating to takeover
where such securities are admitted, wholly or partially,          bids for the securities of a company governed by the law
to trading on a market in one or more Member States               of a Member State , where such securities are admitted ,
which is regulated and supervised by authorities                  wholly or partially, to trading on a market in one or
recognized by public bodies, operates regularly and is            more Member States which is regulated and supervised
accessible, directly or indirectly, to the public.                by authorities recognized by public bodies , operates
                                                                  regularly and is accessible , directly or indirectly, to the
                                                                  public .
 ---pagebreak---  13 . 12 . 97          lEN I                Official Journal of the European Communities                                 C 378 / 13
                         INITIAL PROPOSAL                                                  AMENDED PROPOSAL
                              Article 2                                                          Article 2
                             Definitions                                                        Definitions
For the purpose of this Directive :
— 'takeover bid' ('bid') shall mean an offer made to the              Unchanged
      holders of the securities of a company to acquire all
      or part of such securities by payment in cash and /or
      in exchange for other securities . A bid may be either
      mandatory, if so provided by Member States as a
      means to protect minority shareholders , or voluntary,
— 'offeree company' shall mean a company whose
      securities are the subject of a bid ,
      'offerer' shall mean any natural person or legal entity             'offerer' shall mean any natural person or legal entity
      in public or private law making a bid ,                             in public or private law making a bid in accordance
                                                                          with the legislation of the Member State determined
                                                                          as provided for in Article 4 (2 ),
      'securities' shall mean transferable securities carrying            'securities' shall mean transferable securities carrying
      voting rights in a company or conferring entitlement                voting rights in a company,
      to obtain transferable securities carrying such rights,
      'parties to the bid' shall mean the offerer, the                Unchanged
      members       of    the    offerer's   administrative   or
      management board, if the offerer is a company, the
      addressees of the bid and the members of the admin­
      istrative or management board             of the offeree
      company.
                              Article 3                                                          Article 3
               Protection of minority shareholders                                 Protection of minority shareholders
1 . Where a natural person or legal entity who, as a                  1 . Where a natural person or legal entity who as a
result of acquisition, holds securities which added to any            result of immediate or future acquisition , holds securities
existing holdings give him a specified percentage of                  which added to any existing holdings directly give him a
voting rights in a company referred to in Article 1 ,                 specified percentage of voting rights in a company
conferring on him the control of that company, Member                 referred to in Article 1 , conferring on him the control of
States should ensure that rules or other mechanisms or                that company, Member States should ensure that rules or
arrangements are in force which either oblige this person             other mechanisms or arrangements are in force which
to make a bid in accordance with Article 10 or offer                  either oblige this person to make a bid in accordance
other appropriate and at least equivalent means in order              with Article 10 or offer other appropriate and at least
to protect the minority shareholders of that company.                 equivalent means in order to protect the minority share­
                                                                      holders of that company.
 ---pagebreak---  C 378 / 14        I EN               Official Journal of the European Communities                                13 . 12 . 97
                      INITIAL PROPOSAL                                                AMENDED PROPOSAL
 2 . The percentage of voting rights which confers                2 . The percentage of voting rights which confers
 control for the purposes of paragraph 1 and the way of          control for the purposes of paragraph 1 and the way of
 its calculation shall be determined by the law of the           its calculation shall be determined by the Member State
 Member State where the supervisory authority is located .       where the supervisory authority is located in accordance
                                                                 with Article 4 (2 ). That authority shall also be
                                                                 responsible for determining whether and to what extent
                                                                 the provisions of paragraph 1 apply to the temporary
                                                                 holding of securities or to the acquisition of a majority
                                                               ' holding without there being any intention to exercise
                                                                 control over the company.
                           Article 4                                                       Article 4
                    Supervisory authority                                            Supervisory authority
 1.   Member States shall designate the authority or             1.    Member States shall designate the authority or
 authorities, which will supervise all aspects of the bid .      authorities, which will supervise the entire course of the
The authorities thus designated may include associations         bid . The authorities thus designated may include
or private bodies. Member States shall inform the                associations or private bodies. Member States shall
 Commission of the designations and shall specify all            inform the Commission of these designations and shall
divisions of functions that may be made .                        specify all divisions of functions that may be made .
2.    The authority competent for supervising the bid            2.    The authority competent for supervising the bid
shall be that of the Member State in which the offeree          shall be that of the Member State in which the offeree
company has its registered office if the securities of the      company has its registered office if the securities of the
company are admitted to trading on a regulated market           company are admitted to trading on a regulated market
in that Member State . Otherwise, the competent                 in that Member State. Otherwise , the competent
authority shall be that of the Member State on whose            authority shall be that of the Member State on whose
regulated market the securities of the company were first       regulated market the securities of the company were first
admitted to trading and are still traded .                      admitted to trading and are still traded and the law
                                                                applicable shall be that of that Member State. If that
                                                                condition is not met either, the competent authority shall
                                                                be that of the Member State on whose regulated market
                                                                the company's securities are principally traded during the
                                                                period of acquisition of the securities conferring control
                                                                of the company and the law applicable shall be that of
                                                                that Member State .
3. Without prejudice to their duty of professional              3 . Each Member State shall require any individuals
secrecy, the competent authorities of the Member States        who are or have been employed by the supervisory auth­
shall cooperate, in so far as is necessary for the              orities to be bound by professional secrecy. Without
performance of their duties and for this purpose shall          prejudice to their obligation not to divulge information
supply each other with any information that may be              covered by professional secrecy, the supervisory auth­
necessary .                                                     orities of the Member States shall cooperate , in so far as
                                                                is necessary for the performance of their duties and for
                                                                this purpose shall supply each other with any information
                                                                that may be necessary.
 ---pagebreak--- 13 . 12 . 97        Γ ΕΝ               Official Journal of the European Communities                                 C 378 / 15
                      INITIAL PROPOSAL                                                AMENDED PROPOSAL
4 . The supervisory authorities shall have all the               4 . The supervisory authorities shall have all the
powers necessary for the exercise of their functions,            powers necessary for the exercise of their functions,
which shall include responsibility for ensuring that the         which shall include responsibility for ensuring that the
parties to a bid comply with the rules made pursuant to          parties to a bid comply with the rules made pursuant to
this Directive. In addition Member States can provide            this Directive .
that their supervisory authorities may, on the basis of a
reasoned decison , grant derogations from the rules
drawn up in accordance with this Directive provided that
in granting such derogations the supervisory authorities
shall respect the principles mentioned in Article 5 .
5 . This Directive does not affect the power which               5.     This Directive does not affect the power of
courts may have in a Member State to decline to hear             Member States to designate the judical or other auth­
legal proceedings and to decide whether or not such              orities responsible for dealing with disputes and for
proceedings affect the outcome of the bid provided that          deciding on irregularities committed during the bid
an injured party enjoys adequate remedies, whether               procedure, provided that an injured party enjoys appro­
through an appeals procedure operated by the super­              priate and adequate remedies to defend its interests and ,
visory authority or through the right to take proceedings        where appropriate, obtain compensation for any loss
before the courts to claim compensation .                        suffered .
                           Article 5                                                       Article 5
                      General principles                                               General principles
1.     For the purposes of the implementation of this            Unchanged
Directive, Member States shall ensure that the rules or
other arrangements made pursuant to this Directive
respect the following principles :
(a ) all holders of securities of an offeree company who         (a) all holders of securities of an offeree company who
     are in the same position are to be treated equally ;             are in the same position are to be given equivalent
                                                                      treatment ;
(b ) the addressees of a .bid are to have sufficient time        Unchanged
     and information to enable them to reach a properly
     informed decision on the bid ;
(c ) the board of an offeree company is to act in the            (c) the board of an offeree company is to act in all the
     interests of the company as a whole ;                            interests of the company, including employment ;
(d ) false markets must not be created in the securities of      (d ) false markets must not be created in the securities of
     the offeree company, of the offerer company, or of               the offeree company, of the offerer company, or of
     any other company concerned by the bid ;                         any other company concerned by the bid in such a
                                                                      way that the rise or fall in the prices of the securities
                                                                      becomes artificial and the normal functioning of the
                                                                      markets is disrupted :
(e ) offeree companies must not be hindered in the               Unchanged
     conduct of their affairs for longer than is reasonable
     by a bid for their securities .
2.     In order to attain the objective set out in para­
graph 1 , Member States shall ensure that rules are in
force which satisfy the minimum requirements set out in
the following Articles .
 ---pagebreak--- C 378 / 16         lEN                 Official Journal of the European Communities                                13 . 12 . 97
                     INITIAL PROPOSAL                                                AMENDED PROPOSAL
                          Article 6                                                        Article 6
                        Information                                                      Information
1.    Member States shall ensure that rules are in force         1.    Member States shall ensure that rules are in force
requiring that the decision to make a bid is made public         requiring that the decision to make a bid is made public
and that the supervisory authority and the board of the          and that the supervisory authority and the board of the
offeree company are informed of the bid before this              offeree company are informed of the bid before this
decision is made public .                                        decision is made public. As soon as the bid has been
                                                                 made public, the board of the offeree company shall
                                                                 inform the representatives of its employees or, where
                                                                 there are no such representatives, the employees them­
                                                                 selves .
2.    Member States shall ensure that rules are in force         2.    Member States shall ensure that rules are in force
requiring the offerer to draw up and make public in              requiring the offerer to draw up and make public in
good time an offer document containing the information           good time an offer document containing the information
necessary to enable the addressees of the bid to reach a         necessary to enable the addressees of the bid to reach a
properly informed decision on the bid . Before the offer         properly informed decision on the bid . Before the offer
document is made public, the offerer shall communicate           document is made public, the offerer shall communicate
it to the supervisory authority.                                 it to the supervisory authority. When it is made public,
                                                                 the board of the offeree company shall communicate it
                                                                 to the representatives of its employees or, where there
                                                                 are no such representatives , to the employees themselves.
3.    Those rules shall require that the document states         Unchanged
at least :
— the terms of the bid ,
— the identity of the offerer or, where the offerer is a
    company , the type, name and registered office of that
    company ,
— the securities or class , or classes of securities for
    which the bid is made ,
— the consideration offered for each security or class of        — the consideration offered for each security or class of
    securities and the basis of the valuation used in deter­         securities and the basis of the valuation used in deter­
     mining it with particulars of the way in which that             mining it with particulars of the way in which that
    consideration is to be given ,                                   consideration is to be given , and in particular the
                                                                     methods and terms of payment to shareholders
                                                                     resident in a Member State other than that of the
                                                                     offeree company's registered office or than that in
                                                                     which the securities are listed .
— the maximum and minimum percentages or quantities              Unchanged
    of securities which the offerer undertakes to acquire,
— details of any existing holdings of the offerer in the
    offeree company,
— all conditions to which the offers is subject,
 ---pagebreak---  3 . 12 . 97                           Official Journal of the European Communities                                C 378 / 17
                       INITIAL PROPOSAL                                              AMENDED PROPOSAL
     the offerer's intentions with regard to the future               the offerer's intentions with regard to the future
     business and undertakings of the offeree company, its            business and undertakings of the offeree company, its
     employees and its management,                                    employees and its management, including any change
                                                                      in the conditions of employment,
— the period for acceptance of the bid , which may not           — the period for acceptance of the bid, which may not
     be less than four weeks or more than 10 weeks from               be less than four weeks or more than 10 weeks from
     the date on which the document is made public,                   the date on which the document is made public,
                                                                      except where duly justified authorization has been
                                                                      given by the supervisory authority,
— where the consideration offered by the offerer                 Unchanged
     includes securities, information about those securities .
                                                                 — the conditions under which the offerer is to finance
                                                                      its bid .
4.     Member States shall ensure that rules are in force        4.      Member States shall ensure that rules are in force
requiring that the parties to a bid provide the supervisory      requiring that the parties to a bid provide the supervisory
authority at any time on request with all information in         authority at any time on request with all information in
their possession concerning the bid which the supervisory        their possession concerning the bid which is necessary
authority considers necessary for the discharge of its           for the supervisory authority to discharge its functions.
functions .
                            Article 7                                                      Article 7
                           Disclosure                                                     Disclosure
1.     Member States shall ensure that rules are in force        1.      Member States shall ensure that rules are in force
which require a bid to be made public in such a way as           which require a bid to be made public in such a way as
to avoid the creation of false markets in the securities of      to avoid the creation of false markets in the securities of
the offeree company or of the offerer.                           the offeree company, of the offerer or of any other
                                                                 company affected by the bid, particularly through the
                                                                 publication or dissemination of false , exaggerated , or
                                                                 tendentious information .
2.     Member States shall ensure that rules are in force        2.      Member States shall ensure that rules are in force
which provide for the disclosure of all information or           which provide for the disclosure of all information or
documents required in such a manner as to ensure that            documents required in such a manner as to ensure that
they are both readily and promptly available to the              they are both readily and promptly available to the
addressees of the bid .                                          addressees of the bid, including those resident in a
                                                                 Member State other than that of the offeree company's
                                                                 registered office or than that in which the securities are
                                                                 listed and to the representatives of the employees of the
                                                                 offeree company or, where there are no such represen­
                                                                 tatives , to the employees themselves .
                            Article 8                                                      Article 8
     Obligations of the board of the offeree company                  Obligations of the board of the offeree company
Member States shall ensure that rules are in force               Member States shall ensure that rules are in force
requiring that :                                                 requiring that :
 ---pagebreak--- C 378 / 18         fENl                 Official Journal of the European Communities                                13 . 12 . 97
                      INITIAL PROPOSAL                                               AMENDED PROPOSAL
(a) after receiving the information concerning the bid            (a) after receiving the information concerning the bid
     and until the result of the bid is made public, the              and until the result of the bid is made public, the
     board of the offeree company should abstain from                 board of the offeree company should abstain from
     any action which may result in the frustration of the            any action which may result in the frustration of the
     offer, and notably from the issuing of shares which              offer, and notably from the issuing of shares which
     may result in a lasting impediment to the offerer to             may result in a lasting impediment to the offerer to
     obtain control over the offeree company, unless it               obtain control over the offeree company, unless it
     has the prior authorization of the general meeting of            has the prior authorization of the general meeting of
     the shareholders given for this purpose,                         the shareholders given for this purpose, during the
                                                                      period of acceptance of the bid ;
(b ) the board of the offeree company shall draw up and           Unchanged
     make public a document setting out its opinion on
     the bid together with the reasons on which it is
     based .
                           Article 9                                                        Article 9
           Rules applicable to the conduct of bids                         Rules applicable to the conduct of bids
In addition Member States shall ensure that rules are in          Unchanged
force which govern the conduct of bids at least for the
following matters :
(a) withdrawal or nullity of the bid,
(b ) revision of bids,
(c) competing bids,
(d ) disclosure of the result of bids .
                           Article 10                                                       Article 10
                        Mandatory bid                                                    Mandatory bid
1 . Where a Member State provides for a mandatory                 1 . Where a Member State provides for a mandatory
bid as a means to protect the minority shareholders, this         bid as a means to protect the minority shareholders, this
bid shall be launched to all shareholders for all or for a        bid shall be launched to all shareholders for all or for a
substantial part of their holdings at a price which meets         substantial part of their holdings at a price which ensures
the objective of protecting their interests .                     equal treatment for shareholders. The term 'substantial
                                                                  part' should not be interpreted as meaning less than
                                                                  70 % of the securities, except where duly justified auth­
                                                                  orization has been given by the supervisory authority.
2 . If the mandatory bid comprises .only a part of the            Unchanged
securities of the offeree company and the shareholders
offer to sell to the offerer more shares than the partial
offer covers, shareholders should be treated equally by
means of a pro rata treatment of their shareholdings .
 ---pagebreak--- 13 . 12 . 97                           Official Journal of the European Communities                              C 378 / 19
                     INITIAL PROPOSAL                                               AMENDED PROPOSAL
                          Article 11                                                     Article 11
              Transposition of the Directive                                  Transposition of the Directive
1 . Member States shall ensure that the laws, regu­              1 . Member States shall ensure that       the laws, regu­
lations and administrative provisions or other mech­             lations and administrative provisions   or other mech­
anisms or arrangements necessary for them to comply              anisms or arrangements necessary for     them to comply
with this Directive are in force before 1 April 1998 .           with this Directive are in force before   1 January 1999 .
2.     Member     States   shall    communicate     to   the     Unchanged
Commission the provisions or other arrangements
referred to in paragraph 1 , making express reference to
this Directive .
                          Article 12                                                     Article 12
                 Addressees of the Directive                                    Addressess of the Directive
This Directive is addressed to the Member States .               Unchanged