Brussels, 01/10/2002 (Agence Europe) - On Wednesday, the European Commission will examine the new Draft Directive on regulating take over bids and which will replace the paper thrown out in July 2001 by the European Parliament. On Monday, Commissioner Frits Bolkestein stated to the press that he hope that his paper would satisfy both the Council and the European Commission. Divergences still existed on Wednesday, however, within the College. German Commissioners, Günter Verheugen and Michaele Schreyer still believed on Monday that the proposals would not allow fair conditions for competition to be established between Member States. This was the main argument raised by German MEPs that led Parliament to reject the first proposal. The two Commissioners would have particularly liked to have seen the directive outlawing the use of multiple votes during a take-over. These multiple voting rights are used particularly by Scandinavian and French companies to block hostile take-overs. Parliament rapporteur, Klaus-Heiner Lehne said last week that the new draft was "unacceptable" given that it was not based on the "one share one vote" principle (see EUROPE 28 September p 8). Those close to Commissioner Bolkestein, nevertheless, regard the total block on "multiple voting rights" as risking being taken to court, accused of constituting an expropriation measure".
The new draft includes the clause obliging shareholders to give their consent before the Board of Directors on a company targeted by a hostile take-over can decide to take defensive measures known as "poison pills". This provision had raised much comment among the majority of MEPs. Commissioner Pascal Lamy suggested a compromise, which would consist of giving the general assembly of shareholders the chance to grant the Board of Directors the act of delegation, which could be renewed annually in order to take adequate measures during take-overs. This suggestion was supported by the two German Commissioners. Mr Lamy also wanted companies that launch take-overs to be obliged to outline their industrial, financial and social strategy and to consult the company committee in the firm targeted, as well as its own works committee. French Commissioner, Michel Barnier was, however, satisfied overall by workers consultation measures in the paper.
Spanish Commissioner, Loyola de Palacio insisted that the paper takes into account the new case law of the Court on golden shares, which allow a country to keep control of a privatised company whilst remaining a minority shareholder. In a decision made on 4 June, the Court ruled that golden shares could be maintained provided that they were clearly justified and not discriminatory. On this basis, the Court condemned France and Portugal for having kept golden shares in strategic companies but rejected the same charge against Belgium. The Court considered that the golden shares of the Belgian State in the Distrigaz company and SNTC were justified by the need to guarantee the availability of transport infrastructure for energy products and their stock, thus respecting the public service obligations. The new text outlines that the directive should not make exceptions to this approach.