Brussels, 14/01/2003 (Agence Europe) - Two stages will still have to take place before the presentation of the Klaus-Heiner Lehne (CDU) report on the draft directive on take-over bids. Next week on 22 January, the legal and internal market committee will examine the re-drafted report as requested by the academics, Barbara Dauner Lieb from the University of Cologne and Marco Lamandini Reinier from the University of Bologna. This meeting will be followed on 28 January by a public hearing that will enable MEPs to get an idea about the different opinions of the parties involved.
The report will be released to the public new Wednesday and will provide a detailed analysis of the different components in the new European Commission proposal, "the text is certainly to be welcomed" even if it formulates recommendations for improving the content. According to Ms Dauner and Mr Lamandini, who have highlighted the major disparities between the national legislation, the proposal does not go far enough to harmonise the provisions on take-overs and does not therefore fully fulfil the objective of simplifying trans-border acquisitions within the single market. The report deals with the measures that exist in the particularly varied proportions of the different Member States: participation without the right to vote, specific agreements on voting rights, limitations of voting rights to a certain percentage even when shareholders have a higher stake in a company, shares that give multiple voting rights, specific action ("golden share") or specific rights allocated to shareholders in the appointment of the Board of Directors. In the context of shares that give multiple voting rights, the report stresses that this exists in France and Sweden, as well as in other Scandinavian countries but have been abolished in Italy, Austria, Spain and Germany. The Commission foresees, however, that derogations will be allowed to the overall ban of defensive mechanisms used by companies that are faced by take-over bids.
The Commission justifies this derogation by the fact that by getting rid of this kind of action would have certain effects on ownership and would need constitutional amendments in some countries. The two experts believe that the overall obstacles to take-over bids ought to be treated in the same way and that there is no justification for introducing different treatment of multiple voting rights shares and restrictions on voting rights. By drawing on the jurisprudence of the Court of Justice of the Communities and the European Court of Justice, they assert that the argument arising from property rights does not hold water and that providing "fair compensation" for shareholders with multiple voting rights will be sufficient. As well as the different modifications that intend to improve the provisions in the draft directive and include multiple voting rights shares in the field of the directive's application, they propose: 1) clarifying the notion of indirect take-overs; 2) banning the quotation on the stock exchange of holdings whose only activity is the management of investments in other companies; 3) introducing a notification mechanism by Member States and authorisation by the Commission for new "golden shares" or other measures restricting the transfer of stock or the exercise of voting rights.
The hearing on 28 January will allow representatives of the institutions to speak (Philip Remnant, Director General of the London Take-Over Panel; Paul Arlman, Secretary General of the European Federation of Stock Market Monitoring Organisations; José Maria Garrido Garcia, Director of the Spanish Authority for Financial Monitoring (CNMV), the companies: Novo Noridisk, Vodafone, BASF, Rhodia Group, as well as a company that helps minority shareholders (Deminor), Joan Bloemarts for the ETUC and Savino Pezzota representing the Confederation of Italian Unions.