Brussels, 04/02/2003 (Agence Europe) - Germany and the United Kingdom are working together on several issues, it was confirmed by the standing British representation in Brussels after The Financial Times had revealed a services alliance between Berlin and London on the takeover issue. The case of the agreement on savings tax shows that collaboration between Eichel and Brown is working well, the British say. According to the British daily, the United Kingdom would be willing to support Germany to obtain a radical change of the new draft directive on public takeover bids, in discussion with the Council and Parliament. Germany above all hopes to abolish the derogation that could enjoy multiple voting rights associated to certain shares in France and in the Scandinavian countries. On the other hand, Berlin would support London on other issues, such as that on the rights of temporary workers.
Discussions on the takeover directive within the Council group are still far from complete, although work is solely focused on new articles compared to the draft directive rejected in July 2001 by the European Parliament. The Presidency plans, in principle, to organise an exchange of views on the state of progress of work, during the Council on 3 March. As in Parliament, discussions within the Council essentially relate to the question of multiple voting rights
Germany considers that such rights run counter to the ambitions of the directive, namely that of re-establishing an equal playing field by doing away with legal obstacles to public purchase offers. In its view, this derogation introduced in Article 11 of the directive is all the more inappropriate as Article 9 compels the administrative board of a company targeted by a hostile takeover bid to obtain prior authorisation from its shareholders before taking defence measures - an obligation that had made German MEPs and the German government block the first draft directive. Council discussions cover the ways to rebalance these two articles. Several alternatives are possible: 1) shareholders with multiple voting rights could obtain compensation in addition to the purchase price per share. Several experts, however, consider it difficult to fix a fair price for compensation; 2) existing multiple voting rights would be maintained, but new actions of this kind may no longer be introduced in the future, according to the principle of the "grandfather clause", and will not open the right to compensation in the case of takeover bids; 3) shares with multiple voting rights with compensation would be maintained during a transitional period. In the worst case, Articles 9 and 11 could be completely abolished, which would empty the directive of a large part of its substance but would allow a minimum agreement on other points, such as the definition of a "fair price" for the compulsory repurchase of a share or transparency obligations, notes one observer. (See EUROPE of 30 January, p.11, on the subject of a recent hearing of the EP's Committee on Legal Affairs regarding the proposal of directive).