Brussels, 20/11/2003 (Agence Europe) - The Italian presidency is hoping to obtain a "general orientation" on the "take-overs directive" during the Competitiveness Council on 27 November. Negotiations are ongoing between the Council, European Parliament and the Commission, in the hope of obtaining an agreement in the first reading. On Friday the Permanent Representatives Committee will examine a Presidency draft that accepts most of the "Portuguese compromise" that has been discussed for several months. Several Member States were still wary just before the Coreper meeting. The legal committee and the committee for the internal market at the Parliament are expected to examine the Klaus Heiner Lehne report next week, which would be submitted to the plenary in December.
The compromise being discussed leaves it up to Member States to apply the two most controversial articles of the draft or not: Article 9, which insists that the management of a company has the agreement of its shareholders when taking defensive measures against a hostile take-over and Article 11, which lays down the rules on the limits to shareholder voting rights. Article 11 includes a "grand father clause" which stipulates that voting restrictions are included in agreements that existed before the directive are not affected. However, it does state that "multiple voting rights", associated with certain shares in Scandinavian countries will be suspended during voting by shareholders on adoption of defensive measures.
Commissioner for the Internal Market, Frits Bolkestein is, for the present, refusing to support this compromise, which in his view leaves the directive without any substance. Germany, which is opposed to the systematic application of this principle is said to agree for the most part with the options system but still want to examine the draft further, indicated a German diplomat. Germany also has doubts about an Article that explains that Article 11 does not apply to special voting rights held by Member States in a company when these are conferred to them by the law and are compatible with the treaty.
Sweden, Denmark, Finland, Belgium, Luxembourg and Spain are still unenthusiastic about the optional character of the draft, which allows several systems to co-exist in Member States. France also has "doubts" about the compromise. Sweden has always had reservations about the issue of "multiple voting rights": it believes that the question of "compensation", which could be given to shareholders who have multiple voting rights has not been sufficiently sorted out. The suspension of multiple voting rights had been included in the directive at the request of Germany in the name of equal treatment. Sweden is insisting that having these voting rights has never prevented it from being one of the countries where there has been most mergers over recent years, as is the case with Volvo for example.
Parliament rapporteur, Klaus-Heiner Lehne will, on the other hand, be in favour of compromise. His entourage is certain that this options proposal will obtain a large majority in the different committees involved and by Parliament for the main part. In July 2001 the European Parliament rejected the conciliation draft ofthe previous directive on take-overs due to pressure from Germany.