Standards & Guidance
Takeover directive looks set for failure
The EU’s
takeover directive is failing to lift barriers to cross-border takeovers, with
member states taking advantage of opt-outs and even granting companies extra
powers to thwart bids, a
European Commission
report has concluded.
The directive’s main provisions seek to restrict the means by which companies
are able to defend themselves against bidders – one method is by recommending
poison pill defences be subjected to shareholder approval. However, these
measures are not mandatory.
Charlie
McCreevy, internal market commissioner, said “The protectionist attitude of
a few [member states] seems to have had a knock-on effect on others. If this
trend continues, then there is a real risk that companies launching a takeover
bid will face more barriers, not fewer.”
The editorial in the Financial
Times (28 February) called this outcome “dismal” and said the Commission
needs to rethink its approach. The Commission’s original instincts were sound,
argued the FT, but the European Parliament severely diluted the plans.
Once the central provisions became voluntary rather than
mandatory, said the FT, then faced with the prospect of offending vested
interests, a large number of member states decided to allow companies to retain a
range of defensive tactics.
Links
European Commission
Report
Charlie McCreevy
Financial Times
March 2007 |
