Volume 45 (2008) / Issue 1
The Thirteenth Company Law Directive (“the Directive”) seeks to create a level playing field within the Community so as to allow EU companies to freely establish themselves in the EU through the acquisition of control over EU listed companies. In this context, the Directive prohibits the board of the target company from taking any action that could result in the frustration of the bid without express shareholder consent (the neutrality rule). Nevertheless, the Directive allows the board of the target company to seek a competitive bidder (a white knight) to ward off a public bid. The Directive requires Member States to provide for legislation on competing bids. The question may be raised whether the discretion left to Member States in this regard will not bring into jeopardy the objectives of the Directive. The answer to this question is complex, more particularly in the light of the opt-outs that are incorporated in the Directive. As the Directive does not provide for a comprehensive harmonization, the article discusses to what extent the powers of Member States and the freedom of EU companies in the field of takeover law are affected by primary Community law. Finally the authors look at the remedies which are available for shareholders or bidders suffering a prejudice as a result of a corporate decision (in particular with respect to a competing bid) that complies with the national rules on takeover bids but is contrary to the Directive or the EC Treaty.
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