Interactions between Market Practices and Takeover Rules (French Takeover Rules and Practices(1))

Abstract

This is the transcript of an interview with French M&A lawyers regarding French takeover rules and practices, mainly on the issues about interactions between market practices and takeover rules. Maître Segain is a very knowledgeable lawyer with extensive experience in French takeover deals and have been involved with the discussions about recent amendment of French takeover rules. Maître Thomas is a lawyer also knowledgeable in the theory and practice of takeover deals and the co-author of “France” in Mergers & Acquisitions 2011 (ICGL, 2011). The interview was held on February 2011 at the conference room of Herbert Smith LLP, Paris office.

The Issues discussed in this interview are as follows.

1. Shareholding structures in French listed companies and their effect on takeover bids.

2. Irrevocable undertakings to tender shares to the offer.

3. Defensive measures(1)(double voting rights, identifiable bearer securities, change of control clauses, etc.)

4. Defensive measures(2) (the French-style poison pill or “bons Breton”.)

5. Acquisition of shares during a takeover bid and issue raised by the use of equity derivatives.

6. Function of financial institutions in the process of takeover bids.

7. Descriptions in the offer document.

8. Difference between France and the UK in the operation of the mandatory offer rule.

9. Demands for reforms of French takeover rules.

Keywords: takeover, France, Shareholding structures, Irrevocable undertakings, defensive measures, French-style poison pill, bons Breton”, offer document, financial institutions, equity derivatives, Herbert Smith, Interactions between Market Practices and Takeover Rules

JEL Classification: G28, G34, G38, K23, K42