Does the Takeover Bids Directive Need Revision?

Abstract

Does the Takeover Bids Directive need revision? The answer to this question will most likely affect the Commission’s assessment of the Directive in 2011 and could initiate its revision. Proponents of such a revision urge the Commission to redress the shortcomings of the Directive’s implementation in two ways: 1) revising the mandatory provisions of the Directive making them less easily to avoid; and 2) creating new provisions that would weaken incumbent managers’ lock on control that would make corporate control more contestable. In this short essay, however, we show that the Commission’s opt out strategy has proved, in practice, to be remarkably popular with Member States and does not need any further discussion.

Keywords: Takeover Bids Directive, Market for Corporate Control, EU Lawmaking, Mandatory Bid Rule, Board Neutrality, Break Through Rule

JEL Classification: K2, G34, G38