The Notion of Equality in European Take-Over Regulation
17 Pages Posted: 18 Apr 2002
Date Written: January 2002
The paper explores the rule of equal treatment (essentially the sharing of consideration) in take-over regulation. It identifies three situations within take-over regulation in which an equality rule can be imposed:
- within the general offer,
- as between those who accept the general offer and those who deal with the offeror outside the bid,
- upon the acquisition or transfer of control of a company.
The functions of equality rules in these situations are then analysed with reference to six European jurisdictions which have substantial experience with take-over and/or have recently reformed their take-over regulation. These countries are: Austria, France, Germany, Italy, Switzerland and the UK. It is suggested the equality rules perform three functions:
- aiding shareholders in the target company to make un-pressurised decisions on take-over offers,
- providing equality of treatment of shareholders close to the market and those who are not,
- strengthening the legal protection of non-controlling shareholders.
However, these benefits come with some costs attached. The nature of the trade-offs made by rule makers in different jurisdictions in the light of these costs and benefits are examined.
Keywords: tender offers, takeovers, equality of treatment, Europe
JEL Classification: K2
Suggested Citation: Suggested Citation