The Notion of Equality in European Take-Over Regulation

17 Pages Posted: 18 Apr 2002

See all articles by Paul L. Davies

Paul L. Davies

University of Oxford- Faculty of Law; European Corporate Governance Institute (ECGI)

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

Davies, Paul L., The Notion of Equality in European Take-Over Regulation (January 2002). Available at SSRN: or

Paul L. Davies (Contact Author)

University of Oxford- Faculty of Law ( email )

Harris Manchester College
Oxford, OX1 3TD
United Kingdom

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels


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