522 19 A Listed Company as the Target
the sale of assets that it will not want to keep after the acquisition. Even the target
company may have to contact many advisers and other parties.
Securities markets laws can require secrecy by restricting selective disclosure
of information and by prohibiting market abuse. On the other hand, securities
markets laws typically require the disclosure of things that can influence the price
of securities, unless there is a legitimate reason to delay disclosure (such as nego-
tiations^13 or the need to obtain the supervisory board’s consent in companies that
have a two-tier board strutrure^14 ). Securities markets laws also require disclosure
when that legitimate reason to delay disclosure does not exist or has ceased to ex-
ist, and when the holdings of a shareholder have reached a certain threshold of
votes. Even the target company may, at some point in time, have a duty to disclose
negotiations or the existence of an offer.
Complicated legal framework. There is therefore tension between those two ob-
jectives (secrecy v disclosure). The same tension can be found in the regulation of
secrecy and disclosure.
There are even other factors which add to the complexity of the matter and
make it difficult to identify and interpret the applicable rules.
The information rules adopted at Community level to govern these issues are
typically minimum rules. Different rules can be applied depending on the Member
State.
This can be illustrated by the regulation of inside information in Germany and England. In
Germany, the Securities Trading Act (WpHG) requires issuers to disclose inside informa-
tion without undue delay.^15 There are exemptions. The issuer is obliged to notify the BaFin
about the applicable grounds for exemption.^16 Mimimum confidentiality obligations based
on the Directive on market abuse^17 are complemented by a broader requirement of secrecy
which follows from the general provisions of company law (duty of care, secrecy)^18 and the
general provisions of the law of obligations for members of the two boards and the advisers
to whom they pass on information.^19
In England, the duty to disclose inside information is based on the Listing Rules.^20 In-
side information must be disclosed as soon as possible. If an issuer is faced with an unex-
pected and significant event, a short delay may be acceptable if it is necessary to clarify the
situation.^21 There are exemptions.^22 Apart from the situations mentioned in DTR 2.5.3 R,
there are unlikely to be other circumstances where delay would be justified.^23
(^13) Article 3(1)(a) of Directive 2003/124/EC.
(^14) Article 3(1)(b) of Directive 2003/124/EC.
(^15) § 15 WpHG.
(^16) § 15(3) WpHG.
(^17) § 14 WpHG.
(^18) § 93(1) and § 116 AktG.
(^19) See Hopt KJ,Takeovers, Secrecy, and Conflicts of Interest: Problems for Boards and
Banks (October 2002). ECGI - Law Working Paper No. 03/2002.
(^20) LR 9.2.5 and DTR 2.2.1.
(^21) DTR 2.2.9.
(^22) DTR 2.5.1.
(^23) DTR 2.5.5 G.