540 19 A Listed Company as the Target
According to the German WpÜG, the offeror has a duty to disclose a decision to make a
public offer. If the offeror is an AG, it must be disclosed after both boards have accepted it.
The main rule is that it is not permitted to wait for a resolution by the general meeting.^130
The City Code on Takeovers and Mergers generally requires absolute secrecy before an
announcement of the bid.^131 Before the board of the offeree company is approached, the re-
sponsibility for making an announcement lies with the offeror.^132 Following an approach to
the board which may or may not lead to an offer, the primary responsibility for making an
announcement will normally rest with the board of the offeree company.^133 A brief an-
nouncement that talks are taking place will normally suffice, until a firm intention to make
an offer has been notified.^134 The offeree company must make an announcement “when a
firm intention to make an offer ... is notified to the board of the offeree company from a se-
rious source, irrespective of the attitude of the board to the offer”, and in certain other cir-
cumstances.^135 There may be a duty to make an announcement already where the company
is the subject of rumour or speculation.^136
Announcing the bid. After announcing the decision to make a public takeover bid,
the offeror is required to announce the bid by drawing up and making public “in
good time” an offer document.^137 Member States must ensure that a bid is made
public “in such a way as to ensure market transparency and integrity for the secu-
rities of the offeree company, of the offeror or of any other company affected by
the bid, in particular in order to prevent the publication or dissemination of false
or misleading information”.^138
Under German law, the offeror must not announce the offer unless it has ensured that it will
have the necessary funds at its disposal when consideration falls due.^139 According to the
general principles of the City Code, an offeror “must announce a bid only after ensuring
that he/she can fulfil in full any cash consideration if such is offered, and after taking all
reasonable measures to secure the implementation of any other type of consideration”.^140
Prospectus. Although the Prospectus Directive and implementing legislation re-
quire the issuer to publish a prospectus when securities are offered to the public,
many of the exemptions under the Directive apply in a takeover context. For ex-
ample, there are exemptions that apply when securities are offered in connection
with a takeover by means of an exchange offer (section 5.9.3).
(^130) § 10(1) WpÜG.
(^131) Rule 2.1 of the City Code on Takeovers and Mergers.
(^132) Rule 2.3 of the City Code on Takeovers and Mergers.
(^133) Rule 2.3 of the City Code on Takeovers and Mergers.
(^134) Rule 2.4 of the City Code on Takeovers and Mergers.
(^135) Rule 2.2 of the City Code on Takeovers and Mergers.
(^136) Rule 2.2 of the City Code on Takeovers and Mergers.
(^137) Article 6(2) of Directive 2004/25/EC (Directive on takeover bids).
(^138) Article 8(1) of Directive 2004/25/EC (Directive on takeover bids).
(^139) § 13(1) WpÜG. See Riegger B, Kapitalgesellschaftsrechtliche Grenzen der Finanzierung
von Unternehmensübernahmen durch Finanzinvestoren, ZGR 2008 p 234.
(^140) General Principle 5 of the City Code on Takeovers and Mergers.