542 19 A Listed Company as the Target
Acting in concert and the mandatory bid: the Deutsche Börse case. The Deutsche
Börse case shows how acting in concert can influence the duty to make a manda-
tory bid.
In 2005, a group of activist shareholders led by The Children’s Investment
Fund (TCI), a London hedge fund, prevented Deutsche Börse AG from taking
over London Stock Exchange (LSE) and succeeded in ousting the chairman of
Deutsche Börse’s management board and reshuffling its supervisory board.
Now, according to German law, a mandatory bid must be made where a share-
holder holds 30% of the voting rights. The same rules apply where different
shareholders coordinate their conduct (concerted action). The BaFin inspected
whether TCI and Atticus Capital, another hedge fund, were acting in concert and
had a duty to make a mandatory bid. However, no evidence of concerted action
could be found. According to rules that applied at the time, concerted action was
basically limited to the use of voting rights.^151
This led to a change of law. The definition of “acting in concert” was extended
by the Risk Limitation Act (Risikobegrenzungsgesetz) to cover a wider range of
situations.^152 There is “acting in concert” for example where two or more parties
“cooperate in a manner capable of influencing the issuer’s entrepreneurial orienta-
tion persistently or to a material extent”.^153 Although one-off cases are ex-
empted,^154 the broad definition of acting in concert may force parties sharing the
same interests to coordinate their actions in order not to exceed the threshold of
30%.^155
The City Code on Takeovers and Mergers defines acting in concert as follows: “Persons
acting in concert comprise persons who, pursuant to an agreement or understanding
(whether formal or informal), co-operate to obtain or consolidate control ... of a company
or to frustrate the successful outcome of an offer for a company. A person and each of its
affiliated persons will be deemed to be acting in concert with each other.” Certain catego-
ries of persons are presumed to be acting in concert unless the contrary is established.^156
Under the Disclosure and Transparency Rules (DTR) attached to the Listing Rules, a per-
son will also be an indirect holder of shares held by a third party where they agree that they
(^151) For the applicable rules, see, for example, Barry S, Bracht H, Casper M, Agreements on
voting conduct in the election of the supervisory board (Aufsichtsrat) as Case for a
Mandatory Offer - Case Note on OLG München of 27 April 2005, German L J, Decem-
ber 2005.
(^152) § 22(2) WpHG and § 30(2) WpÜG.
(^153) § 30(2) WpÜG: “... ausgenommen sind Vereinbarungen in Einzelfällen. Ein abges-
timmtes Verhalten setzt voraus, dass der Bieter oder sein Tochterunternehmen und der
Dritte sich über die Ausübung von Stimmrechten verständigen oder mit dem Ziel einer
dauerhaften und erheblichen Änderung der unternehmerischen Ausrichtung der
Zielgesellschaft in sonstiger Weise zusammenwirken ...”
(^154) § 30(2) WpÜG and BGHZ 169, 98 (BGH II ZR 137/05).
(^155) See, for example, Süßmann R, Das „Risikobegrenzungsgesetz“ schafft neue Risiken,
FAZ, 10 October 2007 p 23.
(^156) The City Code on Mergers and Acquisitions, Definitions Section.