544 19 A Listed Company as the Target
offeree company must have sufficient time and information to enable them to reach a prop-
erly informed decision on the bid; where it advises the holders of securities, the board of
the offeree company must give its views on the effects of implementation of the bid on em-
ployment, conditions of employment and the locations of the company’s places of business;
(c) the board of an offeree company must act in the interests of the company as a whole and
must not deny the holders of securities the opportunity to decide on the merits of the bid;
(d) false markets must not be created in the securities of the offeree company, of the offeror
company or of any other company concerned by the bid in such a way that the rise or fall of
the prices of the securities becomes artificial and the normal functioning of the markets is
distorted; (e) 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; (f) an offeree company must not be
hindered in the conduct of its affairs for longer than is reasonable by a bid for its securi-
ties.”
The Directive on takeover bids sets out minimum requirements, and Member
States may lay down additional conditions and provisions more stringent than
those of the Directive for the regulation of bids.^162
In England, the City Code on Mergers and Takeovers lays down a legal regime which is
more stringent. It covers certain companies, certain transactions, and certain persons. (a)
The Code applies to offers for companies and SEs which have their registered offices in the
UK, the Channel Islands or the Isle of Man if any of their securities are admitted to trading
on a regulated market in the UK or on any stock exchange in the Channel Islands or the Isle
of Man. It can apply even to certain other companies. (b) The Code applies to takeover bids
and merger transactions of the relevant companies, however affected. (c) It applies also to a
range of persons in the context of takeovers or other matters that fall within its scope.
In Germany, the Securities Acquisition and Takeover Act (WpÜG) applies to “offers for
the acquisition of securities which were issued by a target company and are admitted to
trading on an organised market” Target companies are public limited-liability companies
(AG, KGA) having their seat in Germany.
Both countries’ laws set out how they will be applied when the company has its regis-
tered office or its shares have been admitted to trading on a regulated market in another
Member State of the EEA.^163
Disclosure. Both the offeror and the target company’s board must disclose infor-
mation to shareholders and employees (section 12.6). The offeror must draw up
and make public in good time an offer document.^164 The board of the offeree com-
pany must draw up and make public a document setting out its opinion.^165
Conditions. The offer document must state all the conditions to which the bid is
subject.^166 Member States should lay down rules to cover the possibility of a bid’s
lapsing, the offeror’s right to revise the bid, the possibility of competing bids for a
(^162) Article 3(2) of Directive 2004/25/EC (Directive on takeover bids).
(^163) See Article 4 of Directive 2004/25/EC (Directive on takeover bids).
(^164) Articles 6 and 8 of Directive 2004/25/EC (Directive on takeover bids).
(^165) Article 9(5) of Directive 2004/25/EC (Directive on takeover bids).
(^166) Article 6(3)(h) of Directive 2004/25/EC (Directive on takeover bids).