19.10 Public Takeover Offers 547will own 100% of the company. The bidder’s actions will then not be constrained
by minority shareholders’ rights.^180 Minority shareholders have a sell-out right un-
der the same circumstances.^181
In practice, squeeze-out rights are often litigated. In Germany, practically all
squeeze-out processes end up in the court. There is a small class of so-called “pro-
fessional plaintiffs” (Berufskläger) who try to force the company to pay more le-
gally or illegally.^182
Mandatory bid. The Directive contains a mandatory bid rule and sets out the
price and form of consideration.^183 However, the Directive is silent on the thresh-
old triggering the duty to make a bid, and the mandatory bid rule does not apply
where control has been acquired following a voluntary bid. Under the German
WpÜG and the City Code, a mandatory offer is triggered at a threshold of 30%.^184
US law. The contents of US law have been explained in numerous specialist ar-
ticles and books.^185 The basic instrument for the regulation of tender offers in fed-
eral US law is the Williams Act of 1968 which amended the Securities Exchange
Act 1934 by adding sections 13(d) and (e) and 14(d) and (e).^186 The states have
adopted their own takeover statutes. The US model is directed towards the objec-
tive of providing full disclosure of information to the shareholders, when major
changes of control occur in their companies, as well as a period of time (a 20-day
period) which may be considered as sufficient for them to evaluate the bids and
decide, free from coercion. According to case-law, the use of takeover defences is
relatively free and governed by the business judgment rule. The duties of the
board change in change of control transactions.
(^180) Article 15 of Directive 2004/25/EC (Directive on takeover bids).
(^181) Article 16 of Directive 2004/25/EC (Directive on takeover bids).
(^182) Jahn J, Meist enden Aktionärsausschlüsse vor Gericht, FAZ, 23 October 2007.
(^183) Article 5 of Directive 2004/25/EC (Directive on takeover bids).
(^184) § 29 WpÜG; Rule 9.1 of the City Code on Takeovers and Mergers.
(^185) See Cole J Jr, Kirman I, Takeover Law and Practice. In: PLI, Doing Deals 2008: Under-
standing the Nuts & Bolts of Transactional Practice. New York City (2008) pp 11–158.
(^186) For an introduction and comparison of UK and US law, see Barboutis GO, Takeover
Defence Tactics: Part I: The General Legal Framework on Takeovers, Comp Lawyer
20(1) (1999) pp 14–22.