354 10 Exit of Shareholders
disclosing this information to the public. The thresholds are 5%, 10%, 15%, 20%,
25%, 30%, 50% and 75% of voting rights.
Information that influences share price. The Market Abuse Directive not only
prohibits abuse but requires issuers to publish inside information, that is, “infor-
mation of a precise nature which has not been made public, relating, directly or
indirectly, to one or more issuers of financial instruments or to one or more finan-
cial instruments and which, if it were made public, would be likely to have a sig-
nificant effect on the prices of those financial instruments or on the price of related
derivative financial instruments”.
Under some circumstances, disclosure of inside information may be delayed,
provided that the delay would not be likely to mislead the public and the issuer is
able to ensure the confidentiality of that information. An NDA and transaction-
specific insider lists are therefore a must in takeovers where at least one of the par-
ticipating companies has gone public.
Prospectus or offer document. The Prospectus Directive and national
provisions that implement it require the issuer to publish a prospectus when
securities are offered to the public. The prospectus must contain all information
which, according to the particular nature of the issuer and of the securities offered
to the public or admitted to trading on a regulated market, is necessary to enable
investors to make an informed assessment of the assets and liabilities, financial
position, profit and losses, and prospects of the issuer and of any guarantor, and of
the rights attaching to such securities.
However, there are many exemptions from the obligation to publish a
prospectus. Exemptions apply when securities are offered in connection with a
takeover by means of an exchange offer, provided that a document is available
containing information which is regarded by the competent authority as being
equivalent to that of the prospectus. The Directive on takeover bids requires the
publication of such an offer document.
Directive on takeover bids. The core rules governing public takeover bids have
been approximated by the provisions of the Directive on takeover bids.
In October 2002, the European Commission presented a proposal for a Direc-
tive on takeover bids after an earlier proposal was narrowly rejected by the Euro-
pean Parliament in July 2001. Countries like Germany and Sweden had voted
against the earlier proposal because they believed that the proposal would have
limited the use of takeover defences and increased cross-border takeovers and for-
eign ownership of companies. The UK had voted in favour of the earlier proposal
because UK-based financial firms would have been likely bidders and the pro-
posal was, to a large extent, based on the provisions of the City Code on Take-
overs and Mergers. The new proposal was accepted.
The Directive ensures a basic level of disclosure of information during a take-
over bid and provides that shareholders, in particular minority shareholders,
should be afforded a minimum level of protection equivalent throughout the EU.
Scope. The Directive on takeover bids applies to “takeover bids for the securi-
ties of companies governed by the laws of Member States, where all or some of
those securities are admitted to trading on a regulated market ... in one or more