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The Autorité des Marchés Financiers (AMF) has put out to public consultation a set of amendments to the rules on takeover bids in Book II of its General Regulation.
The AMF is revising its General Regulation to take into account the recent legal changes regarding takeover bids. The changes, brought in by Act No. 2014-384 of 29 March 2014 on “recapturing the real economy”, are in particular related to the implementation of the following measures:
- Introducing a mandatory acceptance condition set at 50% of the share capital or voting rights. If a bid fails to fulfil this condition, it will lapse and the tendered shares will be returned to their holders. In consequence, the following issues will be addressed in the AMF General Regulation: exemptions from the mandatory acceptance condition, coordination with any other acceptance condition set by the bidder, rules on suspending voting rights if a mandatory bid lapses, and restrictions on dealings rules during the offer period for a bid subject to the mandatory acceptance condition.
- Lowering the so-called “acquisition speed limit” from 2% to 1%. Under current rules, a shareholder holding between 30% and 50% of a company’s capital or voting rights raising that stake by more than 2% over 12 consecutive months is required to file a draft tender offer. Under the new rule, the tolerated 12-month limit will be lowered to 1%.
- Strengthening the role played by the works council in the takeover bid process. This measure requires coordinating the works council consultation and tender offer timelines. It also raises the issue of the link between the information provided to the works council and that provided to the market.
- Abandoning the board passivity rule during the offer period. The law goes back on the board passivity rule adopted in 2006 when the Takeover Directive was transposed into French law. The management of an offeree company can now adopt various defensive measures in the event of a hostile bid. Among other things, this raises the questions of how the new framework will dovetail with the general principles applicable during takeover bids, the information to be disclosed about the defensive measures adopted, and the possibility for a bidder to withdraw a bid if defensive measures are activated.
All the proposed amendments to the General Regulation have been collated in a single document published on the AMF website under Publications > Public consultations.
Consultation responses must be emailed to directiondelacommunication@amf-france.org by 2 June.
