the control of corporate europe - ecgi.pptVIP

The Future of Corporate Takeovers in Europe ECGI Session at the Federation of European Securities Exchanges 6th European Financial Markets Convention Brussels, 31 May 2002 Corporate Takeover Defences in Europe Marco Becht Université Libre de Bruxelles ECGI The U.K. Takeover Panel says : “Though Shalt not have Post-Bid Defenses” No “Level Playing Field” with the US How typical is Texaco? Poison Pill is always available Staggered Boards 58% in IRRC sample (SP 1500 + 1000) 70% of IPO firms in 2001 Only 92 hostile bids 1996-2000 32 failed (34.8%) 23 acquired by bidder (25%) No “Level Playing Field” within Europe Main Pre-Bid Defences in Europe Majority voting blocks with proportional amounts of capital with disproportional amounts of capital (shares with no vote, multiple votes, pyramids) Voting right ceilings Shares with special rights How will the “breakthrough rule” affect these pre-bid defenses? Blocks Percentage of listed companies under majority control Percentage of listed companies with a blocking minority of at least 25% Companies not affected by the “Breakthrough Rule” Allianz AG and Munich Re AG Companies under blockholder control potentially affected by the “Breakthrough Rule” Volkswagen AG Companies under Minority Control potentially affected by the “Breakthrough Rule” Radical Italians Voting right restrictions are null and void in a full bid for a privatised company * Texaco Inc. (Global FT500 #162) Texaco Inc. Source : Proxy Statement for meeting April 26, 2000; IRRC 2000 no 5%+ block holder blank check preferred stock poison pill shareholder rights plan pill approved by shareholders vote (1998) : 65.1% for, 34.1% against 1/3 staggered board with 3 year terms 11/12 directors independent Source : country chapters in “The Control of Corporate Europe” Source : country chapters in Barca and Becht (2001) often with much less capital at times with less capital KBC Bank and Insurance Holding Co (Euronext 100 company) Source : (consulted 24 Ma