The Anti-Opa Defenses after the Thirteenth Directive

Abstract

In the forthcoming European directive on take-over bids, provisions restrict the action of the target board to defend itself against the take-overs, especially by forbidding any action or "completing any action" that is likely to jeopardise the take-over. This provision will have significant impact on actual practice in several member states, as it sometimes was usual to issue subscription rights to controlling shareholders or to authorise the board to place additional securities in case of "an imminent and grave danger". The limits of the prohibition of defensive techniques are analysed. However the directive does not prohibit defensive techniques, put into place before the take-overs is imminent, but not involving any board action. In a last section, the policy issues most underlying these rules are analysed, especially the contradiction between this prohibition of the so-called defensive action against the continuing validity of protective action. Also the differences with the U.S. attitude as to defences is mentioned.

JEL Classification: K22