Exclusion of US-Holders in Cross-Border Takeover Bids and the Principle of Equality in Tender Offers

16 Pages Posted: 8 May 2009

See all articles by Federico M. Mucciarelli

Federico M. Mucciarelli

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Dipartimento di Economia Marco Biagi, Modena; European Corporate Governance Institute (ECGI)

Date Written: May 7, 2009

Abstract

To avoid the cumulative application of takeover regulation of more jurisdictions, it is common practice to exclude from the offer shareholders resident in countries adopting extraterritorial conflict rules. Among such countries, the most significant case is that of US securities regulation: according to US case-law, in order to avoid the application of US takeover regulation and anti-fraud provisions, bidders should completely exclude any publicity of the offer in the US or to US resident and consider acceptances from US residents as void.

However, such restrictions could be at odds with the principle of equal treatments of target’s shareholders, provided for by the EU Takeover Directive. In the paper I argue that only restrictions to dissemination could be reconciled with the equality principle. On the contrary, restrictions to acceptance represent a clear violation of such principle, which can be admitted only if the cumulative application of US law would make the offer unfeasible.

Keywords: Cross-border tender offers, choice-of-law, US securities law, EC Takeover Directive, exclusion of US holders

JEL Classification: K22, K33

Suggested Citation

Mucciarelli, Federico M., Exclusion of US-Holders in Cross-Border Takeover Bids and the Principle of Equality in Tender Offers (May 7, 2009). Available at SSRN: https://ssrn.com/abstract=1399496 or http://dx.doi.org/10.2139/ssrn.1399496

Federico M. Mucciarelli (Contact Author)

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Dipartimento di Economia Marco Biagi, Modena

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Modena, Modena 41121
Italy

European Corporate Governance Institute (ECGI) ( email )

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1000 Brussels
Belgium

HOME PAGE: http://https://ecgi.global/users/federico-mucciarelli

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