This paper analyses the efficiency of the mandatory bid rule under the framework of Directive 2004/25/EC on takeover bids. The rule requires that anyone acquiring control of a listed company is obliged to make an offer to be addressed to all the shareholders of the target company for all their holdings at an equitable price. In the efforts of the EU to promote more efficient capital structures in Europe, the rule is mainly regarded as a protection mechanism for the minority shareholders. Apart from that, the rule offers certain additional advantages. However, the significance of the mandatory bid rule is limited mostly due to the wide discretion the Directive leaves to Member States. In light of cultural, structural and pre-existing regulatory differences among Member States, it is sensible that their flexibility in establishing additional bid measures and exceptions has prevented the purposes of the rule from materialising. Furthermore, the rule itself suffers from vague definitions which further create problems of interpretation and make its proper implementation much more difficult.
Many scholars have commented on the rule’s failure to achieve its legislative goals. After nearly a decade since the issuance of the Takeover Directive, it is a real challenge to examine this issue.
Collections
Show Collections
