the swedish implementation of the takeover directive

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Rolf Skog The Swedish Implementation of the Takeover Directive Rolf Skog 2006

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The Swedish Implementation of the Takeover Directive. Rolf Skog 2006. Sweden – Takeover Activity. 1960 – 1990 1960s: 29 takeover bids 1970s: 38 takeover bids 1980s: 137 takeover bids First ”hostile” bid 1979 Approx 10% ”hostile bids” during the 1980s. Sweden – Takeover Activity. - PowerPoint PPT Presentation

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Page 1: The Swedish Implementation of the Takeover Directive

Rolf Skog

The Swedish Implementation of the Takeover Directive The Swedish Implementation of the Takeover Directive

Rolf Skog

2006

Rolf Skog

2006

Page 2: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Takeover ActivitySweden – Takeover Activity

1960 – 1990

1960s: 29 takeover bids

1970s: 38 takeover bids

1980s: 137 takeover bids

First ”hostile” bid 1979

Approx 10% ”hostile bids” during the 1980s

1960 – 1990

1960s: 29 takeover bids

1970s: 38 takeover bids

1980s: 137 takeover bids

First ”hostile” bid 1979

Approx 10% ”hostile bids” during the 1980s

Page 3: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Takeover ActivitySweden – Takeover Activity

1990 – 2004

358 Takeover bids

293 Completed bids; 20 bids/year, 7%

Almost all bids voluntary, very few mandatory bids

Approx 10% ”hostile” bids

In 25 % a foreign bidder, increasing proportion

1990 – 2004

358 Takeover bids

293 Completed bids; 20 bids/year, 7%

Almost all bids voluntary, very few mandatory bids

Approx 10% ”hostile” bids

In 25 % a foreign bidder, increasing proportion

Page 4: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Takeover ActivitySweden – Takeover Activity

2005

15 Takeover bids

10 Successful bids

5 Unsuccessful bids (3 mandatory/2 voluntary)

1 Large, ”hostile” bid: Old Mutual – Skandia

In 2/3 of the 15 bids a foreign bidder

(3 Mergers)

2005

15 Takeover bids

10 Successful bids

5 Unsuccessful bids (3 mandatory/2 voluntary)

1 Large, ”hostile” bid: Old Mutual – Skandia

In 2/3 of the 15 bids a foreign bidder

(3 Mergers)

Page 5: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – The Takeover RegulationSweden – The Takeover Regulation

Public debate on takeovers in the late 1960´s

Takeover Code 1971 (UK role model)

Several revisions over the years, latest issue 2003

Takeover Code included in the Stockholm Stock Exchange Listing Agreement (sanctions)

Securities Council (”Takeover Panel”) 1986

Public debate on takeovers in the late 1960´s

Takeover Code 1971 (UK role model)

Several revisions over the years, latest issue 2003

Takeover Code included in the Stockholm Stock Exchange Listing Agreement (sanctions)

Securities Council (”Takeover Panel”) 1986

Page 6: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – The Takeover CodeSweden – The Takeover Code

All bidders, all companies listed in Sweden

”Cash confirmation”

Press release, Offer document

Equal treatment of shareholders

Pre-, During-, Post-bid acquisitions

Board neutrality unless shareholder approval

Mandatory bid, 30 %

Squeeze out / Sell out (CA)

All bidders, all companies listed in Sweden

”Cash confirmation”

Press release, Offer document

Equal treatment of shareholders

Pre-, During-, Post-bid acquisitions

Board neutrality unless shareholder approval

Mandatory bid, 30 %

Squeeze out / Sell out (CA)

Page 7: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – The Securities CouncilSweden – The Securities Council

Statements (written) and dispensation

Consultations

Approx 350 statements; majority on TO

In 2005 more than 50 statements

Speedy process; many statements within 24 h

No sanctions, except public censure

Sanctions by the Stock Exchange for listed bidders and targets

Statements (written) and dispensation

Consultations

Approx 350 statements; majority on TO

In 2005 more than 50 statements

Speedy process; many statements within 24 h

No sanctions, except public censure

Sanctions by the Stock Exchange for listed bidders and targets

Page 8: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Implementation of the DirectiveSweden – Implementation of the Directive

The Committee on Takeovers, set up by the Ministry of Justice in 2004

Task: to put forward a proposal on form and substance

Report in June 2005 (”New Regulation of Public Takover-bids”)

Public consultation

Bill to Parliament April 2006 – Decision May 2006

The Committee on Takeovers, set up by the Ministry of Justice in 2004

Task: to put forward a proposal on form and substance

Report in June 2005 (”New Regulation of Public Takover-bids”)

Public consultation

Bill to Parliament April 2006 – Decision May 2006

Page 9: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Implementation of the DirectiveSweden – Implementation of the Directive

Form

Basic alternatives:

1) Legislation

2) Legislation and regulation by delegation

3) Legislation, regulation by delegation and self-regulation

Form

Basic alternatives:

1) Legislation

2) Legislation and regulation by delegation

3) Legislation, regulation by delegation and self-regulation

Page 10: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Implementation of the DirectiveSweden – Implementation of the Directive

Form

- The ”success” of the self-regulatory system

- Strong wish among market participants to keep as

much as possible intact, especially the Securities

Council.

Form

- The ”success” of the self-regulatory system

- Strong wish among market participants to keep as

much as possible intact, especially the Securities

Council.

Page 11: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Implementation of the DirectiveSweden – Implementation of the Directive

Form

The Swedish Constitution

No delegation of legislative power from the Parliament

to the Government within the private law area (personal

status of private subjects or their personal and

economic interrelationships)

Form

The Swedish Constitution

No delegation of legislative power from the Parliament

to the Government within the private law area (personal

status of private subjects or their personal and

economic interrelationships)

Page 12: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Implementation of the DirectiveSweden – Implementation of the Directive

Form

Combination of legislation and self-regulation

All marketplaces must, by law, have rules on takeovers

All bidders must, by law, agree to follow the takeover rules

Mandatory bid by law

Form

Combination of legislation and self-regulation

All marketplaces must, by law, have rules on takeovers

All bidders must, by law, agree to follow the takeover rules

Mandatory bid by law

Page 13: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Implementation of the DirectiveSweden – Implementation of the Directive

Competent Authority

The Financial Supervisory Authority, with power to:

Monitor the marketplaces

Monitor bidders

Monitor mandatory bids

Dispensate from the mandatory bid and prohibition on defensive measures (delegation possible)

Competent Authority

The Financial Supervisory Authority, with power to:

Monitor the marketplaces

Monitor bidders

Monitor mandatory bids

Dispensate from the mandatory bid and prohibition on defensive measures (delegation possible)

Page 14: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Implementation of the DirectiveSweden – Implementation of the Directive

Marketplaces

Must have rules on takeovers

Monitor bids (bidders, targets, advisors)

Interpret and dispensate from the rules

(delegation possible)

Marketplaces

Must have rules on takeovers

Monitor bids (bidders, targets, advisors)

Interpret and dispensate from the rules

(delegation possible)

Page 15: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Implementation of the DirectiveSweden – Implementation of the Directive

Securities Council

Continue on the basis of delegation from – Financial Supervisory Authority – Marketplaces

Interpretation

Dispensation

Securities Council

Continue on the basis of delegation from – Financial Supervisory Authority – Marketplaces

Interpretation

Dispensation

Page 16: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Implementation of the DirectiveSweden – Implementation of the Directive

Substance

Art 1 Scope of application –

All bids on Swedish companies and foreign companies listed in Sweden

Art 2 Definitions – minor adjustments

Art 3 General principals – implement strictly

Substance

Art 1 Scope of application –

All bids on Swedish companies and foreign companies listed in Sweden

Art 2 Definitions – minor adjustments

Art 3 General principals – implement strictly

Page 17: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Implementation of the DirectiveSweden – Implementation of the Directive

Substance

Art 4 Supervisory authority and applicable law – Financial Supervisory Authority

Art 5 Protection of minority shareholders –

Mandatory bid, 30 % votes, bidprice not less than highest price paid within 6 months

Substance

Art 4 Supervisory authority and applicable law – Financial Supervisory Authority

Art 5 Protection of minority shareholders –

Mandatory bid, 30 % votes, bidprice not less than highest price paid within 6 months

Page 18: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Implementation of the DirectiveSweden – Implementation of the Directive

Substance

Art 6 Information concerning bids –

Pressrelease and offer document, minor adjustments

Art 7 Time allowed for acceptance – 3–10 weeks

Art 8 Disclosure – No amendments

Substance

Art 6 Information concerning bids –

Pressrelease and offer document, minor adjustments

Art 7 Time allowed for acceptance – 3–10 weeks

Art 8 Disclosure – No amendments

Page 19: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Implementation of the DirectiveSweden – Implementation of the Directive

Substance

Art 9 Obligations of the target company board –

Opt in, already in existence

Art 10 Information on ”control mechanisms” –

Amendments to the Annual Accounts Act

Substance

Art 9 Obligations of the target company board –

Opt in, already in existence

Art 10 Information on ”control mechanisms” –

Amendments to the Annual Accounts Act

Page 20: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Implementation of the DirectiveSweden – Implementation of the Directive

Substance

Art 11 Break through –

Opt out, but amendments to the Sw Companies Act

Compensation by the bidder to be decided by the GM

Art 12 Reciprocity - No

Substance

Art 11 Break through –

Opt out, but amendments to the Sw Companies Act

Compensation by the bidder to be decided by the GM

Art 12 Reciprocity - No

Page 21: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Implementation of the DirectiveSweden – Implementation of the Directive

Substance

Art 13 Other rules – No amendments

Art 14 Information to and consultation of employees – Amendments

Substance

Art 13 Other rules – No amendments

Art 14 Information to and consultation of employees – Amendments

Page 22: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Implementation of the DirectiveSweden – Implementation of the Directive

Substance

Art 15 Squeeze-out – No amendments

Art 16 Sell-out) – No amendments

Substance

Art 15 Squeeze-out – No amendments

Art 16 Sell-out) – No amendments

Page 23: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Implementation of the DirectiveSweden – Implementation of the Directive

Substance

Art 17 Sanctions – Mix of

- Prohibition of bid,

- Loss of voting rights,

- Fine.

Substance

Art 17 Sanctions – Mix of

- Prohibition of bid,

- Loss of voting rights,

- Fine.

Page 24: The Swedish Implementation of the Takeover Directive

Rolf Skog

Sweden – Implementation of the DirectiveSweden – Implementation of the Directive

Substance

Art 21 Transposition – July 1, 2006

Substance

Art 21 Transposition – July 1, 2006