Short Reads

Protection of listed companies against unsolicited takeovers, prevention of unwanted influences in the telecoms sector and protection of other vital sectors: latest developments

Protection of listed companies against unsolicited takeovers, prevent

Protection of listed companies against unsolicited takeovers, prevention of unwanted influences in the telecoms sector and protection of other vital sectors: latest developments

07.08.2018 NL law

Following a recent series of (attempted) unsolicited takeovers by foreign bidders of Dutch listed companies, such as PostNL, Unilever and AkzoNobel, the protection of companies against unsolicited takeovers and the protection of vital sectors have received more attention in both the Netherlands and Europe.

In this respect, the Dutch government has published a government-coalition agreement, which describes measures that intend to shift power away from certain activist shareholders who are looking for short-term gains to shareholders and other stakeholders who have an interest in long-term value creation.

Preliminary draft legislative proposal statutory cooling-off period and obligation to register for shareholders

250-day statutory cooling-off period

The coalition agreement introduces a statutory cooling-off period of 250 days in the event of shareholder proposals for strategy changes. Listed companies facing proposals for fundamental strategy changes at their general meetings will now have the opportunity to invoke a 250-day cooling-off period, provided that this does not interfere with the principle of free movement of capital. The Minister has confirmed that this statutory cooling-off period also applies in the event of unsolicited takeover bids. During this cooling-off period, the company will be accountable for the company's strategy to the shareholders and it will need to consult all stakeholders of the company. This measure cannot be taken in combination with the company's own antitakeover measures, such as preference or priority shares. A preliminary draft of the legislative proposal has been sent to the Council of State for advice on the European-law aspects of the introduction of such a cooling-off period. The Council of State has already delivered its opinion but it has not yet been made public. The preliminary draft legislative proposal is being revised and the new version is expected to be published after the summer.

Shareholder registration

In addition, large listed companies (with an annual turnover of more than EUR 750 million) will have the opportunity to request their shareholders to register as major shareholder with the Dutch Authority for the Financial Markets if they hold more than 1% of the company's share capital. Under the current legislation, such shareholders are only required to register if they hold a minimum in a company's share capital of 3%. So far, however, it is unclear whether or not this registration for shareholders holding more than 1% will be mandatory and when this will take effect.

Legislative proposal unwanted influences in the telecoms sector

In the Netherlands, the Department of Economic Affairs has published a draft legislative proposal for consultation to amend the Dutch Telecommunications Act to prevent unsolicited acquisition or exercise of control over Dutch telecoms service providers (see our Corporate Alert of 14 March 2017). This proposal is the result of public demand for protection of the Dutch telecoms infrastructure following the attempted takeover of KPN by América Movil in 2013. It will grant the Minister of Economic Affairs the authority to prohibit the acquisition or exercise of control over legal entities and partnerships active in the Dutch telecoms sector if (i) this control leads to relevant influence in the Dutch telecoms sector and (ii) as a consequence, Dutch national security or public order is compromised.

Following consultation, the legislative proposal has been modified on a number of points, with the introduction of a reporting obligation as the most notable change. On the basis of this reporting obligation, a party that is looking to acquire a Dutch telecoms company and, as a consequence, would be able to exercise significant control in the telecoms sector, must report this in advance to the Department of Economic Affairs and Climate Policy. At this moment, it is still unclear what this reporting obligation and the other changes exactly mean. The legislative proposal has been sent to the Council of State for advice and it is expected to be introduced to the House of Representatives after the summer.

Protection of vital sectors

In the Dutch government's coalition agreement, it was announced that designated companies in certain vital sectors can only be taken over if such a takeover is explicitly approved, which may be subject to additional conditions. It is currently being investigated whether this protection regime is necessary not only for the existing list of vital sectors but also for agricultural lands and certain regional infrastructural works. In this context, the EU's draft regulation designed to protect companies of strategic importance against takeovers must be taken into account. With this draft regulation, the European Commission intends to establish a new EU framework for the screening of foreign direct investments on the grounds of security or public order in the European Union.

It was announced that first an ex ante analysis would be conducted in order to map out national security risks in respect of takeovers by foreign companies, as well as to determine whether the government's current instruments provide sufficient safeguards. Depending on the findings of the analysis, further measures may need to be taken. The analysis is still being conducted and the results were expected to be announced in mid-2018.

Team

Related news

02.04.2020 NL law
Stibbe in Amsterdam answers questions from consumers, small business foundations and NGOs about the coronavirus

Inside Stibbe - In a special Q&A (in Dutch), our Amsterdam office share their legal expertise and strive to provide answers to questions put to us by consumers, self-employed persons, enterprises large and small, foundations and NGOs as a result of the corona crisis.

Read more

27.03.2020 NL law
Certain legal aspects of the corona crisis for the Dutch construction and rental industry

Short Reads - Read in Dutch The spread of the coronavirus has developed into a severe crisis that is also affecting the construction and rental industry in the Netherlands. Catering operators and retailers are wondering (among other difficult questions) whether they can pause their rent payments while they have no or very little turnover.

Read more

31.03.2020 NL law
How to meet (Dutch) substance requirements during the COVID-19 pandemic?

Short Reads - Measures taken by multiple jurisdictions in an attempt to stop the spread of the corona virus (COVID-19) affect many people and businesses. Organizing and attending physical board meetings in the Netherlands or elsewhere may be challenging in these times and this may affect a company’s (Dutch) tax position. Below we discuss the potential impact of the measures and provide some preliminary practical guidance.

Read more

27.03.2020 NL law
Actuele ontwikkelingen rondom de AVA’s van beursvennootschappen en corona

Short Reads - Op 23 maart 2020 heeft het Nederlandse kabinet aanvullende overheidsmaatregelen genomen in het kader van de bestrijding van het coronavirus. Deze maatregelen zijn onder meer gericht op evenementen en samenkomsten. In een nieuwsbericht van het kabinet van 24 maart 2020 zijn deze maatregelen nader geduid (zie ook de Q&A die eveneens door het kabinet is gepubliceerd).

Read more

25.03.2020 NL law
Key considerations for management and owners of Dutch privately held companies in distress due to COVID-19

Short Reads - The COVID-19 pandemic has a significant and immediate adverse effect on many companies in different industries. Many PE portfolio companies are particularly vulnerable given the typical high leverage finance structure and inherent need to maintain cash flow. To meet these challenges and mitigate liability risks, management and owners may need to take clear and immediate action (and refrain from certain other actions) in the interest of all stakeholders. The following sets out some key legal guidelines for management and owners when dealing with a Dutch subsidiary in distress.

Read more

This website uses cookies. Some of these cookies are essential for the technical functioning of our website and you cannot disable these cookies if you want to read our website. We also use functional cookies to ensure the website functions properly and analytical cookies to personalise content and to analyse our traffic. You can either accept or refuse these functional and analytical cookies.

Privacy – en cookieverklaring