Exclusion of US-holders in cross-border takeover bids and the principle of equality in tender offers

Federico M. Mucciarelli ()

Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) from Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi"

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 (search for similar items in EconPapers)
JEL-codes: K22 K33 (search for similar items in EconPapers)
Pages: pages 12
Date: 2009-05
References: Add references at CitEc
Citations: View citations in EconPapers (28)

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