The Takeover Bids Directive : a critical analysis of its implementation in Malta and other EU member states

Abstract

Directive 2004/25/EC on takeover bids came into force on May 2004 and was to be implemented in all Member States by May 2006. This thesis aims to critically examine Malta’s implementation of the Directive, comparing Maltese takeover regulation to that of other Member States whilst proposing amendments to the MFSA Listing Rules. Chapter 1 sets a general introduction to the concept of takeovers, delving into issues such as the difference between mergers and takeovers and the financing of bids, before giving a brief historical background to takeover legislation in Europe. Chapter 2 goes through the long political process which led to the Takeover Directive, following which an analysis of the provisions of the Directive shall be made. The third Chapter focuses specifically on Malta’s takeover legislation. After a brief commentary on the situation prior to the implementation of the Directive, the author shall critically examine the provisions of the MFSA Listing Rules, drawing comparisons from other jurisdictions in order to highlight certain deficiencies in our legislation. The fourth Chapter lays out the way forward, in the author’s opinion, for takeover regulation in the EU. Following a brief analysis of the European Commission’s report into the application of the Takeover Directive, together with the External Study commissioned to look into the legal and economic aspects of the Directive, the author shall then point out what he believes are the main issues which need to be addressed not only by the Commission but also on a local level. The author’s main argument is in favour of lowering the mandatory bid threshold to 30% to be in line with the current trend in the EU, although this requires further amendments to the Listing Rules, which shall also be addressed in the Conclusion of this thesis.