Acting in Concert

The regulation of concerted action is one of the building blocks of the European approach towards takeover bids and plays a crucial role in the mandatory bid regime. This paper explores the concept and the implications of acting in concert in the light of the Takeover Bids Directive and its national implementing measures. In particular, it shows how the original role of acting in concert lies with its anti-elusive function in the context of the mandatory bid due to the acquisition of shares, which is the only one foreseen in the Directive. However, this function has been implemented in different ways at national level. Member States have followed different approaches on the crucial matter of shareholder coordination in relation with the exercise of voting rights. Some of them have maintained the Takeover Bids Directive approach, which links the mandatory bid rule to holding shares and acquiring control as a result of an acquisition. Others have expanded the role of acting in concert so that a bid is required regardless of an acquisition of shares, as long as a group of shareholders coalesce to adopt a common (lasting) policy with regard to the listed company. Overall, national laws implementing the Takeover Bids Directive fall short of providing sufficient legal certainty for investors. But this is all the more so when the mandatory bid rule is linked to concerted action alone, even in the absence of an acquisition, because of the risk that ordinary forms of cooperation or coordination between shareholders may trigger such an exorbitant obligation as a takeover bid for the entire share capital. The low level of harmonization across the EU contributes to limiting investor protection by making shareholder coordination more difficult-a paradoxical effect if one considers the original purpose of the mandatory bid rule and of other recent European company law initiatives-and risk discouraging crossborder investments.