CNMV updates Q&A on takeover bids

On February 10, the CNMV updated the questions and answers (Q&A) document containing some interpretative criteria on Spanish takeover bid regulation.

The Q&A includes three new criteria regarding (i) the possibility of accelerated stakebuilding in the framework of a takeover bid by a non-bidder third party; (ii) the information to be included in the report of the target company’s board of directors on the shareholders represented on its board; and (iii) the possibility for bidders to acquire shares outside the bid in a partial takeover bid.

Regarding the first issue, the CNMV considers that any action that conveys to the market the message that an investor or shareholder other than the offeror is willing to purchase shares of the target company under certain conditions could constitute a competing bidding process—and therefore be subject to Royal Decree 1066/2007 (the “Takeover Bid RD”).

Some examples of this could be accelerated stakebuilding, block purchases, or any indication to the market, with greater or lesser formality, that the third party is willing to purchase a certain amount of shares at a specific price.

Therefore, whoever intends to acquire shares of the target company must either submit a competing offer under the applicable regime or opt for an ordinary transaction under current market conditions and prices, subject to applicable contracting regulations.

In relation to the second question, the CNMV interprets article 24(1) of the Takeover Bid RD in the sense that the directors’ report should include the shares directly or indirectly held by the shareholders who appointed the proprietary directors, together with a reasoned opinion on the bid and their intention to accept it or not.

In this respect, the CNMV recalls that the obligations of the target company and its directors are independent of the requirement that these directors abstain from attending and participating in the board meetings of the company they represent.

Finally, regarding the third and last question, the CNMV interprets that the acquisition of shares by the offeror outside a partial takeover bid (i.e., for a smaller number of shares than the total),[1] would modify the maximum interest under the partial takeover bid authorization—and therefore the information contained in the prospectus approved by the CNMV. Accordingly, any acquisition that the offeror intends to carry out, outside the partial takeover bid, is considered subject to the rules applicable to the amendment of bid specifications and must be channeled through that bid.

The CNMV expressly reserves the possibility of reconsidering the content of the Q&A or departing from it when exercising its supervisory functions, taking into account the specific circumstances of each case.