EC takeover directive bid gives UK cause for concern

The European Commission (EC) has set up a high-level group of company law experts to relaunch a bid for an EU takeover directive.

Preliminary recommendations will be made by the end of the year for a new directive. It will replace legislation that was scrapped in July after failing to gain the approval of the European Parliament.
The new law group's chairman is Professor Jaap Winter, legal adviser to Unilever in the Netherlands. Also on the six-member panel is Jonathan Rickford, consultant to the UK Department of Trade and Industry.
The drawing up of a new statutory takeover directive is regarded with some nervousness in the UK, where its need has always been questioned.
Michael Shaw, a partner in the corporate M&A division of Herbert Smith, believes that the self-regulatory approach of the UK's Takeover Panel, which allows great flexibility and speed of response, could be endangered if it has to go onto a statutory footing.
Shaw, who served for two years on the Takeover Panel, said that the EC would probably want to resurrect in some form the two most controversial elements of its original proposal – banning 'poison pill' tactics and extending worker consultation. “My guess is that this is not a good thing for the UK,” he said.
The original directive would not have created a level playing field, he said, because it allowed “far too much scope for the member states to pick and choose and to have different thresholds”.