The International Comparative Legal Guide to:

A practical cross-border insight into mergers and acquisitions

Published by Global Legal Group, with contributions from:

10th Edition

Mergers & Acquisitions 2016

ICLGAabø-Evensen & Co AdvokatfirmaAbenry & Company, AdvocatesAli Budiardjo, Nugroho, ReksodiputroAllensAstreaBär & Karrer AGBBABech-BruunConcern Dialog Law FirmCMS Reich-Rohrwig HainzCravath, Swaine & Moore LLPDebarliev, Dameski & Kelesoska Attorneys at LawDemarest AdvogadosDillon EustaceDittmar & IndreniusE & G Economides LLCENGORU, MUTEBI ADVOCATESFerraiuoli LLC

Gjika & AssociatesGuevara & Gutiérrez S.C. – Servicios LegalesGuzmán ArizaHerbert Smith Freehills LLPHouthoff BurumaKosta LegalLendvai PartnersMacchi di Cellere GangemiMaples and CalderMatouk BassiounyMJM LimitedMoravčević Vojnović i Partneri in cooperation with SchoenherrNader, Hayaux & GoebelNishimura & AsahiPachiu & AssociatesPen & PaperPeña Mancero Abogados

Roca Junyent SLPRutsaert LegalSchoenherrSevergnini, Robiola, Grinberg & TombeurSIGNUM Law FirmSkadden, Arps, Slate, Meagher & Flom LLPSlaughter and MaySysouev, Bondar, KhrapoutskiSZA Schilling, Zutt & AnschützTürkoğlu & Çelepçi in cooperation with SchoenherrUdo Udoma & Belo-OsagieVilley Girard GrolleaudWachtell, Lipton, Rosen & KatzWBW Weremczuk Bobeł & Partners Attorneys at LawWH PartnersZhong Lun Law Firm

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DisclaimerThis publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice.Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication.This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations.

Further copies of this book and others in the series can be ordered from the publisher. Please call +44 20 7367 0720

Continued Overleaf

The International Comparative Legal Guide to: Mergers & Acquisitions 2016

General Chapters:

Country Question and Answer Chapters:

1 Divergence / A Game of Two Halves? – Michael Hatchard & Scott Hopkins, Skadden, Arps, Slate, Meagher & Flom (UK) LLP 1

2 Takeover Defences in Europe – The Debate on Board Passivity is Moot – Scott V. Simpson & Lorenzo Corte, Skadden, Arps, Slate, Meagher & Flom (UK) LLP 4

3 Bridging the Value Gap in 2016 – Alex Kay & Caroline Rae, Herbert Smith Freehills LLP 6

4 Current Developments in the Roles and Responsibilities of Financial Advisers in Public M&A Transactions – Richard Hall & Gary A. Bornstein, Cravath, Swaine & Moore LLP 11

5 The Nancy Reagan Defence in 2015: Can a Board Still Just Say No? – Adam O. Emmerich & Trevor S. Norwitz, Wachtell, Lipton, Rosen & Katz 16

6 Albania Gjika & Associates: Gjergji Gjika & Evis Jani 207 Argentina Severgnini, Robiola, Grinberg & Tombeur: Carlos María Tombeur &

Matías Grinberg 278 Armenia Concern Dialog Law Firm: Narine Beglaryan & Yuri Melik-Ohanjanyan 339 Australia Allens: Vijay Cugati 3810 Austria Schoenherr: Christian Herbst & Sascha Hödl 4511 Belarus Sysouev, Bondar, Khrapoutski: Alexander Bondar & Elena Selivanova 5512 Belgium Astrea: Steven De Schrijver & Jeroen Mues 6213 Bermuda MJM Limited: Peter Martin & Brian Holdipp 7114 Bolivia Guevara & Gutiérrez S.C. – Servicios Legales: Jorge Luis Inchauste 7815 Bosnia & Herzegovina CMS Reich-Rohrwig Hainz: Nedžida Salihović-Whalen 8316 Brazil Demarest Advogados: Gabriel Ricardo Kuznietz &

Thiago Giantomassi Medeiros 9217 British Virgin Islands Maples and Calder: Richard May & Matthew Gilbert 10118 Bulgaria Schoenherr: Ilko Stoyanov & Katerina Kaloyanova 10719 Cayman Islands Maples and Calder: Nick Evans & Suzanne Correy 11520 China Zhong Lun Law Firm: Lefan Gong 12121 Colombia Peña Mancero Abogados: Gabriela Mancero 12822 Cyprus E & G Economides LLC: Marinella Kilikitas & George Economides 13623 Denmark Bech-Bruun: Steen Jensen & David Moalem 14324 Dominican Republic Guzmán Ariza: Fabio J. Guzmán-Saladín 14925 Egypt Matouk Bassiouny: Omar S. Bassiouny & Malak Habashi 15526 Finland Dittmar & Indrenius: Anders Carlberg & Jan Ollila 16027 France Villey Girard Grolleaud: Frédéric Grillier & Daniel Villey 16728 Germany SZA Schilling, Zutt & Anschütz: Dr. Marc Löbbe &

Dr. Stephan Harbarth, LL.M. (Yale) 17329 Hungary Lendvai Partners: András Lendvai & Dr. Gergely Horváth 18030 Iceland BBA: Baldvin Björn Haraldsson & Höskuldur Eiríksson 18631 Indonesia Ali Budiardjo, Nugroho, Reksodiputro: Theodoor Bakker &

Herry Nuryanto Kurniawan 19332 Ireland Dillon Eustace: Lorcan Tiernan & Adrian Benson 20033 Italy Macchi di Cellere Gangemi: Claudio Visco & Stefano Macchi di Cellere 20734 Japan Nishimura & Asahi: Masakazu Iwakura & Tomohiro Takagi 21535 Kazakhstan SIGNUM Law Firm: Liza Zhumakhmetova & Gaukhar Kudaibergenova 22436 Luxembourg Rutsaert Legal: Quentin Rutsaert 23037 Macedonia Debarliev, Dameski & Kelesoska Attorneys at Law:

Emilija Kelesoska Sholjakovska & Ljupco Cvetkovski 23638 Malta WH Partners: Ruth Galea & Graziella Grech 24339 Mexico Nader, Hayaux & Goebel: Yves Hayaux-du-Tilly Laborde &

Eduardo Villanueva Ortíz 24940 Montenegro Moravčević Vojnović i Partneri in cooperation with Schoenherr:

Slaven Moravčević & Miloš Laković 255

Contributing EditorMichael Hatchard, Skadden, Arps, Slate, Meagher & Flom (UK) LLP

Head of Business DevelopmentDror Levy

Sales DirectorFlorjan Osmani

Account DirectorsOliver Smith, Rory Smith

Senior Account ManagerMaria Lopez

Sales Support ManagerToni Hayward

Sub EditorHannah Yip

Senior EditorSuzie Levy

Group Consulting EditorAlan Falach

Group PublisherRichard Firth

Published byGlobal Legal Group Ltd.59 Tanner StreetLondon SE1 3PL, UKTel: +44 20 7367 0720Fax: +44 20 7407 5255Email: info@glgroup.co.ukURL: www.glgroup.co.uk

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Printed byAshford Colour Press Ltd.February 2016

Copyright © 2016Global Legal Group Ltd.All rights reservedNo photocopying

ISBN 978-1-910083-83-3ISSN 1752-3362

Strategic Partners

EDITORIAL

Welcome to the tenth edition of The International Comparative Legal Guide to: Mergers & Acquisitions.This guide provides corporate counsel and international practitioners with a comprehensive worldwide legal analysis of the laws and regulations of mergers and acquisitions.It is divided into two main sections:Five general chapters. These chapters are designed to provide readers with an overview of key issues affecting mergers and acquisitions, particularly from the perspective of a multi-jurisdictional transaction.Country question and answer chapters. These provide a broad overview of common issues in mergers and acquisitions in 54 jurisdictions.All chapters are written by leading mergers and acquisitions lawyers and industry specialists and we are extremely grateful for their excellent contributions.Special thanks are reserved for the contributing editor Michael Hatchard of Skadden, Arps, Slate, Meagher & Flom (UK) LLP for his invaluable assistance.Global Legal Group hopes that you find this guide practical and interesting.The International Comparative Legal Guide series is also available online at www.iclg.co.uk.

Alan Falach LL.M. Group Consulting Editor Global Legal Group Alan.Falach@glgroup.co.uk

The International Comparative Legal Guide to: Mergers & Acquisitions 2016

Country Question and Answer Chapters: 41 Netherlands Houthoff Buruma: Alexander J. Kaarls & Willem J.T. Liedenbaum 26242 Nigeria Udo Udoma & Belo-Osagie: Yinka Edu & Ekundayo Onajobi 27043 Norway Aabø-Evensen & Co Advokatfirma: Ole Kristian Aabø-Evensen &

Harald Blaauw 27844 Poland WBW Weremczuk Bobeł & Partners Attorneys at Law:

Łukasz Bobeł & Nastazja Lisek 29345 Puerto Rico Ferraiuoli LLC: Fernando J. Rovira-Rullán & Yarot T. Lafontaine-Torres 30046 Romania Pachiu & Associates: Ioana Iovanesc & Alexandru Lefter 30747 Russia Pen & Paper: Stanislav Danilov 31548 Serbia Moravčević Vojnović i Partneri in cooperation with Schoenherr:

Matija Vojnović & Luka Lopičić 32149 Slovakia Schoenherr: Stanislav Kovár & Peter Devínsky 32950 Slovenia Schoenherr: Vid Kobe & Marko Prušnik 33651 Spain Roca Junyent SLP: Natalia Martí & Xavier Costa 34652 Switzerland Bär & Karrer AG: Dr. Mariel Hoch & Dr. Dieter Dubs 35653 Tanzania Abenry & Company, Advocates: Lucy Sondo & Francis Ramadhani 36454 Turkey Türkoğlu & Çelepçi in cooperation with Schoenherr:

Levent Çelepçi & Bürke Şerbetçi 37255 Uganda ENGORU, MUTEBI ADVOCATES: Robert Apenya &

Arnold Lule Sekiwano 37856 Ukraine CMS Reich-Rohrwig Hainz: Maria Orlyk & Kateryna Soroka 38457 United Kingdom Slaughter and May: William Underhill 39058 USA Skadden, Arps, Slate, Meagher & Flom LLP:

Ann Beth Stebbins & Thomas H. Kennedy 39759 Uzbekistan Kosta Legal: Nail Hassanov & Maxim Dogonkin 414

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Chapter 33

Macchi di Cellere Gangemi

Claudio Visco

Stefano Macchi di Cellere

Italy

With respect to Italian public M&A, the type of target companies most frequently encountered are listed S.p.A.s whose shares are admitted to trading on a EU Regulated Market.The juridical nature and type of companies involved in takeovers and mergers impact on the provisions applicable to the transaction at stake. Indeed, while the ICC provisions apply in general to the acquisition of all types of Italian private companies, Italian public companies with stocks listed on a EU Regulated Market are also subject to the provisions of the TUF and other specific rules relating to takeovers of Italian joint stock listed companies.A particular kind of listed small to medium-sized enterprises (“SMEs”) are subject to different rules than those standard under the TUF, including different thresholds triggering an obligation to notify, or imposing the obligation to launch a mandatory tender offer.

1.3 Are there special rules for foreign buyers?

Law No. 56/2012 has introduced the protection of Italian national interest in relation to investments made by non-EU entities into Italian companies, whether these are listed or not, which are operating in strategic sectors, such as defence, infrastructures, energy, transport, and media.In particular, non-EU entities acquiring a controlling shareholding in companies operating in the energy, transport and media sectors must notify the acquisition to the Italian government within 10 days. In order to assess whether a shareholding is a controlling one, possible shareholding agreements entered into among shareholders must also be taken into account. Before the notification is made and during the following 15 days after the notification, the voting rights pertaining to the shareholding are suspended. The duty to notify the Italian government applies regardless of the circumstance that the target company is listed or not on a regulated market and is in addition and independent from the duty to notify CONSOB and the company (which applies whenever the target company is listed on a regulated market and the applicable thresholds under the TUF are met). A more stringent duty to notify applies in relation to companies operating in the defence sector. Any entity acquiring a shareholding in a company operating in the defence sector shall notify the acquisition within 10 days to the Italian Government Council or to the Italian Ministry of Economy and Finance, depending on the entity controlling the target company. Before the notification is made and during the following 15 days after the notification, the voting rights pertaining to the shareholding are suspended. If the

1 Relevant Authorities and Legislation

1.1 What regulates M&A?

The Italian legal framework governing takeovers involving public companies mainly consists of the following sources of law and regulation:■ the Italian Civil Code (“ICC”);■ Legislative Decree No. 58/1998, i.e. the Unified Financial

Act, “TUF” (Testo unico delle disposizioni in materia di intermediazione finanziaria);

■ the regulations issued by the National Commission for Companies and Stock Exchange, “CONSOB” (Commissione Nazionale per le Società e la Borsa) and, in particular, CONSOB Issuers’ Regulation No. 11971/1999, the “Regulation” (Regolamento Emittenti); and

■ the rules and regulations issued by Borsa Italiana S.p.A. (i.e. the company organising and managing the Italian securities market on the Milan Stock Exchange and the companies listed therein).

In particular, with regard to takeovers carried out through mergers, applicable provisions are set forth by ICC’s Articles 2501 through 2505 and, with respect to mergers among EU companies in different Member States, also by Legislative Decree No. 108/2008, which implements European Directive 2005/56/CE on cross-border mergers.Under specific circumstances (mainly dictated by the industry and nature of the business carried out by the companies involved in the transaction), Italian mergers and acquisitions may be subject to the supervision or authorisation of other Italian authorities, such as: the Italian Competition Authority, “AGCM” (Autorità Garante della Concorrenza e del Mercato); the Italian Insurance Supervisory Authority, “IVASS” (Istituto per la Vigilanza sulle Assicurazioni); the Bank of Italy, which supervises the activities of banks and financial intermediaries; the Italian Electronic Communications and Media Authority, “AGCOM” (Autorità per le Garanzie nelle Comunicazioni); and the European Central Bank.

1.2 Are there different rules for different types of company?

The ICC provides for several types of companies. The most common targets of acquisition transactions in private M&A are limited liability companies, “S.r.l.” (Società a responsabilità limitata) and private joint stock companies, “S.p.A.” (Società per Azioni).

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2.3 How long does it take?

The timeline of a public M&A transaction depends on its structure, the form of consideration and whether it is friendly or hostile. Extensions may apply depending on the type of regulatory approvals that the transaction may require.In the case of mandatory takeovers concerning 100% of the shares with voting right in the listed target, the offer must be open for a minimum of 15 to a maximum of 25 ‘trading days’. Any other offer must be open for a minimum of 15 to a maximum of 40 trading days, although CONSOB has the power to extend the acceptance period by up to 55 trading days. Moreover, the acceptance period could be further extended if a competing bid is also launched.The timeline for a merger of a listed company is generally longer, considering that it preliminarily requires that the board of directors and the shareholders’ meeting of all the companies involved approve the merger and the merger documents, which must also be filed with CONSOB for its review. All the merger documents must be deposited at the company registered office (or published on the company’s website) at least 30 days prior to the date of the extraordinary shareholders’ meeting called to vote the merger. Once the extraordinary shareholders’ meetings of the companies involved approve the merger, the approving resolutions must be deposited with the Registry of Companies (“Registro delle Imprese”). Only after 60 days from the deposit can the merger be finally executed before a notary public. A copy of the deed of the merger must be transmitted to CONSOB within 10 days from the filing of the deed of the merger in the Registry of Companies. The company deriving from the merger must also transmit to CONSOB a copy of the amended by-laws within 30 days from their filing with the Registry of Companies.

2.4 What are the main hurdles?

Cash Tender Offers: A preliminary condition to launch a tender offer is an agreement in principle with the main shareholders and the management of the target company. Once a decision to launch an offer is taken, the main hurdle is the achievement of any conditions, regulatory approval and expiration of any antitrust pre-merger control waiting period. In addition, considering that, generally, an offer is financed in full or in part through recourse to third-party financing, before an offer is actually launched, the bidder must also have obtained the approval of the banks providing for the financing.Equity Tender Offers: Since in an equity tender offer the consideration is represented by an equity swap, prior to launching the offer, the bidder must have obtained all the required resolutions and authorisations of the shareholders’ meeting to issue the equity swap.Mergers: The main hurdles regarding mergers are the complexity of the process to prepare the merger documents and the fact that a merger requires the involvement of financial and accounting experts to confirm, among others, the fairness of the exchange rate. In addition, the merger has to be approved by the extraordinary shareholders’ meeting.

2.5 How much flexibility is there over deal terms and price?

In the case of a voluntary cash or equity swap tender offer, the bidder is, in principle, free to set the price.

target company protected by national interest is listed on a EU Regulated Market, a duty to notify the Italian Government Council or the Italian Ministry of Economy and Finance applies whenever one of the following thresholds are exceeded: 2%; 3%; 5%; 10%; 15%; 20%; and 25%. The duty to notify the Italian Government Council and Italian Ministry of Economy and Finance is in addition to the duty to notify CONSOB when the target company is listed on a EU Regulated Market and the given relevant thresholds are met (see question 5.3 below).Non-EU entities may acquire shareholdings in the above companies provided that there is reciprocity between Italy and the non-EU entity’s home country, and in compliance with the international conventions entered into by Italy or the EU.

1.4 Are there any special sector-related rules?

Special rules concerning mergers and acquisitions apply with respect to the following companies:■ financial institutions, in which cases the Bank of Italy or the

European Central Bank must approve the transaction;■ insurance companies, in which case the transaction must be

approved by IVASS;■ companies operating in the telecommunications, media and

broadcasting industry; in which case, these are subject to AGCOM’s supervision;

■ companies operating in the transportation, public utilities, energy, and defence sectors; in which case, special rules may apply.

1.5 What are the principal sources of liability?

The violation of certain specific prohibitions, such as insider trading, market manipulation or dissemination of false information, may be the source of serious civil as well as criminal liability. Additional liability may arise more in general, for example in the case of misrepresentations. Specific liabilities may arise when failing to comply with the procedural rules set by the TUF and other public M&A regulations imposing, for example, authorisation requirement, disclosure obligations, the correctness of the tender offer documentation, and the truthfulness of the information given to the market.

2 Mechanics of Acquisition

2.1 What alternative means of acquisition are there?

Public M&A transactions in Italy are typically made through either: (i) takeover bids, whereby the controlling participation in a listed company is acquired by means of a cash tender offer or otherwise an equity swap offer, or a combination of the two; or (ii) a statutory direct or reverse merger.

2.2 What advisers do the parties need?

In a public M&A transaction, the parties usually retain legal and financial advisers, accountants and public relation consultants. In certain instances, an independent expert may be appointed to issue a fairness opinion as to the financial terms of the offer.

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2.9 Are there any limits on agreeing terms with employees?

No particular limit applies. If the bidder reaches an agreement with the employees, then the terms of such an agreement must be described in the tender offer document.

2.10 What role do employees, pension trustees and other stakeholders play?

The tender offer document must be communicated to the employees’ representatives of both the bidder and target company (or to the employees themselves, in cases where there are no such employees’ representatives), and it must contain detailed information on the bidder plans relating to the job conditions of the target employees.

2.11 What documentation is needed?

The main documentation to be submitted in public takeover bids comprises, inter alia: (i) the bidder’s announcement (to be filed with CONSOB and which discloses the bidder’s intention to promote the offer); (ii) the bidder’s offer document; (iii) the bidder’s guarantees for the payment of the consideration; (iv) the target’s statement, which includes all information needed in order to analyse the offer, an evaluation concerning the offer made by the target’s board of directors, any decision to call the shareholders’ meeting of the target company in order to approve any defensive measure, and the indication of the potential effects of the offer on the target interests, with special reference to employees’ rights; as well as (v) a statement of the target company employees’ representatives – if appointed – analysing the takeover effects on the target company.The main documentation in a merger comprises, inter alia: (i) the merger plan (prepared by the board of directors and including, among others, the exchange rate for the merger); (ii) the report concerning the merger as set forth by the board of directors (indicating the reasons that justify the merger from a legal and economical point of view); (iii) the fairness opinion of the financial experts appointed by each company involved to confirm the exchange rate (which shall be also confirmed by an expert appointed by the Chairman of the Court where each of the companies involved has its legal seat); and (iv) the various board and shareholders’ meetings resolutions approving the merger plan.

2.12 Are there any special disclosure requirements?

The offering documents must contain the main information regarding: (i) the bidder and its parent entities; (ii) the target company; (iii) the securities on which the bidder intends to launch the public tender offer; (iv) the price offered for the securities object of the offer and the overall value of the offer; (v) the rationale of the offer and the event from which the duty to launch the offer has arisen, if any; (vi) if the bidder intends to delist the securities under the offer; (vii) the conditions precedent to which the offer is subject, if any; (viii) the share participation (including long positions with the issuer shares as underlying assets) held by the bidder; (ix) any communication or authorisation required by the applicable laws and regulations; and (x) the internet website for the publication of the documents and notices related to the offer. Moreover, the bidder must make available any relevant document regarding both the bidder and the target’s accounting and financial information.

In a mandatory bid, the price to be set is the highest one paid by the bidder and the parties acting in concert with the bidder to purchase the company’s shares of the same class in the previous 12 months or, if no purchase of securities has occurred during such a period, the offer must be launched at the weighted average market price of the company’s shares of the same class in the previous 12 months or, if the company’s securities have been trading for less than 12 months, at the weighted average market price over such a shorter period of time.A mandatory bid must be made by any party who (acting alone or in concert) has purchased securities of a target company in such a manner that the same:■ increases its voting power to more than 30% of the target’s

securities (25% in certain instances in which target SMEs are involved);

■ holds more than 30%, but less than 50%, of the target’s securities and increases its voting power by more than 5% over a 12-month period;

■ does not meet certain conditions applicable to voluntary offers concerning at least 60% of each class of securities of the target; or

■ is in default of the terms and conditions allowing an exemption from the launching of a mandatory bid.

In squeeze-out takeovers (i.e. takeovers available to the bidder following a bid made for 100% of the securities of the target company, or when the bidder has acquired no less than 95% of the target securities), the price is determined in accordance with the criteria set out in the TUF and in the Regulation.

2.6 What differences are there between offering cash and other consideration?

A bidder may offer cash, existing or new shares, other securities (i.e. different types of shares, convertible bonds or warrants) or a combination of any of these. However, in the case of mandatory takeover bids, if securities offered as consideration are not admitted to trading on any EU Regulated Market, or the bidder, in the 12-month period prior to the launch of the offer, has made a cash purchase of the company securities granting at least 5% of the voting rights in the target company shareholders’ meeting, then the bidder must offer a cash payment as an alternative.In a squeeze-out procedure, the holder of the company securities has the right to require that consideration be paid fully in cash.

2.7 Do the same terms have to be offered to all shareholders?

Yes. All shareholders within the same class of shares must be treated equally, and the tender offer must be made under the same conditions to all the holders of securities to which the offer is directed. If, during the offer, the bidder purchases securities of the target at a higher price than the one offered in the tender offer, then all the shareholders adhering to the offer have the right to obtain such a higher price.

2.8 Are there obligations to purchase other classes of target securities?

The bidder is generally allowed to launch a tender offer on any of the target’s securities, without an obligation to automatically purchase other classes of securities of the target.

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3.2 Are there rules about an approach to the target?

There are no specific rules regarding a particular stance that the bidder should take to approach the target. In a friendly acquisition, a potential buyer may approach the target managers for preliminary discussions in order to get to know better the target business and decide whether to acquire the company through a merger or rather a takeover bid. However, such contacts must always comply with the rules on price-sensitive information disclosure and market abuse prohibitions.

3.3 How relevant is the target board?

Unless the target’s by-laws provide otherwise, a passivity rule applies. Therefore, in the absence of specific approvals by the shareholders, the directors of a target must abstain from taking any action that could jeopardise the objectives of the tender offer.Nevertheless, the board of directors of the target company, which must always act in the best interests of the shareholders, may influence the outcome of the tender offer; for example, by refusing to allow the bidder to conduct a due diligence exercise prior to the launch of a bid when the bidder is a competitor, or when another competing offer is expected to be launched. Moreover, the target statement prepared by the directors may include comments on the fairness of the tender offer consideration.

3.4 Does the choice affect process?

Except when the target company decides to undertake defensive measures against a hostile takeover, the choice between friendly and hostile bids does not noticeably affect the takeover process set forth under the TUF, the major difference being that, in the case of hostile takeovers, the term to start the subscription period cannot be on the same day on which the documents are published, but only after five days from the publication of the offering documents.

4 Information

4.1 What information is available to a buyer?

A friendly buyer may have gathered information on the target in preliminary contacts or may otherwise have been allowed to carry out a due diligence on the target. On the contrary, a hostile bidder is generally not allowed to conduct a due diligence and may launch a tender offer only based on publicly available information, including documents and information on file at the Registry of Companies, such as:■ notices issued by the target to the market relating to price-

sensitive information;■ the target’s annual, semi-annual and quarterly financial

statements;■ reports on the shareholders’ structure and corporate

governance;■ the target’s yearly reports on its governance and compliance; ■ the target’s by-laws and minutes of the shareholders’ meeting; ■ information on any shareholdings exceeding 2% of securities

carrying voting rights;■ documents and information on any main relevant transaction

(e.g. securities offerings, mergers, capital increases, acquisitions, sale of assets, etc.);

2.13 What are the key costs?

The key costs are the fees of the various financial, legal and accounting advisers, the possible fees of the presenting bank requested to guaranteeing payment of the consideration, and the costs that may be incurred in order to secure financing of the transaction, and the filing fee of the offer, as well as the applicable stamp duties.

2.14 What consents are needed?

All tender offer documents must be approved by CONSOB. Depending on the nature and size of the transaction, the approval of the competent supervisory authority (i.e. the European Central Bank or the Bank of Italy for financial institutions, and IVASS for insurance companies) is also required. In the case of protected sectors, other approvals may be needed prior to making a tender offer. Clearance may be required from the AGCM or the EU Commission in the case of concentrations triggering a competition pre-merger filing, or in the case of regulated industries. In the case of mergers, the shareholders’ approval is always needed to consummate the merger.

2.15 What levels of approval or acceptance are needed?

In principle, an offer is completed regardless of the percentage of shares tendered. However, if the bidder conditioned its tender offer to secure:■ the legal control of the target company: then the bidder must

seek to hold (further to the offer) a participation amounting to 50% plus one of the company’s voting rights;

■ the control in the extraordinary general meeting: then the bidder must seek to hold (further to the offer) a participation amounting to 66.6% of the voting rights; or

■ the right to delist the company and squeeze out minorities: then 95% of the company securities will be identified as the minimum threshold to be held by the bidder further to the bid.

In the case of a merger, it is prudent to ascertain in advance that the required majorities to secure a favourable vote of the merger are obtained. In certain instances, the bidder may obtain an irrevocable proxy to vote in favour of the merger.

2.16 When does cash consideration need to be committed and available?

The required consideration, whether in cash or in securities, as well as the applicable guarantees, must be available in advance of the starting of the acceptance period of the tender offer. In particular, the bidder must transmit to CONSOB all the necessary documentation relating to the setup of the guarantees within one day before the date of publication of the tender offer document.

3 Friendly or Hostile

3.1 Is there a choice?

Friendly, as well as hostile takeover bids are all admitted under the TUF, although it is not a common tactic to pursue hostile takeovers in Italy.

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object of the offer as underlying assets. Consequently, if during the offer period the bidder takes a long position (i.e. acquires derivatives under which the bidder will have an interest positively linked to the trend of the underlying asset) with securities object of the offer as underlying assets for a price higher than the offer price, then the tender offer price must be increased accordingly. In such cases, the price to be taken into account is the contractual price of the underlying securities, plus the amounts paid or received for the acquisition of the long position.

5.3 What are the disclosure triggers for shares and derivatives stakebuilding before the offer and during the offer period?

Disclosure applies to the acquisition of listed voting shares and is triggered as soon as a person becomes the owner of at least 2% of listed voting shares (or 5% in the case of shares held in SMEs). In such cases, the bidder must notify the target and CONSOB about the shareholding percentage and the number of shares acquired within five ‘trading days’ following the closing of the relevant transaction.Disclosure is mandatory, irrespective of the fact that the voting rights might be granted to, or held by, a third party, and irrespective of the fact that the voting rights might be suspended.The same disclosure obligations are triggered when the following thresholds are crossed by acquiring securities bearing voting rights in target listed companies: 5%; 10%; 15%; 20%; 25%; 30%; 50%; 66.6%; 90%; and 95%.A similar disclosure obligation is also triggered in the case of a ‘reduction’ of the participation in the listed target within the above-mentioned thresholds.In the case of ‘potential’ shareholdings, i.e. participations linked to derivatives settled physically (e.g. convertible bonds or warrants), a further duty of disclosure applies when the following thresholds are reached or exceeded: 5%; 10%; 15%; 20%; 25%; 30%; 50%; and 75%.In the case of long positions, i.e. participations linked, inter alia, to derivatives settled by cash, an additional duty of disclosure applies in the event that the follow thresholds are reached or exceeded: 5%; 20%; 30%; and 50%.It has to be noted that the above thresholds for potential shareholdings and long positions are related to the quantity of underlying securities bearing voting rights; therefore, if the quantity of underlying securities is variable, the quantity to be considered must be the highest one.Securities owned by the bidder in the listed company and already disclosed are not taken into account with regard to the thresholds relating to potential participations.The duty to disclose a long position does not apply in the event that a relevant threshold has been crossed and it has been already filed with CONSOB as an actual shareholding or a potential shareholding, provided that no other long positions are held.In the case of a tender offer, the communication to be filed by the bidder to CONSOB must contain the indication of the participation held by the bidder, as well as the ownership of any financial derivatives granting the bidder a long position on the securities of the target.Moreover, any party to a shareholders’ agreement involving more than 2% of the share capital of a listed company must disclose such circumstances to CONSOB and the issuer.

■ any shareholders’ agreements;■ details on the related party’s transactions;■ information documents on employees’ and managers’ share

option plans; and■ any financial analyst or rating agency reports.

4.2 Is negotiation confidential and is access restricted?

In principle, there is no obligation to disclose confidential negotiations. Indeed, the bidder and the target may enter into a non-disclosure agreement undertaking not to disclose the possible launch of a bid on the target until a final decision is reached.Once a decision to launch a bid is taken, this must be made public immediately by the bidder by means of a press release notice, after which the tender offer document must be filed with CONSOB within 20 days.Before the announcement of the bid, if there are leaks that generate rumours about the pending negotiations creating expectations on the market, the parties to a non-disclosure agreement generally undertake to consult immediately with CONSOB for comments on the leak. In any event, in such cases, the target and the bidder have an obligation to provide the market with a clarification and may be required to disclose privileged information relating to the status of ongoing negotiations and other information on the target and its subsidiaries.

4.3 When is an announcement required and what will become public?

Once a decision to launch a cash or equity swap offer is made, or if the bidder meets the thresholds imposing the launch of a mandatory tender offer, the bidder must inform the market and the target company pursuant to Article 102 of the TUF. At this stage, the offering documents will become public as soon as they are approved by CONSOB. Any material element of the offer, including any agreement with the target company’s directors and officers, must be fully disclosed.

4.4 What if the information is wrong or changes?

The bidder must amend any incorrect information contained in the tender offer document as soon as it becomes aware of such inaccuracies. CONSOB has the authority to suspend the bid for a period not exceeding 30 days if new facts or circumstances that have not been disclosed occur, and these may prevent the addressees from making a sound evaluation of such an offer.

5 Stakebuilding

5.1 Can shares be bought outside the offer process?

The bidder is free to buy securities of the target company outside the offer process. However, if during the offer period the bidder has bought securities for a price higher than the one set in the tender offer, according to the Regulation, the tender offer price must be increased correspondingly.

5.2 Can derivatives be bought outside the offer process?

The Regulation also applies to the purchase of derivatives (such as options, forwards, futures, swaps, etc.) that have securities as the

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7 Bidder Protection

7.1 What deal conditions are permitted and is their invocation restricted?

As a general rule, the success of a tender offer cannot be made subject to conditions that depend on the sole discretion of the bidder.However, a voluntary cash or equity swap tender offer could be subject to certain conditions precedent. Among the most frequent conditions that may be allowed, there are:■ the requirement for a minimum quantity of shares to be

tendered;■ the obtainment of all the necessary approvals from the

relevant authorities; and■ the absence of certain defensive actions by the target whose

implementation may have a negative impact on the offer, or may determine its withdrawal.

These bidder’s condition precedents must be indicated: (i) in the communication disclosing the bidder’s intention to promote the offer to be filed with CONSOB; (ii) in the offering memorandum; and (iii) in the offer adhesion form.In the case of a mandatory tender offer, by definition, the same cannot be subject to any condition.

7.2 What control does the bidder have over the target during the process?

The bidder can exercise little control over the offering process and has limited influence over the target company; on the other hand, the target’s directors must obtain shareholders’ approval before taking any action addressed at frustrating an offer.

7.3 When does control pass to the bidder?

Once the tender offer is completed and consideration settled, the target’s securities are transferred to the bidder. The bidder must then call a shareholders’ meeting of the target for the appointment of a new board of directors. In order to allow the bidder gaining control of the target, whenever – as a result of a tender offer – the bidder acquired at least 75% of the target company securities bearing voting rights in the ordinary shareholders’ meeting, the TUF provides that at the first shareholders’ meeting called to remove or appoint directors, or to amend the by-laws of the target, there cannot be enforced: ■ any statutory or contractual limitations on the target’s voting

rights; or■ any special right provided for by the target by-laws in relation

to the appointment or removal of the directors, and any by-laws’ provision attributing additional “increased” voting rights.

7.4 How can the bidder get 100% control?

Under the squeeze-out procedure, a bidder can acquire all of the voting securities of a target company, provided that he has acquired through the tender offer bid no less than 95% of the target voting

5.4 What are the limitations and consequences?

Failure to comply with disclosure duties and obligations under the TUF could result in administrative or criminal sanctions, as well as deprivation of voting rights.

6 Deal Protection

6.1 Are break fees available?

Break fees are common in merger cases and in agreements entered into between a bidder and some favourite shareholders.Break fees are not common in takeover situations, where the target undertakes to pay the bidder if the bid is not successful. In such cases, the enforceability of the clause may be under question, given that the tender offer is, in principle, addressed to the target’s shareholders, and may not necessarily be in line with the corporate interest of the target as such. Finally, any break fee should not be of such an amount that could frustrate the possibility of a competing offer being launched on the target.

6.2 Can the target agree not to shop the company or its assets?

Prior to the filing of a public bid, the target may enter into an exclusivity arrangement with a potential bidder or assume the obligation not to shop the company or its assets if the board of directors of the target believes that the bidder’s offer is in the best interest of the target company. A bidder could also include in the tender offer certain conditions requesting that the target company board, or its shareholders, must refrain from taking any action that may negatively impact the success of the offer.

6.3 Can the target agree to issue shares or sell assets?

The target company may have introduced in its by-laws defensive measures aimed at resisting hostile takeovers. However, once the tender offer is launched, and if passivity rules apply, the target company must refrain from taking actions that may negatively impact the success of a tender offer without the prior approval of its shareholders, such as issuing new shares or selling its assets.

6.4 What commitments are available to tie up a deal?

Obtaining a commitment to sell from the key shareholders of the target company would constitute an available means to tie up a deal. Alternatively, a bidder could try purchasing sufficient shares in the target company as to allow the same, either alone or in concert, exceeding the 30% threshold, which would then trigger the obligation to launch of a mandatory tender offer. Otherwise, the bidder may include conditions requesting a minimum quantity of stockholdings in the tender offer documents.

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9 Other Useful Facts

9.1 What are the major influences on the success of an acquisition?

The success of a tender offer mainly rests on the ability of the bidder to convince the shareholders of the target company to accept the offer, and in this respect, (i) the price offered, and (ii) presenting a sound business strategy for the target company, are the key factors for the success of the acquisition.A tender offer is also more likely to be successful if planned in advance and the bidder has previously reached an agreement with the target company’s main shareholders and directors and has carried out a proper information campaign on the tender offer.

9.2 What happens if it fails?

In general, should the offer fail, the bidder is free to launch a new offer on the same securities of the same target company. Nevertheless, if the bidder fails to comply with the provisions setting forth the deadline of 20 days from the communication to CONSOB of its intention to promote the offer, the offer cannot be allowed and, subsequently, the bidder is not permitted to launch a new tender offer on that particular company’s securities in the following 12 months.

10 Updates

10.1 Please provide a summary of any relevant new law or practices in M&A in your jurisdiction.

In 2014, the Italian legislator introduced: (i) the possibility for Italian companies to issue shares with increased and multiple voting rights; and (ii) the notion of SMEs relevant for the TUF. The foregoing has had an impact on Italian regulations governing, inter alia, mandatory takeover bids and the duties of disclosure applicable to large shareholdings in Italian listed companies (as described above, under question 5.3).These duties of disclosure outlined above under question 5.3 are in the process of being amended. Indeed, in 2015, both the Italian Ministry of Economy and Finance and CONSOB began consultation processes aimed at adopting laws and regulations necessary to implement in the domestic jurisdiction the new provisions of Directive 2004/109/EC (i.e. the so-called Transparency Directive), as introduced by Directive 2013/50/EU.

securities. In this case, provided that the intention to squeeze-out the minority shareholders has been declared in the offering document, within 90 days from the completion of the offer, the bidder is granted the right to purchase the remaining securities from the other shareholders.

8 Target Defences

8.1 Does the board of the target have to publicise discussions?

There is no obligation for the target’s board of directors to disclose any negotiation discussion, as long as confidentiality is maintained and no tender offer is made. In the case of leaks or peculiar movements in the target’s share price, then a public announcement may be required.

8.2 What can the target do to resist change of control?

In principle, the target could try implementing several defence measures to prevent hostile bids to be successful (e.g. crown jewel disposals, buy-back, transfer of treasury shares, issuance of free warrants, white knight search). Nevertheless, passivity rules generally apply to Italian listed companies whose securities are involved in a tender offer, so that targets should generally abstain (from the date of the notice until the end of the offer or until the offer expires) from any action that could interfere with the success of a tender offer, unless the targets’ shareholders’ meeting approve any such defensive action. Target companies must notify any resolution waiving the passivity rule to CONSOB, and to the supervisory authorities for takeover bids in member countries in which their securities are listed.With respect to foreign bidders, the passivity rules imposing the abstention from taking any action that could interfere with the accomplishment of the offer, or breakthrough provisions possibly contained in the target company’s by-laws, do not apply to takeover bids or exchange tender offers launched by entities which are not subject to such provisions or equivalent provisions in the country where the bidder’s securities are listed.

8.3 Is it a fair fight?

Ultimately, it depends mostly on the decisions taken by the target shareholders. The target company’s board of directors may resist an offer that is not viewed as being in the best interests of the company, but in order for the board to adopt any defensive measure, the approval of the majority of shareholders must be secured.

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Macchi di Cellere Gangemi Italy

Macchi di Cellere Gangemi is a European law firm which was established in 1986 and which serves clients worldwide on matters of European, Italian, French, English and international law through its affiliated offices in London, Milan, Paris, Rome, Verona, Bologna and Modena.

The firm has over 100 highly qualified lawyers providing legal advice and assistance to multinationals, major companies and public institutions. All lawyers at Macchi di Cellere Gangemi have a solid academic background and the necessary professional skills to face and solve the clients’ complex legal issues with a realistic interdisciplinary approach.

Macchi di Cellere Gangemi provides legal advice and assistance in a comprehensive array of areas of law, such as Antitrust & Competition, Arbitration, Banking & Finance, Corporate & Commercial, Intellectual Property, Labour & Employment, Litigation, Mergers & Acquisitions, as well as Restructuring & Reorganisation and Tax.

The firm has extensive experience in several business activities, with its global services expanding to different industry sectors, including Capital Markets, Communications & Media, Energy, Environment, Fashion & Leisure, Information Technology, Insurance, Life Science, Privacy & Data Protection, Private Equity, Project Finance and Real Estate.

Claudio ViscoMacchi di Cellere GangemiVia G. Cuboni 12Rome 00197Italy

Tel: +39 06 362 141Email: c.visco@macchi-gangemi.comURL: www.macchi-gangemi.com

Stefano Macchi di CellereMacchi di Cellere Gangemi33 St. James’s SquareLondon, SW1Y 4JSUnited Kingdom

Tel: +44 20 3709 6000Email: s.macchi@macchi-gangemi.comURL: www.macchi-gangemi.com

Claudio Visco is the Managing Partner of Macchi di Cellere Gangemi, and his practice concentrates on banking and finance, in addition to securities matters, mergers and acquisitions, project financing, and asset-backed and structured finance. He is a member of the Board of Auditors of numerous companies.

He obtained his law degree at the University of Rome “La Sapienza”, magna cum laude, in 1981. He attended the “School of Public Administration” in Rome (1981–1982); he followed an introductory course to American Law at the Georgetown University Law School, Washington (1982), and obtained a Master of Laws (LL.M.) at the University of Michigan Law School in 1983. Admitted to the Bar in 1983, he has been a member of the International Bar Association and a member of the Policy Committee of the BIC since 2005. He is currently Vice President of the Bar Issues Commission. He is also a Chartered Accountant (Revisore Contabile). Since 1990, he has been a member of the State Bar of Michigan, International Law Section.

Stefano Macchi di Cellere is the Supervising Partner of the London office of the European law firm Macchi di Cellere Gangemi. He is a dual-qualified lawyer, Solicitor of the Senior Courts of England and Wales, and Avvocato of the Supreme Court of Cassation of Italy. Stefano Macchi di Cellere holds a Master of Laws degree from King’s College London, and is a member of the Law Society of England and Wales, International Bar Association, American Bar Association, Inter-Pacific Bar Association (former council member), alumni association of the Academy of American and International Law (former deputy secretary general) and the Italian Bar.

Stefano Macchi di Cellere’s practice focuses on Cross-border M&A, International Competition Law and technology-related strategic Litigation. He represents multinational groups, national enterprises and private equity funds in deal negotiation, due diligence process, pre-merger notification and possible second-phase proceedings, assisting with clearance acquisitions, concentrations, joint ventures and technology transactions in a wide range of industries and business sectors.

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