The Finnish takeover regime, with its unusually high threshold
of two-thirds for mandatory bids, has for a long time stood out as
an exception from the takeover regimes of other European
jurisdictions. In connection with the upcoming implementation of
the EU Takeover Directive, Finland is lowering the mandatory bid
threshold and modernizing its current regime.
In May 2005, a working group appointed by the Ministry of
Finance published a report detailing amendments to Finnish takeover
legislation. The proposal includes the following amendments:
The threshold for a mandatory bid would be lowered to 30% of the
total voting participation of a listed company. A second threshold
of 50% would apply to shareholders holding more than 30% of the
total voting participation.
New rules on the pricing of mandatory bids would be introduced.
Currently, the mandatory offer price is the fair market price based
on the historic performance of the shares. Under the proposed rules
the fair market price would be the price paid by the bidder for the
same shares in the six months before the offer. This would also
apply to a voluntary bid for all shares and other securities
entitling its holder to shares in a listed company. Pricing of
voluntary bids in situations where the bidder does not have
previous shareholding in the target company would not be
An express obligation would be introduced for the board of the
target company to make public its opinion on the bid and the
reasons for its opinion.
An express obligation would be introduced for the bidder to
announce a bid only after ensuring that it can fulfil any cash
consideration, if such is offered, and after taking all reasonable
measures to secure the implementation of any other type of
Finland would exercise the option conferred by the Takeover
Directive not to require Finnish companies to comply with the
Directive's so-called breakthrough rules. A self-regulatory
supervisory body with powers to issue guidelines on corporate
conduct based on the Takeover Directive would be set up with the
Finnish Central Chamber of Commerce.
Although not required by the Takeover Directive, rules on the
effects of a competing bid would be introduced. The original bidder
could react to the competing bid by extending the offer period or
amending the terms of the offer. A shareholder could withdraw the
acceptance of a bid if a competing bid is announced during the
Tarja Wist and Samuel Isaksson