Swedish Securities Council issues statement on mandatory bids
The Industry and Commerce Stock Exchange Committee's recommendation concerning public tender offers is compulsory when a Swedish or foreign legal or natural entity makes a public offer to the shareholders of a Swedish company, the shares of which are listed on an exchange or authorized marketplace, to transfer their shares to the buyer subject to generally stated terms and conditions. Since July 1 1999, the recommendation has also contained rules regarding the obligation, under certain conditions, to make a public offer, commonly referred to as mandatory offers.
Uncertainty has prevailed as to whether the recommendation is compulsory only when the target company's shares are listed on a Swedish exchange, or a Swedish and foreign exchange, or whether it is also compulsory in cases in which the shares are listed exclusively on a foreign exchange.
In a statement (2000:3), the Swedish Securities Council has asserted that the recommendation concerning public tender offers does not apply to offers or acquisitions in Swedish limited companies, the shares of which are exclusively listed in foreign countries. Admittedly, the council opines that there were objective reasons why the provisions of the recommendation regarding mandatory offers should be applicable, regardless of the fact that the shares were listed exclusively in foreign countries. But the council has adopted the position that the recommendation should not be applicable at all when the shares were listed exclusively in foreign countries. The reason for this was that it was difficult to interpret the recommendation in any other manner.