Swedish recommendation on mandatory offers
Under the Swedish Recommendation Concerning Public Offers for the Acquisition of Shares, anyone obtaining 40% or more of the total number of votes in a company as a result of purchase, subscription, conversion or any other form of acquisition of shares in the company - either alone or together with a party to whom the buyer is closely related - must make a public offer for the acquisition of all the remaining shares issued by the target company, ie a mandatory offer. The recommendation is issued by the Swedish Industry and Commerce Stock Exchange Committee. However, the Swedish Securities Council may grant exemptions from the provisions and may also issue rulings as to how the recommendation should be interpreted.
From a recent statement by the Securities Council, it appears that when a shareholder exceeds the 40% threshold due to actions by the target company, such as a repurchase of shares and redemption of such shares, the shareholder is not obliged to make a mandatory offer. However, following such actions by the target company resulting in a shareholder owning shares corresponding to more than 40% of the votes in the company, any further acquisition of shares by the shareholder would entail an obligation for the shareholder to make a public offer for the acquisition of all the remaining shares in the target company. (Swedish Securities Council Statement 2000:9, 9 June 2000)Anders Ohlsson
Gernandt & Danielsson
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