A rule of the Copenhagen Stock Exchange (CSE) required any shareholder who attained legal or de facto control over a listed company to offer to buy the other shareholders' shares on the same conditions that the controlling shareholder bought the shares to gain control of the company. The initial proposal for the Securities Trading Act (STA) also contained this rule, but when it was adopted by Parliament in 1995, the control necessary to trigger the requirement to make a purchase offer to other shareholders was limited to control obtained through a majority of votes in the company.
Pension funds and others are dissatisfied with this version of the rules. They want the de facto control standard re-introduced, especially after the sale by the government of its shares in Tele Danmark A/S, the Danish telecommunication company, to Ameritech. The government held a majority of shares in Tele Danmark A/S, but before the sale to Ameritech, cut its shareholding to 42% by selling some shares back to Tele Danmark A/S itself. The government then sold its 42% of Tele Danmark A/S to Ameritech, but the CSE agreed that Ameritech was under no obligation to offer to purchase other outstanding shares under the same conditions. That Ameritech's 42% shareholding in Tele Danmark A/S gave it de facto control over the company was undisputed.
In another recent transaction the CSE listed company Bilspedition sold Class A and Class B shares with differing voting rights to Stinnes AG, a German company. The CSE requested Stinnes AG provide it with information regarding the shares to be acquired because in the purchase Stinnes AG was to acquire 51.5% of the votes in Bilspedition. Stinnes AG must have informed the CSE that the voting power of the identical shareholding had been reduced to 49.9% thus avoiding the trigger for the STA-required purchase offer to other shareholders.
Institutional investors and other typical minority shareholders are certain to follow developments in this area closely in the future.
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