The Italian equities market shares with many of its European counterparts a collection of companies with strong, dominant shareholders. There are real benefits to such arrangements, but some drawbacks as well. Now the Italian securities regulator Consob has stepped up its regulation to counter one of those risks – the abuse of the interests of minority shareholders in takeover bids. The move has four aims: - Stronger minority rights: The measures seek in increase minority voice during a change of ownership or control, as well as in response to regulation and financial innovation.
- Transparency and efficiency: To facilitate a market for corporate control, it has cleared up some regulatory ambiguities that got in the way of shareholder activism.
- Equal treatment: Italian investors won't get preferential treatment in the new regulations.
- Reduced compliance costs: Here the focus is on standardising documentation and making Consob's own control processes more efficient.
Among the specific measures is the demand that bids supported by "insiders", that is management or directors closely tied to a major shareholder, the view of the independent directors should be published separately, so small shareholders have better information to judge whether to support a takeover.
Source documents: The executive summary in English is a five-page pdf file. The full regulations, in the unofficial translation, runs to 31 pages.
http://www.consob.it/mainen/legal_framework/consultations/takeover_bid_regulation_2011_executive_summary.pdf
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