engleski

Cash-Settled Derivatives and Their Role in Companies’ Takeovers

This paper deals with the role of cash-settled derivatives in the companies’ takeovers. EU capital market practice shows that they can be powerful instrument to gain or retain control in the target company. Because of abusive nature of their use—to hold them deliberately under the radar and then to create an element of surprise with the hostile takeover bid, many EU legislators upgraded their disclosure regime by adding new comprehensive “catch all” disclosure duties. In some EU states, these changes were done through “the major block of shares” disclosure duties, mostly aligned with takeover disclosure duties. Latest amendments in some jurisdictions showed that takeover disclosure duties deserve slightly modified approach. The reason was simple—if cash-settled derivatives are calculable into the control block, their adding can trigger mandatory takeover bid. If not, prospective hostile bidder could secretly build its “cash-settled stake” and “in last minute” reverses it into the voting rights resulting in loss of the takeover premium. This paper tries to approach the problem by putting emphasis on the intent of the bidder rather than on upgrading technically demanding rules on calculation.

cash-settled derivatives, company takeovers, disclosure duties, voting rights, empty voting, hidden ownership

nije evidentirano