Lawmakers defend against hostile takeovers

17th March 2006, Comments 0 comments

PARIS, March 16, 2006 (AFP) - The French National Assembly on Thursday approved a draft law designed to help French companies defend themselves against hostile takeover bids.

PARIS, March 16, 2006 (AFP) - The French National Assembly on Thursday approved a draft law designed to help French companies defend themselves against hostile takeover bids.

The measure, which had earlier been adopted on a second reading in the French Senate, comes as French power and water group Suez is reported to be a potential takeover target for Italian electricity giant Enel.

The text approved Thursday should be the definitive version, although parliamentary sources said it could require approval from a mixed Senate-Assembly commission.

The law aims to ensure the transparency of takeover procedures.

It calls for personnel at the companies involved to be adequately informed about the transaction and increases the powers of the French market regulator, the AMF.

The law in addition would allow companies to issue equity warrants in the event of a hostile bid, enabling them to shore up their capital and making a takeover more expensive for the predator firm.

The issue of hostile takeover bids in France grabbed public attention here earlier this year following an unsolicited move by Netherlands-based Mittal Steel for European steel giant Arcelor, based in Luxembourg.

Hostile takeover bids are often portrayed in France as an unwelcome and aggressive feature of "Anglo-Saxon" capitalism.

The Arcelor board rejected Mittal's offer, which has also sparked opposition by the governments of France, Spain and Luxembourg.

Arcelor is composed of formerly national steel interests in the three countries but also has operations in Belgium.

Then in late February the government announced plans for state-controlled utility Gaz de France to acquire Suez, a move denounced in Italy as designed to foil Enel's plans to make an offer for Suez.

Copyright AFP

Subject: French news

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