Defence from ‘anglo-saxon capitalism’ crafted
PARIS, Feb 17, 2006 (AFP) - French plans to give French companies extra defences against hostile takeover attacks will have "a dissuasive effect" on predators, French Economy and Finance Minister Thierry Breton said on Friday.
He told French newspaper Le Figaro that an amendment to legislation proposed by the centre-right government would help shield French companies from unsolicited bids.
Breton, speaking against a background of French objections to a hostile bid by Mittal Steel for Arcelor, said: “These measures will certainly have a dissuasive effect against a certain form of takeover offer, those that are totally hostile and undertaken without prior consultation.
“Before making an offer for a company benefiting from the measures, the predator would be strongly encouraged to enter into dialogue with it (the target company), to make the offer as friendly as possible.
“My only aim is to offer French companies the same defensive mechanisms as anglo-saxon companies. Nothing more, nothing less,” he said
A second reading of a new law on takeovers is to take place in the French Senate on February 21. The amendment for hostile bids, if passed, would allow companies to issue equity warrants in the event of a hostile bid, shoring up their capital and making a takeover more expensive for the predator company.
The issue of hostile takeover bids in France has been forced into the spotlight by the unsolicited bid by Mittal Steel for European steel giant Arcelor.
Hostile takeover bids are often portrayed in France as an unwelcome and aggressive feature of “anglo-saxon” capitalism.
Breton, while being careful not to condemn the hostile bid for Arcelor outright, has deplored the lack of dialogue between the two companies and the lack of consultation with the government.
Breton insisted to Le Figaro that the amendment was not linked to the Mittal-Arcelor takeover tussle and had been drafted “long before Mittal Steel launched its offer on Arcelor”.
Breton said on Thursday that he backed “economic patriotism” faced with hostile takeover bids such as the one by Mittal Steel for steel rival Arcelor, which has rankled European nations.
“What I like in economic patriotism is the word ‘patriotism’”, Breton said in an interview on CNN television.
“There’s nothing wrong in the 21st century to serve your country or to serve your continent. Nothing wrong. When you have this kind of deal, when a state has some interest, he has to be vocal — and everyone, all players, have to get used to it.
“At the end, shareholders will decide. But shareholders understand today, in the 21st century, in a global economy, you’d better take care of all stakeholders, and if you see that some stakeholders are not happy with what happens, you may be afraid for your personal investment. This is called 21st century.”
In January, the Netherlands-based Mittal Steel sprang an 18.6-billion-euro hostile takeover offer for the European group Arcelor in an attempt to create a sector giant that would control about 10 percent of the global market.
France has been one of the most vocal opponents of the bid from the giant whose chief executive and controlling shareholder of Mittal Steel is Indian billionaire Lakshmi Mittal.
Subject: French news