Takeover Bids Directive

Regulations entitled European Communities (Takeover Bids (Directive 2004/25/EC)) Regulations 2006 (S.I. No. 255 of 2006) came into effect on 20 May 2006. These regulations are intended to give effect to Directive 2004/25/EC of the European Parliament and of the Council on Takeover Bids, which was formally adopted on 21 April 2004.

The primary purpose of EU action in this area is to set down certain general principles and minimum requirements which would govern takeover procedures in the EU with a view to giving adequate protection to minority shareholders across the EU in takeover situations and facilitating corporate restructuring. This Directive provides for minimum EU rules concerning the regulation of takeovers of ‘listed’ companies whose shares are traded on a regulated market. It is one of the key measures adopted in the EU as part of the Financial Services Action Plan (FSAP). It aims to strengthen the Single Market in financial services by facilitating cross-border restructuring and enhancing minority shareholder protection. Given the differences existing between legal systems in the Member States, the Council decided to limit this Directive to a framework of certain common principles and a limited number of general requirements which Member States will be required to respect through detailed implementing rules.

The Regulations designate the Irish Takeover Panel as the supervisory authority for purposes of the Directive. The Panel has been operating domestically in such a supervisory capacity since 1997 on foot of its statutory establishment in the role by virtue of the Irish Takeover Panel Act 1997.