CONSOB launches a public consultation on its hypotheses of exemption from the declaration of intent
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Article 120, paragraph 4-bis of the Consolidated Law on Finance (TUF) provides that anyone who purchases a stake in quoted issuers equal or above the thresholds of 10%, 20% and 25% of the relevant share capital in listed companies shall state the objectives she intends to pursue in the following six months. The purpose of this statement is to improve the degree of market transparency and facilitate the circulation of information to ensure that all those involved in the above transaction can make more informed decisions.
The Italian Companies and Exchange Commission (CONSOB), according to the said paragraph 4 bis, has determined in which cases a purchaser shall not issue the above declaration of intent. Its initiative was open to public consultations until the 17 July that was the deadline for submitting any observations.
First, the declaration of intent shall not be released in the following cases where according to the Consob Regulation n. 11971/1999 (Regulation) there is no obligation to promote a public offer to buy:
a) purchase of participation in companies where a shareholder, or other shareholders jointly, have the majority of voting rights exercisable at ordinary shareholders’ meetings (article 49, paragraph 1, letter a). The rationale for this exemption, according to CONSOB, is that the purchase cannot lead to any change in control since the corporate takeover necessarily requires the consent of the controlling shareholder;
b) purchase of intercompany participation (article 49, paragraph 1, letter c) that is when the participation is acquired following the transfer between companies in which the same subject or the same subjects have the majority of voting rights exercisable at ordinary shareholders’ meetings. These majority may be held jointly and / or indirectly through a subsidiary in accordance with the ‘Article 2359, paragraph 1, number 1) of the Italian Civil Code. The purchase of intercompany participation is also integrated when the participation is acquired following a transfer between one of these companies and these subjects. In all these cases the acquisition of stakes is not in the strict sense a scaling since significant shareholdings link the companies and the subjects;
c) exceeding the thresholds determined by the exercise of option, subscription or conversion rights originally due (article 49, paragraph 1, letter d). According to CONSOB, the buyer shall not declare his intentions since the transaction would take place independently of his will;
d) purchases resulting from inheritance (article 49, paragraph 1, letter h), as unforeseeable events.
In addition, CONSOB has specified that the declaration of intent shall not be communicated when shares are purchased for specific reasons and within certain limits, such as in the context of set-off and liquidation involving the same actions (119-bis, paragraph 3, letter a) Regulation) or when custody services are provided (119-bis, paragraph 3, letter b Regulation).
The declaration of intent shall not be made when the exceeding of the relevant threshold according to which the public offer to buy becomes mandatory is determined by a fact put in place by a third party and not easily predictable such as the loss or renunciation of the increased vote by third-party shareholders.
Furthermore, asset managers who purchase certain types of investments funds shall be exempted from the declaration in question. The reason for this favourable regime seems to depend on the fact that these parties hold purely financial investments and that, pursuant to sector regulations, they can invest in shares of listed companies within the limit of 10% of the issuer’s capital.
Finally, the declaration of intent according to the CONSOB shall not be issued in cases where the purchase of shares is carried out as part of a public offer to buy or exchange offer already communicated to the market since the information requirements required by the article 120, paragraph 4 bis, of the TUF must be deemed to be absorbed by those that must be put in place for the said offer.