THE BNR AND THE IMPLEMENTATION OF THE TOD

PAUL DAVIESAllen & Overy Professor of Corporate

Law, University of Oxford

Davies, Paul L., Schuster, Edmund-Philippand Van de Walle de Ghelcke, Emilie, The Takeover Directive as a Protectionist Tool? (February 17, 2010). ECGI - Law Working Paper No. 141/2010. Available at SSRN: http://ssrn.com/abstract=1554616

BNR:MEMBER STATE CHOICES

BNR: COMPANY CHOICES

COUNTRIES INTRODUCING MANDATORY BNR WITH NO RECIPROCITY

CYPRUSFINLANDLATVIAMALTA

ROMANIA

COUNTRIES REMOVING PREVIOUSLY MANDATORY BNR

ITALY

HUNGARY

COUNTRIES INTRODUCING RECIPROCITY EXCEPTION TO EXISTING MANDATORY BNR

FRANCE

ITALY

SLOVENIA

SPAIN

PORTUGAL

COUNTRY BNR SCORE BEFORE BNR SCORE AFTER COMMISSION CHALLENGE

AVERSE ECJ DECISION

Austria 4 4 NO

Belgium 0 0 YES C-503/99Bulgaria 4 4 NO

Cyprus 0 4 NO

Czech Republic 4 4 NO

Denmark 0 0 YES

Estonia 4 4 NO

Finland 0 4 NO

France 4 3 YES (2) C-483/99Germany 0 0 YES C-112/05

Greece 4 3 YES (2)

Hungary 4 0 YES (2)

Ireland 4 4 NO

Italy 4 2 YES (4) C-58/99; C‑326/07;C-174/04;C-463, 464/2004

Latvia 0 4 NO

Lithuania 4 4 NO

Luxembourg 0 0 YES

Malta 0 4 NO

Netherlands 0 0 YES C-282, 283/04

Poland 0 0 YES (2)

Portugal 4 3 YES (4) C-367/98

Romania 0 4 NO

Slovakia 4 4 YES

Slovenia 4 3 NO

Spain 4 3 YES (2) C-463/00;C-207/07

Sweden 4 4 NO

United Kingdom 4 4 YES C-98/01

FRANCE: CAC 40 2009

Defensive warrants Prior permission to issue shares

Resolution withdrawn

Air Liquide Bouygues Essilor Pernod Ricard Peugeot Saint Gobain Veolia Environnement

Dexia EADS LVMH Sanofi-AventisBouygues DexiaPeugeot

CapgeminiVallourec

Sources: Herbert Smith; HQB Partners

Italy: Opt-out decisionsCompany name Market value

(in mEUR)

Fiat SpABanca Carige SpAYOOX S.p.A.Marcolin S.p.A.Tamburi Investment Partners S.p.A.AcegasAps SpAEL.EN. S.p.A.Mondo Home Entertainment SpAMeridie S.p.A.

9 companies, total market capitalisation

8,232.27 2,659.62

510.23 273.41 201.81 189.68

52.88 10.82

7.00

12,137.70

Sources: Company filings, Borsa Italiana

Reform Proposal• Make BNR the default subject to a periodic

opt-out decision by ordinary majority (Italy)• Remove MSS from decision-making process• Default in favour of those less well able to

act• But not mandatory where shareholders

believe company will operate better without a BNR in place

• Apply to BTR?