that would lead a dilution after the offer

With the recent publication of the new general regulation of the authority of des marchés financiers (AMF), which complements the Act of March 31, 2006, the reform of the bids is now complete. This reform changes in depth the rules of the game's defences anti-OPA and report of strength between the attacker and the target (1). Some were unsure of the scope of changes are coming, believing that whatever happens the General principles of the public, patiently cleared offers over the years by the authority of market, would prevail. But the Government, on behalf of economic patriotism, made the choice to strengthen the means of defence of the target, with a broader range of defences anti-OPA and the introduction of a principle of reciprocity. And the AMF, on the other hand, from the consequences of these changes for the initiator by developing the principle of irrevocability of a bid.

The most iconic illustration of these changes is the introduction by the Act, the famous offer vouchers (or BSA Breton), which had yet banned by the AMF, specifically on behalf of the General principles of law of public tenders. In the case of the BSA plavix in 2004, AMF had indeed considered that they led to a unilateral inflation, because of the target, the price offered by the initiator. Now, the target can currently offer free give shareholders the right to subscribe to new shares on preferential terms, which would dilute the assailant. In practice, the mere fact that leaders have received shareholder approval to issue such bonds should be deterrent.

The concept of reciprocity is in the same line. This new mistigri, and the uncertainties surrounding it has already done a lot of ink: presented as a way for French companies to defend equal weapons against foreign predators, reciprocity work in reality as well as against French initiators. In principle, a measure likely to frustrate the offer is subject to the agreement of the shareholders of the target "in the course of supply". By exception, if the initiator is not "virtuous" that was not required to consult its shareholders in bid to take action anti-OPA , the target can play reciprocity and counter measures of defence approved "prior to the offer. But in fact, it is sufficient for example that the initiator is a non-listed company, or, if it is marked, that it is controlled by shareholders who are not, to be considered non-virtuous. Indeed, in this definition of virtue, found that the majority of the initiators of the OPA launched in 2006 would have been deemed non-virtuous. The exception is somehow the principle.

A Faculty of revocation

The effects of these new rules are already visible. Many companies have already been approved by their shareholders in 2006 a battery of resolutions allowing their leaders to take different measures of defences for public offer launched by a non-virtuous assailant: issuing of securities of all kinds (including the purchase of offer), redemption of shares, but also transfer or acquisition of strategic assets. Some astonished that shareholders have thus agreed to give carte blanche to their leaders. It remains that these last have the possibility, by making use of these authorisations, to amend the general scheme of the offer, if they feel that it is not in the interest of society.

Is the initiator much force these risks First, it may introduce its offer price adjustment clauses in an attempt to counteract the effects of a possible dilution or stipulate that its offer is subject to a minimum acceptance threshold calculated taking account of the fully diluted capital. These various clauses will not however cover all situations.

This is why the AMF, noting that the target was now able to adopt different measures affecting its consistency, just to relax the conditions for the initiator to withdraw its offer. Section 232-11 of the new general regulation provides that the initiator may ask the authority to revoke its offer if the target, "because of the steps it has taken, sees his consistency during the offer or in the case of positive result of the offer". This faculty of revocation is not new, its scope has logically should be expanded, notably to cover the assumptions of emission of BSA Breton delay effect (i.e. that would lead a dilution after the offer).

This new order anti-OPA defence therefore significantly strengthens the position of the target and its leaders against the assailant, result for the less paradoxical of the transposition of a directive whose stated purpose was, although on the contrary, to limit the defences anti-OPA. However, if it is probably not the end of hostile operations, this new order should naturally encourage the parties to find common ground on the terms of the operation.