Takeovers Regulation in Italy: Empirical Analysis and Recent Developments Marco Ventoruzzo Bocconi University

Takeovers Regulation in Italy: Empirical Analysis and Recent Developments Overview of Recent Developments – Mandatory Bids (Art. 106 TUF) – Board Neutrality (Art. 104 TUF) – Breakthrough Rule (Art. 104-bis TUF) Empirical Analysis ( ) Assessment of the New Regulatory Framework

full voting shares limited voting shares 30% full voting shares limited voting shares 30% (shares voting on a/r of directors) Cost of the Mandatory Tender Offer: Number of Shares

Minimum Price of the Mandatory Tender Offer: e.g., Takeover of Edison by EDF (October 2005) P(hp) 2.18 P(mm) 1.86 P(ma) 1.53 P outstanding full-voting shares ( ) P(to) Q

Source: Galliani, Ghezzi, Mosca, Ventoruzzo (2008 )

Board Neutrality and Breakthrough Rules 1998 TUF 2007 TUF (implementation of XIII directive) 2008 TUF (anti-crisis decree) Board neutralityMandatory Mandatory, subject to reciprocity Optional, subject to reciprocity Breakthrough Only for some shareholders agreements (art. 123 TUF) Mandatory, subject to reciprocity (except some shareholders agreements) Optional, subject to reciprocity (except some shareholders agreements)

Mandatory board neutrality Mandatory breakthrough Reciprocity Austriayesno Belgiumyesnoyes Czech Republicyesnoyes Denmarkno yes Finlandno Franceyesmixedyes Germanyno yes Greceyesnoyes Italynono (yes 123 TUF)yes Netherlandsno yes Polandno Portugalyesnoyes Spainyesnoyes Sweedenyesno United Kingdomyesno Source: Maul, Muffat-Jeandet, Simon (2008), Italy updated

Takeovers Regulation in Italy: Empirical Analysis and Recent Developments Overview of Recent Developments – Mandatory Bids (Art. 106 TUF) – Board Neutrality (Art. 104 TUF) – Breakthrough Rule (Art. 104-bis TUF) Empirical Analysis ( ) Assessment of the New Regulatory Framework

Source: Galliani, Ghezzi, Mosca, Ventoruzzo (2008) & Malberti (2008)

Source: Galliani, Ghezzi, Mosca, Ventoruzzo (2008 )

+ 9% % % Source: Galliani, Ghezzi, Mosca, Ventoruzzo (2008 )

Bidder listed corporation Source: Galliani, Ghezzi, Mosca, Ventoruzzo (2008 )

P(hp) P(mm) P(ma) P P(to) t Price of the Tender Offer

Source: Galliani, Ghezzi, Mosca, Ventoruzzo (2008 )

Source: Van der Elst (2004 )

Takeovers Regulation in Italy: Empirical Analysis and Recent Developments Overview of Recent Developments – Mandatory Bids (Art. 106 TUF) – Board Neutrality (Art. 104 TUF) – Breakthrough Rule (Art. 104-bis TUF) Empirical Analysis ( ) Assessment of the New Regulatory Framework

1998 TUF – Protecting Minorities in Friendly Takeovers, Compromise with Excessive Cost of Takeover; – Acknowledging and Addressing Conflict of Interests in the Adoption of Defensive Measures; – Harmonizing Regulatory Framework 2008 TUF – Takeovers Potentially More Expensive for Bidders; – Abolition of Mandatory Board Neutrality and Breakthrough

Source: Bianchi, Bianco (2006)