NETHERLANDS: Reflection Period for Listed Companies Subject to Hostile Takeover

The Ministry for Economic Affairs in the Netherlands have issued for consultation, a draft bill, which would grant listed companies the right to call a 250 day grace period to consider a hostile takeover offer or in instances where a shareholder proposes the resignation of a director.

The government first proposed such amendments to the law following failed foreign takeover bids for paintmaker Akzo Nobel (AKZO.AS) and Anglo-Dutch consumer products maker Unilever (UNc.AS), in a letter dated 20 May, 2017, in which it outlined 4 strategies for consideration.

Under the bill, and subject to certain exceptions, during the cooling-off period, a director (or supervisory director) cannot be appointed, suspended or have their contract terminated. However, shareholders continue to be permitted to request a director dismissal is considered during this period.

The early termination of the cooling-off period may be agreed by the supervisory board, or alternatively, a request may be submitted to the court to end the cooling-off period by shareholders holding 3% or more interest in the listed company.

The Bill will amend book 2 of the Civil Code, by inserting a new Art. 114b and amending Art. 129.

The consultation is open for comments until 7 February 2019.

Click on the link above to read the Bill “Cooling-off time for the management of listed companies”.