2251293 of the Code of commerce issue of the order of June 24 2004

With the final vote, on 23 March, the Bill on the OPA, the principle of the transposition of article 9 of the directive of 21 April 2004 is now acquired. Leaders of companies subject to a public offer must, under the new article l. 233 - 32 of the Code of commerce, get approval or prior confirmation of the General Assembly to implement measures to thwart the offer during the offer period. It is also common ground that this principle applies subject to reciprocity.

In the context of the offer launched by Arcelor Mittal, voices are high that companies with real weapons of defence anti-OPA to compensate the transposition of article 9 of the directive. The Government, followed by the Senate and the National Assembly, has chosen to allow the General Assembly of the company target to assign free warrants action to its shareholders. This route could surprise: indeed, no provision of the law of corporations limit the Faculty of the General Assembly to proceed with the issuance of bonds in offer. It is actually a willingness for the legitimization of the decisions of the General Assembly against which the powers in the matter had been evil by the decision by the Autorité des marchés financiers (AMF) in the OPA launched by Sanofi Aventis.

On this occasion, AMF took position against the project of free allocation by Aventis shareholders warrants exercisable stock loss by Sanofi's Plavix patent, the main reason that this issue was a backdoor unilateral lift of the price offered by Sanofi. No doubt that the specific consecration of this faculty will confer on the issue of the General Assembly decisions a presumption of legitimacy under the principles defended by the AMF.

Will this legislative consecration for all to deprive the MFA of his discretion on these measures Certainly not, even if one might wish that the Act specifies the conditions of this intervention of the MFA given criticism including its policy decision had been. It will retain, in its capacity as guardian of savings and the proper functioning of markets, its power of assessment under the principles enacted in its general regulation, being specified that this control will not be limited to the terms attribution and exercise of bills, and on the principle of their emission.

AMF ensure in particular, in application of the principle of free offers and outbid, that the conditions for the exercise of the right do not favour one of the players at the expense of others, for example by limiting their exercise in the case of success of one of the offers in the running.

Moreover, the Act innovates by assigning jurisdiction to decide on the issuance of bonds for offer to the extraordinary general meeting acting by the conditions of quorum and majority of the ordinary Assembly, allowing a vote simple majority instead of the majority of two-thirds applicable in principle. The second main Act input in respect to offer vouchers is to recognize the power of leaders, for the purposes of clause of reciprocity, to proceed with the issuance of such bonds in offer in execution of a particular delegation "cold" by the General Assembly without having to get "hot" confirmation of the Assembly.

A liable

The faculty to implement the clause of reciprocity for transposition of the requirement of passivity of article 9 of the directive however was challenged, which undermines the Faculty of the companies to use this clause. This subject, such Faculty of action of the leaders will be a novelty to the provisions of article l. 225-129-3 of the Code of commerce issue of the order of June 24, 2004. This article, which has been repealed, provided for the suspension of any delegation of the General Assembly in time of public offer "unless it fits without the normal course of the activity of the company and that its implementation would not derail the offer".

It remains that these powers of leaders will be, as those of the General Assembly, under the control of the MFA. Another limitation on the powers of leaders lies in the requirement for the latter to act according to the social interest. If the law provides that the issuance of bonds can intervene on preferential terms, leaders must however ensure that these conditions, including the discount granted to the shareholders, are reasonable. Otherwise, they could see their particularly liable if said broadcast leads to a withdrawal of the offer that some shareholders could be criticized.