ITALY Law and Practice Contributed by: Roberto Bonsignore, Paolo Rainelli, Gerolamo da Passano and Nicole Puppieni, Cleary Gottlieb Steen & Hamilton LLP
stakes in certain sectors (see 2.6 National Security Review ). • The standstill obligations often imposed on a potential bidder by the main shareholders or the board of directors of the target company once the potential bidder has entered into discussions with them about a possible bid. • The prohibition – stemming from the EU Market Abuse Regulation (Regulation (EU) No 596/2014 of 16 April 2014, as amended) and its implementing EU and Italian laws and regulations – on carrying out transactions while in possession of “inside information” (eg, price-sensitive non-public infor - mation) concerning the listed target company or its financial instruments. This may be relevant, for example, in a scenario where, as is often the case in Italian public M&A transactions, the bidder is already negotiating a potential takeover bid/control transaction with selected shareholders of the target or possibly the board of directors of the target, or, in some cases, is carrying out limited due diligence on the target. • Stakebuilding purchases may impact the price to be paid for the target shares in a subsequent man - datory offer, as the price offered in a mandatory offer cannot be lower than the highest price paid by a bidder during the 12 months preceding the official announcement of the offer. 4.4 Dealings in Derivatives Dealings in derivatives as a means to carry out stake - building are generally permitted, subject to the dis - closure requirements outlined in 4.5 Filing/Reporting Obligations . Specific and temporary restrictions on short selling may also be set by market authorities. 4.5 Filing/Reporting Obligations As indicated in 4.2 Material Shareholding Disclosure Threshold , the obligation to disclose the crossing of certain shareholding thresholds in an Italian listed company applies not only to actual shareholdings (shares with voting rights) but also to potential share - holdings held through call options or other physically or cash-settled derivatives, or other long positions on the company’s shares, and to the combination of actual and potential shareholdings. Disclosure is made by submitting a form to the listed company and to CONSOB, which publishes a summary thereof.
or total return equity swaps. Both approaches are sub - ject to disclosure requirements if the bidder reaches certain actual or potential shareholding thresholds in the target company (see 4.2 Material Shareholding Disclosure Threshold and 4.5 Filing/Reporting Obli- gations ). 4.2 Material Shareholding Disclosure Threshold Any person who crosses one of the following thresh - olds in an Italian listed company, upwards or down - wards, must disclose it within four trading days: 3% (applicable only to companies with a market capitali - sation of at least EUR1 billion), 5%, 10%, 15%, 20%, 25%, 30%, 50%, 66.6% and 90%. Disclosure is made through a form submitted to the listed company and to CONSOB, which then publishes a summary. These disclosure thresholds are calculated as a per - centage of the total number of voting shares of the listed company (or, if the listed company has loyalty shares or multiple voting shares granting more than one voting right, of the total number of voting rights outstanding from time to time). They apply not only to actual holdings (ie, the listed target company’s voting shares) but also (excluding the 3% and 90% thresh - olds) to: • potential holdings held through call options or other physically or cash-settled derivatives or other long positions on the target company’s shares; and • the aggregate of actual and potential holdings. 4.3 Hurdles to Stakebuilding The main hurdles to stakebuilding in Italy include the following. • The relatively low disclosure thresholds applicable to the acquisition of both actual holdings (ie, voting shares) and potential holdings (ie, call options and other physically settled or cash-settled derivatives or other long positions) – see 4.2 Material Share- holding Disclosure Threshold . These thresholds cannot be lowered or raised by the listed company itself. • The requirement for a national security review, to the extent applicable to the acquisition of minority
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