ITALY Law and Practice Contributed by: Roberto Bonsignore, Paolo Rainelli, Gerolamo da Passano and Nicole Puppieni, Cleary Gottlieb Steen & Hamilton LLP
shareholder resolutions (see 6.5 Minimum Accept- ance Conditions ). This approach usually hinges on reaching a percentage that guarantees control, con - sidering the average attendance rate of the target’s shareholders’ meetings. To secure governance rights, the bidder may enter into shareholders’ agreements with other sharehold - ers. These agreements have a maximum duration of three years (five years for non-listed companies) and may involve other shareholders committing to vote in alignment with the bidder’s instructions, often in exchange for certain minority governance rights. 6.9 Voting by Proxy As a general principle, shareholders of an Italian listed company can vote at shareholders’ meetings either directly or through a proxy. They have the option to grant their proxy to a person of their choosing or to a common representative appointed by the company. However, under the Capital Markets Bill enacted in March 2024, Italian listed companies now have the option to amend their by-laws to allow for closed shareholders’ meetings, where participation is lim - ited to a representative designated by the company. In such cases, shareholders would grant their proxies exclusively to this designated representative. 6.10 Squeeze-Out Mechanisms In Italy, the “squeeze-out” mechanism is the sole method for a bidder to acquire 100% ownership of a listed company. This mechanism becomes available under specific circumstances following the comple - tion of a tender offer for the voting shares of the listed company. Following the entry into force of the Capital Markets Reform (see 3.2 Significant Changes to Takeover Law ), the squeeze-out mechanism operates as fol - lows. • If a bidder acquires at least 90% of the company’s voting shares as a result of a tender offer for 100% of the shares or a “sell-out” procedure, the bidder has the right to purchase all the remaining vot - ing shares within three months. The intention to exercise this right must be declared in the tender
bank guarantee, covering the total consideration for the tender offer. 6.7 Types of Deal Security Measures As most Italian listed companies are controlled by one or more shareholders, bidders typically negoti - ate the acquisition directly with, and seek deal pro - tection measures from, these controlling sharehold - ers, instead of the target’s board of directors, before launching a tender offer. From a deal protection standpoint, bidders often prefer a two-step transac - tion approach over a one-step transaction, as follows. • In a two-step transaction, the bidder first privately acquires a controlling stake, followed by making a mandatory tender offer for the remaining shares. This approach provides stronger deal protection because the sale and purchase agreement govern - ing the private acquisition can fully bind the selling shareholder(s). • On the other hand, in a one-step transaction, the bidder conducts a voluntary tender offer for 100% of the target’s shares, often supported by commit - ments from the main shareholders to tender their shares. However, these commitments to tender are subject to statutory provisions that allow share - holders to withdraw from the tender offer (see 6.11 Irrevocable Commitments ), providing less cer - tainty for the bidder. Deal protections granted by listed targets are rare. Listed targets typically only offer substantive under - takings, such as no-shop or exclusivity agreements, in negotiated transactions where the target is directly involved, such as mergers. In the context of a tender offer, it is uncommon for listed targets to provide deal protections. Break fees or reimbursement arrange - ments for a bidder’s expenses in the case of an unsuc - cessful tender offer are also unusual. Implementing such measures may raise fiduciary duty issues for the target’s directors. 6.8 Additional Governance Rights A bidder aiming to establish control over a target listed company without pursuing 100% ownership or delisting would typically seek to attain an aggregate shareholding percentage that confers control over voting outcomes on both ordinary and extraordinary
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