ITALY Law and Practice Contributed by: Roberto Bonsignore, Paolo Rainelli, Gerolamo da Passano and Nicole Puppieni, Cleary Gottlieb Steen & Hamilton LLP
7. Disclosure 7.1 Making a Bid Public
offer document published before the offer period commences. The “squeeze-out” mechanism also extends to financial instruments other than voting securities (eg, non-voting preferred shares). • If the bidder acquires (through a tender offer or otherwise) more than 90% of the voting shares but fails to restore a sufficient free float, it must make an offer to all remaining shareholders to acquire their voting shares. This offer is conducted through a “sell-out” procedure, which results in the de-list - ing of the company’s shares and may be combined with or followed by a “squeeze-out” procedure. 6.11 Irrevocable Commitments It is common for a bidder to seek, and often obtain, irrevocable tender commitments from major or select - ed shareholders of the target listed company. Nego - tiations for such undertakings are usually conducted shortly before the announcement of the voluntary ten - der offer for the target shares, as the bidder typically wishes to announce both the acquisition/tender offer and the undertakings received in connection there - with. Commitments to tender, which must be fully and promptly disclosed, do not give the bidder complete certainty on the success of the transaction because – by operation of Italian law (and thus irrespective of any contractual provisions) – shareholders may unilaterally terminate their existing commitments to tender in case of a competing offer. This is one of the reasons why bidders in Italy often prefer to structure the transaction not as a one-step voluntary offer supported by undertakings to tender given by the major shareholders, but rather as a two- step transaction consisting of the “private” acquisition of a controlling stake from the major shareholders pur - suant to one or more sale and purchase agreements (which are not subject to any statutory out in the event of a competing offer), followed by a mandatory offer for all the remaining shares of the target company.
The bidder must formally announce the offer by means of a detailed press release, including all material terms of the offer, which must be published promptly after the bidder has decided to launch the offer in the case of a voluntary offer. In the case of a mandatory offer, the announcement must be made promptly after the occurrence of the transaction or other circumstance that causes the bidder to exceed a relevant MTO threshold in the target company. If the mandatory offer follows a prior transaction, such as the acquisition of more than 25% (where appli - cable) or 30% of the voting rights in the target, the public announcement of the prior transaction will usu - ally include a reference to the launch of a subsequent mandatory offer. 7.2 Type of Disclosure Required Under EU regulations, when new shares are offered to the public or admitted to trading on an Italian reg - ulated market in connection either with a takeover by means of an exchange offer or with a merger or demerger, a disclosure document (also known as an “exemption document”) must be prepared instead of a full prospectus, to enable investors to make informed investment decisions. The exemption document should contain relevant information which is neces - sary to enable investors to understand: • the prospects of the issuer/offeror and, depend - ing on the nature of the transaction, of the target company or the company being incorporated or demerged, including significant changes in their business and financial position since the end of the previous financial year; • the rights associated with the shares; and • the description of the transaction itself and its impact on the issuer/offeror. In addition, under Italian law, the shareholders of the relevant company (offeror, incorporating entity in the merger, demerging entity) must be provided with an information document on the transaction if it exceeds certain materiality thresholds and the company has not opted out of this disclosure obligation.
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