ITALY Law and Practice Contributed by: Roberto Bonsignore, Paolo Rainelli, Gerolamo da Passano and Nicole Puppieni, Cleary Gottlieb Steen & Hamilton LLP
11.2 Aims of Activists Aims of activists include:
Italian courts have not shown a clear and consistent approach on these matters, and the effectiveness of MAC/MAE clauses largely depends on their specific wording. For instance, some clauses may exclude changes affecting “general market conditions” unless disproportionately impacting the target. As a result, greater attention is now given to the drafting and negotiation of such clauses in the agreements.
• influencing the target company’s strategy, such as pushing for the sale of certain business units, modification of the business plan or change in management, without necessarily gaining control of the board; • gaining control of the board in companies without a controlling shareholder or in cases of de facto control, with relatively low shareholdings; and • blocking de-listing or other extraordinary transac - tions or urging bidders to increase the price in take-private transactions. These typical objectives appear to be pursued less frequently in Italy than in other comparable jurisdic - tions. 11.3 Interference With Completion In addition to blocking de-listings or transactions requiring an extraordinary shareholder resolution, activist funds may also aim to interfere with take- private transactions launched by controlling share - holders when they deem the offer price too low. This interference can take various forms, such as writing to the board or promoting public campaigns to advo - cate for higher offer prices or better terms for minority shareholders.
11. Activism 11.1 Shareholder Activism
Shareholder activism plays a significant role in Italy, as several corporate governance rules grant substan - tial powers of intervention to activists. For instance, the appointment of one or more directors is relatively simple through the statutory slate voting system appli - cable to Italian companies listed on the Italian main regulated market, which may also allow the appoint - ment of the chair of the internal control body ( collegio sindacale ). Another instrument is the request to con - vene an ad hoc shareholders’ meeting or to supple - ment the agenda of an already convened meeting with a relatively small percentage of shares. Activists may also take minority positions with the aim of blocking transactions that require an extraordinary resolution with a two-thirds supermajority, or to prevent the bid - der from reaching the delisting or squeeze-out thresh - olds (see 6.10 Squeeze-Out Mechanisms ). Classic shareholder activism campaigns targeting companies’ strategies have been less common in Italy compared to other key European jurisdictions.
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