ITALY Law and Practice Contributed by: Roberto Bonsignore, Paolo Rainelli, Gerolamo da Passano and Nicole B. Puppieni, Cleary Gottlieb Steen & Hamilton LLP
aggregate shareholding percentage that confers control over voting outcomes on both ordinary and extraordinary shareholder resolutions (see 6.5 Minimum Acceptance Conditions ). This approach usually hinges on reaching a percent - age that guarantees control, considering the average attendance rate of the target’s share - holders’ meetings. To secure governance rights, the bidder may enter into shareholders’ agreements with other shareholders. These agreements have a maxi - mum duration of three years (five years for non- listed companies) and may involve other share - holders 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’ meet - ings 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 enact - ed in March 2024, Italian listed companies now have the option to amend their by-laws to allow for closed shareholders’ meetings, where partic - ipation is limited to a representative designated by the company. In such cases, shareholders would grant their proxies exclusively to this des - ignated representative. This amendment to the by-laws requires approval by a two-thirds major - ity of those attending the extraordinary share - holders’ meeting. 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 completion of a tender offer for the voting shares of the listed company. The squeeze-out mechanism operates as fol - lows. • If a bidder acquires at least 95% of the com - pany’s voting shares as a result of a tender offer for 100% of the shares, the bidder has the right to purchase all the remaining voting shares within three months. The intention to exercise this right must be declared in the tender offer document published before the offer period commences. • 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 “sell-out” procedure, which results in the de-listing of the company’s shares. Often, this procedure also enables the bidder to reach the 95% threshold required for the squeeze-out right to be exercised. 6.11 Irrevocable Commitments It is common for a bidder to seek, and often obtain, irrevocable tender commitments from major or selected shareholders of the target listed company. Negotiations for such under - takings are usually conducted shortly before the announcement of the voluntary tender offer for the target shares, as the bidder typically wishes to announce both the acquisition/tender offer and the undertakings received in connection therewith. Commitments to tender, which must be fully and promptly disclosed, do not give the bidder com - plete certainty on the success of the transac -
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