Posted by Eduardo Gallardo, Gibson, Dunn & Crutcher LLP, on
Tuesday, March 1, 2011
Eduardo Gallardo is a partner focusing on mergers and acquisitions at Gibson, Dunn & Crutcher LLP. This post is based on a Gibson Dunn Client Alert by Philip Martinius.
On February 11, 2011, the German Parliament approved the bill for the so-called “Investor Protection and Capital Markets Improvement Act” (Anlegerschutz- und Funktionsverbesserungsgesetz) which is part of the ongoing legislative activity responding to the financial crisis. The bill is now referred to the second chamber of the Parliament and is expected to enter into force in April.
Apart from dealing with consumer-related issues such as (i) improving the protection of (retail) investors against wrongful advice by bankers and other professionals and (ii) stabilizing open-ended real-estate funds, the bill contains new disclosure obligations for stakeholders in public companies, e.g. holders of cash-settled options.
This highly relevant new disclosure rule is a reaction to the stealth takeover tactics that were, for example, employed by sports car maker Porsche it its attempted takeover of Volkswagen in the fall of 2008, but it may have a broader impact on the way public takeovers are done in Germany.
This alert focuses on the impact of the new bill on investments in and takeovers of public companies in Germany.
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