Cross-border Tender Offers, the Exclusion of Certain Shareholders and the Principle of Equal Treatment

Abstract

In order to avoid the cumulative application of U.S. takeover rules it is common practice to exclude U.S. shareholders from tender offers. To this end, bidders usually avoid publicising the offer in the United States or among U.S. residents (restrictions on dissemination) and they may even regard acceptances on the part of U.S. residents as void (restrictions on acceptance). However, such restrictions could be at odds with the principle of equal treatment of target's shareholders or with the mandatory bid rule, provided for by the EU Takeover Directive as well as by Member States' domestic laws. This article sets out to demonstrate that only restrictions on dissemination might be reconcilable with the equality principle. Restrictions on acceptance, on the contrary, represent a clear violation of that principle, admissible only if the cumulative application of U.S. law would make the offer unfeasible