The sections of the AMF General Regulation on trading in the securities of a company targeted by a takeover bid and on the reporting of trades made during the offer period have often prompted queries from the parties involved, including offerors, target companies and investment services providers. To clarify the situation and allow for the regulatory changes stemming from the Markets in Financial Instruments Directive, the AMF, in collaboration with the industry1, has amended the rules on trading in securities involved in a takeover bid.
The amendments to Title III ("Takeover Bids") of Book II ("Issuers and Financial Disclosure") of the General Regulation were approved by the decree of 10 July 2009, published in the official gazette on 17 July 2009. The new measures chiefly concern:- Establishment of a pre-offer period starting when the offeror announces details of the draft offer and ending at the beginning of the offer period or, where such is the case, on the date the offeror withdraws the draft bid. Most of the rules applicable during the offer period with regard to trading and the oversight of trades in the securities concerned by the bid have been extended to the pre-offer
period; the start and end dates for this period are published by the AMF.
- Supervision of trading by the offeror in the target company's securities. During the pre-offer period, the offeror is prohibited from acquiring the securities involved in its bid. Subsequently, the offeror's purchases are restricted, in terms of volume and depending on the type of bid, during the period between the filing of the draft offer and the opening of the bid, so as not to compromise the principle whereby a takeover bid takes place throughout the period between its opening and closing.
- Modernisation of the procedures applicable to sponsors and advisers. The principle underlying this reform is to make these institutions accountable for the operations carried out in their normal course of business. In addition, the transaction reporting rules have been streamlined.
The new regime will come into force on 1 October 200. In parallel, AMF instruction 2006-07 of 25 July 2006 on takeover bids will be amended and a new instruction will be published to stipulate which reporting schedules must be used for trades made during an offer period.
Furthermore, AMF instruction 2005-06 of 22 February 2005 on share buybacks has been modified following moves to simplify the programme description published by listed companies implementing a buyback.