France: Concerted Actions

Last Updated: 5 June 1995
At the instigation of EC law (see Council Directive of 12 December 1988 on "the information to be published when a major holding in a listed company is acquired or disposed of" which introduced and generalised this notion), French securities law as amended since 1989 emphasises the concept of "action in concert". The law defines action in concert as "an agreement to acquire or dispose of voting rights or to exercise voting rights in order to implement a common policy with regard to a company" (Art. 356-1-3, para. 1 of the law of July 24, 1966 as amended). The law also sets out certain presumptions of action in concert between certain persons (e.g., companies controlled by the same people). However, these presumptions are not irrefutable and proof to the contrary may be produced.

The difficulty is that the concept of "action in concert" lacks precision and may trigger legal action : persons acting in concert are "jointly bound to meet their obligations under the law and regulations" (Art. 356-1-3 in fine of the law of July 24, 1966). Furthermore, both CBV and COB take-over regulations apply to the bidder, to the target and to persons acting in concert with them. Such persons are thus jointly subject to the same obligations and to any civil or criminal penalties.

Firstly, an agreement is necessary to constitute a "concerted action". Though the definition under French law is very close to the definition of the 1988 directive, two aspects are not included: first, the directive's specifications that a "written agreement" must precede the concerted action and second, that such written agreement must concern a "lasting common policy towards the management of the company in question". This tends to make the French law broader and more difficult to implement as it is very difficult to prove a purely verbal agreement and what features constitute "common policy" (election of company managers, common vote at shareholders or board meetings, financial policy).

Secondly, the subject of the agreement must be either the acquisition or sale of voting rights or the implementation of a common policy with respect to the company in question. However, pre-emption agreements are not considered "concerted action" if no concertation between the parties is required upon the exercise of the pre-emptive rights, and such parties are free to exercise or not such rights (see CBV Opinion No 90-1500 of May 17, 1990, Club Mediterranee, in which the CBV accepted that an agreement in which shareholders' mutually granted each other pre-emptive rights and set option conditions with regard to time limit, price and percentage, did not constitute "concerted action"). However, pre-emptive rights may under certain circumstances constitute "concerted actions" if, for example, the "current circumstances" imply a concertation between the parties : a pre-emption agreement signed among shareholders representing 28% of the voting rights of Societe Auxiliaire d'Entreprise (SAE) was held by the CBV to constitute a "concerted action" because it had been concluded at a time where management was being contested (See CBV Opinion, Nos. 90-4035 of December 26, 1990 and 91-116 of January 11, 1991). A substitute agreement was signed on April 19, 1991 between the same shareholders, apart from those holding SAE shares, who owned 21.2% of the share capital and 2.17% of SAE voting rights. The agreement was signed for a five-year term, included other shareholders and granted mutual pre-emption rights. Since the companies controlled by SAE were no longer signatories, the CBV then ruled that there was no "concerted action". The appeal procedure was therefore annulled. A "portage" transaction may also constitute a "concerted action". In its decision of June 24, 1991 on the Societe Devanlay S.A. v. Societes des Galeries Lafayette et Credit Commercial de France case, the Paris Court of Appeal held that that agreement between Galeries Lafayette and CCF was "concerted action" since the bank undertook to transfer its shares in Nouvelles Galeries within six months either to Galeries Lafayette or to other acquirers agreed by the latter.

The concept of "concerted action" remains ambiguous. The COB's point of view, which it admitted was synthetic, was that "concerted action may be presumed where, over and above any pre-emption right, there is any implication of an underlying agreement or coordination on the distribution of pre-empted securities or an undertaking not to exceed a certain shareholding threshold" (1990 Annual report, p. 54).

The consequences of concerted action are serious because the participants are bound jointly; they apply to thresholds, compulsory take-overs and declarations of shareholdings of 10% or more in privatised companies. The same penalties under civil, and sometimes criminal, law may be imposed equally on all parties acting in concert.

For further information contact Herve Letreguilly on +33 1 4471 1717.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions