Executive summary

The interpretation of the concept 'acting in concert' as used in the Takeover Directive (directive 2004/25) raises many unanswered questions. This often makes it difficult for cooperating shareholders (or other parties) to assess whether they are or will be required to make a mandatory public offer. Recently, ESMA published a 'white list' of activities in which shareholders may cooperate without being presumed to have acted in concert.


Under Dutch takeover law a shareholder (or other party) that is entitled to exercise 30% or more of the voting rights in a Dutch company listed in the EU/EEA is required to make a public offer for the remaining shares at a fair price. For the purpose of determining whether the 30% threshold has been met, the voting rights of parties acting in concert with the share-holder or other party are included. Due to the ambiguous wording of the acting-in-concert rule, however, it is often unclear whether the mandatory public offer obligation has been or will be triggered. An undesirable consequence of this is that shareholders are reluctant to cooperate even where their cooperation could be useful in promoting good corporate governance.

In its evaluation of the Takeover Directive of June 2012 and its action plan 'European Company Law and Corporate Governance' of December 2012, the European Commission therefore pressed for clarification of the acting-in-concert rules. In consultation with the Commission and following an informal consultation the European Securities and Markets Authority (ESMA) published a 'white list' on 12 November 2013.

White List

In its White List ESMA identifies a number of activities in which shareholders may cooperate without being presumed to act in concert. These activities are:

Board consultation
Raising matters with the company's board or making representations to the board about company policies, practices or particular actions that the company might consider taking.

Exercise of shareholder rights
Exercising shareholder rights to add items to the agenda of a general meeting, table draft resolutions and call a general meeting, other than in relation to the appointment of board members (see below).

Exercise of voting rights
Agreeing to vote in the same way regarding a particular resolution put before a general meeting in order, for example, to approve or reject a proposal relating to director's remuneration, an acquisition or disposal of assets, a dividend distribution, a share buy-back or a reduction or increase of capital.

The fact that an activity is on the list does not mean that the parties cooperating to engage in that activity cannot under any circumstances be regarded as acting in concert. Rather, it means that such cooperation will not, in and of itself, be regarded as acting in concert. National competent authorities are required to decide each case on the basis of its own particular facts.

If, in addition to the fact that shareholders (or other parties) have cooperated in an activity on the White List, there are other facts indicating that they should be regarded as having acted in concert, the national competent authority must take those other facts into account in making its determination. For example, there may be facts about the relationship between the shareholders, their objectives, their actions or the results of their actions which suggest that their cooperation in relation to an activity on the White List is not merely an expression of a common approach on the particular matter concerned but one element of a broader agreement or understanding to acquire or exercise control over the company.

ESMA's White List thus provides safe-conduct guidelines for institutional investors cooperating to protect their investments or promote good corporate governance. In many respects, the White List gives these investors – who are likely to have been operating cautiously anyway – the desired clarity. For market parties with a more strategic focus, operating on the fringes of the corporate-governance playing field, the present lack of clarity largely remains.

Activities not on the White List, appointment of board members

The fact that an activity is not on the list does not mean that parties cooperating to engage in that activity will automatically be seen as acting in concert. With respect to these activities the current uncertainties will remain.

However, ESMA has provided some degree of clarification on the issue of whether share-holders (or other parties) who cooperate in relation to appointments to the management board or supervisory board are acting in concert. The White List does not include any activity relating to such cooperation because of the fundamentally different approaches taken on this issue in the different EU member states. With a view to its practical relevance, ESMA sets out a number of circumstances which national competent authorities may consider, in addition to the ones mentioned above, when deciding whether shareholders are to be held as acting in concert when cooperating in relation to board appointments. Such circumstances include the number of proposed board members being voted for pursuant to a shareholders' voting agreement and whether the appointment of the proposed board member(s) will lead to a shift in the balance of power on the board.

Application in the Netherlands

The White List cannot be applied directly in the Netherlands because the supervision over mandatory offers is exercised not by the Financial Markets Authority (AFM) but by the Enterprise Chamber of the Amsterdam Court of Appeal. This allocation of authority has been widely criticised. Presumably the Enterprise Chamber will seek inspiration in the White List, but as an independent judicial authority it is not bound by it. That would require the list to be codified in the Dutch financial supervision rules. Codification is desirable because it would remove the uncertainty regarding the scope of the list's application.

Finally, appendix A to the White List makes painfully clear that the Netherlands is the only EU country in which market parties lack recourse to a dedicated contact point at the national competent authority who they can consult for further guidance on the acting-in-concert rules. Although ESMA specifically encourages such consultation, it is unavailable in the Netherlands. For practitioners here, this remains problematic. 

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.