Legal Regulation Problems of Official Suggestion
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Abstract
In the article the author analyzes a problem related to the bid. The word “bid” can be understood as a person’s official offer to obtain (buy, exchange) securities of a certain company; this offer can be made both voluntarily and in pursuance of settled obligations. Attributes, types and principles of a bid are marked out in the article. The rule of the mandatory bid is mentioned as one of the essential parts in the process of company takeovers.
The legal regulation of a bid in the USA is disputed in the article by employing a comparative and historical method. In legislating federal laws that regulate bids the principle was established that only company shareholders can govern results of the offer. The Federal regulation refers to the spirit of free market in attaining minimum regulation for bid related questions. Meanwhile, at the state level, the opinion dominated that persons who render a bid are seeking speculative purpose, but not financial stability of the company. The states began to legislate against takeover specific laws whereby the company board has final influence on the bid results. The laws of the states mainly determine the system for legal regulation of bids in the USA.
Before its harmonization in the European Union, the institution of the bid was well known in most Member States, but the provisions of legal and social rules which regulates it were too various. The difference between legal regulations in Member States of the European Union is disputed in the article and the legal base of several Member States is analyzed.
The article speaks about the harmonization of bid in EU law. The Thirteenth directive of company law concerning takeovers regulates only the takeover bid. This directive is applied only to securities listed in the securities exchange. Member States have the right to invoke a stricter regimentation for takeover bids than is provided in the directive (directive of minimum standards).
One of most important provisions of the Thirteenth directive of EU company law is the institution of the mandatory bid and the harmonization of basic provisions. A person who obtained control of a company must notify other shareholders of his mandatory bid. There is a presumption that the price of this bid would be set under the highest price rule. Member States have considerable discretion when regulating the mandatory bid, for example, by instituting the percentage of control rendering votes or circumstances when the highest price rule is not applied.
The European and USA models of regulation of bid are compared in the article. Centralization and institution of homogeneous standards is specific to the European model. The power of a company’s board in the bidding procedure is restricted and the activity of individual shareholders is stimulated. The experience of bid regulation in the Republic of Lithuania is disputed in the article by employing of a comparative, teleological, and historical method. The author suggests avoiding situations, when by law (decisions of Lithuanian securities commission) exceptions are instituted for the obligation to make a bid; thereby torturing the principle for the equal protection of shareholders’ rights. The biggest gap in the law of the Republic of Lithuania is that there’s no obligation to make a mandatory bid when the company decides to delist its securities in the securities exchange. National laws, which regulate bid, to date are not harmonized with provisions of the Thirteenth directive of company law. Several national laws which need to be harmonized are made note of in the article.
The legal regulation of a bid in the USA is disputed in the article by employing a comparative and historical method. In legislating federal laws that regulate bids the principle was established that only company shareholders can govern results of the offer. The Federal regulation refers to the spirit of free market in attaining minimum regulation for bid related questions. Meanwhile, at the state level, the opinion dominated that persons who render a bid are seeking speculative purpose, but not financial stability of the company. The states began to legislate against takeover specific laws whereby the company board has final influence on the bid results. The laws of the states mainly determine the system for legal regulation of bids in the USA.
Before its harmonization in the European Union, the institution of the bid was well known in most Member States, but the provisions of legal and social rules which regulates it were too various. The difference between legal regulations in Member States of the European Union is disputed in the article and the legal base of several Member States is analyzed.
The article speaks about the harmonization of bid in EU law. The Thirteenth directive of company law concerning takeovers regulates only the takeover bid. This directive is applied only to securities listed in the securities exchange. Member States have the right to invoke a stricter regimentation for takeover bids than is provided in the directive (directive of minimum standards).
One of most important provisions of the Thirteenth directive of EU company law is the institution of the mandatory bid and the harmonization of basic provisions. A person who obtained control of a company must notify other shareholders of his mandatory bid. There is a presumption that the price of this bid would be set under the highest price rule. Member States have considerable discretion when regulating the mandatory bid, for example, by instituting the percentage of control rendering votes or circumstances when the highest price rule is not applied.
The European and USA models of regulation of bid are compared in the article. Centralization and institution of homogeneous standards is specific to the European model. The power of a company’s board in the bidding procedure is restricted and the activity of individual shareholders is stimulated. The experience of bid regulation in the Republic of Lithuania is disputed in the article by employing of a comparative, teleological, and historical method. The author suggests avoiding situations, when by law (decisions of Lithuanian securities commission) exceptions are instituted for the obligation to make a bid; thereby torturing the principle for the equal protection of shareholders’ rights. The biggest gap in the law of the Republic of Lithuania is that there’s no obligation to make a mandatory bid when the company decides to delist its securities in the securities exchange. National laws, which regulate bid, to date are not harmonized with provisions of the Thirteenth directive of company law. Several national laws which need to be harmonized are made note of in the article.
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Please see Copyright and Licence Agreement for further details.
