A recent decision rendered by the French Court of Appeal gives way to a smoother process for initiators of takeover bids.
An order dated April 10, 2014 has indeed dismissed the request of minority shareholders of Société de la Tour Eiffel (« STE »), a French company for which the insurance group SMABTP has launched a takeover bid, aiming at postponing the completion of the takeover to a later date.
The takeover bid, which was previously authorized by the Financial Markets Regulation Agency (Autorité des Marchés Financiers), was challenged by minority shareholders of STE, who requested that the Court of Appeal postpone the AMF’s approval decision until a judgment on the merits of their claim before the Court of appeal is rendered, as the mere challenge of a decision of the AMF does not, per se, suspend such decision. The Court rejected the claimants’ request, stating that « the claimants (i.e., the minority shareholders) do not bring sufficient evidence that the consequences of an immediate realization [of the takeover] would be irreversible or irreparable ». Besides, we understand that the defendant [i.e., SMABTP] undertook to return to the former shareholders all their shares in the event that the takeover bid was subsequently cancelled by the Court of Appeal.
Such a postponement request from minority shareholders, which is commonly granted by the Court of Appeal, has so far been the cause of significant delays in takeover procedures, which would sometimes drag for more than a year, hence giving rise to a great deal of uncertainty for both the bidder and the target company. Since the April 10 decision, it seems that disgruntled shareholders will no longer be able to stop or hinder the takeover process on the basis of thin and unsubstantiated claims. It should be noted that the minority shareholders are engaged in a pitched battle against the current management of STE and that the Board of Directors of STE is not hostile to the takeover bid of SMABTP.
 It is worth noting that unlike Canadian law, French law requires a takeover bid over a public company to be previously approved by the AMF. The AMF ensures that the proposed offer complies with applicable requirements of its General Regulation, and when such is the case, publishes on its website a statement of compliance that also constitutes an approval of the offer document.