Before a Public Takeover Bid | Italy | Global Public M&A Guide

3. Before a Public Takeover Bid

[Last updated: 1 January 2025, unless otherwise noted]

3.1 Shareholding rights and powers

The table below provides an overview of the different rights and powers that are attached to different levels of shareholding held in the voting stock of an Italian listed company:

Shareholding	Rights
One share	The right to receive a proportional part of the net profits of the company, if any, and of the net assets of the company upon winding-up. The right to attend and vote at shareholders’ The right to obtain a copy of the documentation submitted to share-holders’ meetings. The right to submit questions (either orally at the meeting or in writing prior to the meeting) to the directors and statutory auditors at shareholders’ The right to petition for voidance of resolutions adopted by the shareholders’ meetings where (i) the meeting has not been duly called, (ii) the minutes of the meeting have not been drafted, and (iii) the content of the resolution is impossible or The right to lodge a complaint with the statutory The right to examine the shareholders’ ledger and the book of the minutes of shareholders’ meetings.
0.1%	The right to challenge a shareholders’ meeting resolution which does not comply with the law or with the articles of association of the company, provided that – at the concerned meeting – the shareholders owning at least 0.1% of the voting stock were absent or expressed a negative vote or abstained, unless the articles of association set forth a lower percentage or exclude altogether the applicability of any percentage requirement for the purpose of said challenge. The right to challenge a shareholders’ meeting resolution approving the financial statements on the grounds that said financial statements fail to comply with the provisions governing the preparation thereof, in presence of a negative opinion, a disclaimer or a qualified opinion expressing significant doubts on the business continuity of the financial statements, issued by the independent auditors.
2%	The right to lodge a complaint concerning the company’s management with the statutory auditors. In such case, the statutory auditors must promptly investigate the matter and report to the shareholders’ meeting or, in case of serious mismanagement, promptly call the shareholders’ meeting for urgent actions (unless the articles of association set forth a lower percentage).
2.5%	The right to request that the agenda of the shareholders’ meeting be supplemented and to submit proposals for resolution in relation to items already included in the agenda of the shareholders’ meeting. The right to sue the directors and/or the statutory auditors for damages caused to the company (unless the articles of association set forth a lower percentage). The right to submit a list of potentials for the appointment of the directors and the statutory auditors (unless the articles of association set forth a lower percentage).
5%	The right to request that (i) the board of directors, or (ii) in case of nonfulfillment by the board, the statutory auditors, or (iii) in case of non- fulfilment by the statutory auditors, the court (petitioned ad hoc), promptly call a shareholders’ meeting (unless the articles of association set forth a lower percentage). The right to petition the court to take immediate action against directors if there is well grounded suspicion of serious mismanagement which may harm the company or one or more of its subsidiaries (unless the articles of association set forth a lower percentage). The right to oppose to the shareholders’ meeting resolution aimed at (i) releasing directors and/ the statutory auditors from their liabilities vis-à-vis the company, or (ii) settling a claim of the company against the directors and/or statutory auditors, where a proceeding has been initiated by the shareholders on behalf of the company or by the company itself against the directors and/or the statutory auditors (unless the articles of association set forth a lower percentage). The right to challenge the resolution of a shareholders’ meeting approving the financial statements on the grounds that said financial statements fail to comply with the provisions governing the preparation thereof, in presence of a positive opinion on said financial statements issued by the independent auditors
20%	The right to pass a resolution to sue directors and/or statutory auditors for damages caused to the company automatically causing the removal of the relevant directors and/or statutory auditors from their offices.
33.33% (i.e., one-third of the corporate capital)	The right to claim to be not sufficiently informed about the items on the agenda and, accordingly, the right to request that the meeting be adjourned with respect to such items for up to five days.
More than 50%	The right to approve resolutions concerning the following matters in the ordinary shareholders’ meeting: approval of the financial statements; appointment and removal of directors and determination of their remuneration; appointment and removal of statutory auditors and determination of their remuneration; appointment and removal of the external auditors; resolution on the liability of the directors and statutory auditors; and any other matter attributed by law to the competence of the ordinary shareholders’ meeting.
At least 66.6%	The right to approve resolutions concerning the following matters in the extraordinary shareholders’ meeting: amendments to the articles of association; appointment and replacement of the liquidators and determination of powers granted to them; and any other matter attributed by law to the competence of the extraordinary shareholders’ meeting.
95%	The squeeze-out right (as defined under 7 below).

3.2 Restrictions and careful planning

Italian law contains a number of rules that apply before a public takeover bid is announced. These rules impose restrictions in relation to prior stake building by a bidder, announcements of a potential takeover bid by a bidder or a target company, and prior due diligence by a potential bidder. The main restrictions are summarized below. Some careful planning is therefore necessary if a potential bidder or target company intends to start a process aimed at launching a public takeover bid.

3.3 Insider trading and market abuse

The basic legal framework regarding insider trading and market abuse under Italian law is set forth in the Market Abuse Regulation and in the IFA and related regulation implementing such legislation.

With the above in mind, in principle, the rules on insider trading and market abuse remain applicable before, during and after a public takeover bid, albeit that during a takeover bid additional disclosures and restrictions apply in relation to trading in the securities of the target company. It should also be noted that the rules on insider trading prevent a bidder that has inside information regarding a target company (other than in relation to the actual takeover bid) from launching a takeover bid, unless the bidder (or the target company) publicly discloses such inside information and also includes this in the offering document (Documento di Offerta) concerning the bid.

With regard to the concept of "inside information" and for the purposes of the applicable disclosure obligations, the Market Abuse Regulation provides for a definition thereof, whereby:

"inside information" means information of a precise nature which has not been made public, relating, directly or indirectly, to one or more issuers or to one or more financial instruments, and which, if it were made public, would be likely to have a significant effect on the prices of those financial instruments or on the price of related derivative financial instruments;
information shall be deemed to be of a "precise nature" if it indicates a set of circumstances which exists or which may reasonably be expected to come into existence, or an event which has occurred or which may reasonably be expected to occur, where it is specific enough to enable a conclusion to be drawn as to the possible effect of that set of circumstances or event on the prices of the financial instruments or the related derivative financial instrument; and
"information which, if it were made public, would be likely to have a significant effect on the prices of financial instruments or related derivative financial instruments" shall mean information a reasonable investor would be likely to use as part of the basis of their investment decisions.

Usually, it is up to the management of a listed company to determine whether or not certain information qualifies as “inside information”, which in certain circumstances, may prove to be a difficult exercise.

3.4 Disclosure of shareholdings

The rules regarding the disclosure of shareholdings and transparency apply before, during and after a public takeover bid. Pursuant to these rules, if a potential bidder starts building up a stake in the target company, it will be obliged to publicly disclose its stake when the voting rights attaching to its stake pass the following thresholds: 3%, 5%, 10%, 15%, 20%, 25%, 30%, 50%, 66.6% and 90%.

For Italian listed companies qualifying as small or medium-sized enterprises ("SMEs"), the first relevant threshold to be considered for disclosure purposes is set at 5%. A listed company qualifies as an SME when it shows a market capitalization lower than EUR 1 billion.

Furthermore, in case of the acquisition of a stake exceeding the thresholds of 10%, 20% and 25%, the party responsible for the communication must disclose the business objectives it intends to pursue during the six months following the acquisition of the relevant stake.

When determining whether a threshold has been passed, a potential bidder must also take into account the voting securities held through nominees, fiduciaries or subsidiaries, respectively.

3.5 Disclosures by the target company

During a public takeover bid, the target company must continue to comply with the general rules regarding disclosure and transparency, which include the obligation of the company to immediately disclose to the public any inside information relating to itself, its securities and/or its subsidiaries, if any. The facts surrounding the preparation of a public takeover bid may constitute inside information and as such, be subject to disclosure. However, the board of the target company may delay the disclosure if it believes that a disclosure would not be in the legitimate interest of the company. For instance, this could be the case if the target’s board believes that an early disclosure would prejudice the negotiations regarding a bid. However, a delay of the announcement is only permitted provided that (i) an immediate disclosure is likely to prejudice the legitimate interests of the target company, (ii) the delay of disclosure is not likely to mislead the public, and (iii) the target company is able to ensure the confidentiality of that information.

It is worth mentioning that Regulation (EU) 2024/2809 of 23 October 2024 has further clarified the scope of the requirement mentioned under point (ii) above, by providing that, starting from June 2026, a delay of the announcement is only permitted provided that the inside information that the issuer intends to delay is not in contrast with the latest public announcement or other type of communication by the issuer on the same matter to which the inside information refers.

3.6 Announcements of a public takeover bid

The decision of a bidder to launch a voluntary public takeover bid (or the obligation of a bidder to launch a mandatory public takeover) must be notified without delay to CONSOB by way of submission of a notice ("Initial Notice"). At the same time, the Initial Notice must be disclosed to the target company and the public. No later than 20 days from the date of the Initial Notice, the bidder must file with CONSOB an offering document (Documento di Offerta) for CONSOB's approval and subsequent publication. Should said deadline not be met, the offering document (Documento di Offerta) is declared inadmissible by CONSOB and the bidder may not make a further bid on the same securities of the target company for the following 12 months.

3.7 Early disclosures – Put-up or shut-up

No put-up or shut-up rule applies in Italy. Nevertheless, if there are rumors or leaks that a (potential) bidder intends (or may be required) to launch a public takeover bid – even though such (potential) bidder has not yet publicly disclosed such intention (or requirement) – and the trading performance of the securities involved is affected, CONSOB may request such (potential) bidder to disclose information and documents in order to inform the general public.

3.8 Due diligence

Italian public takeover bid rules do not contain any specific rules regarding the conduct of pre-bid due diligence on the target company. In general terms, such due diligence is accepted in the market and also by CONSOB, although appropriate mechanisms must be put in place to avoid potential market abuse and early disclosure implications. These include the use of strict confidentiality procedures and data rooms.

3.9 Acting in concert

For the purpose of the Italian takeover bid rules, the definition of persons acting "in concert" is set forth in the applicable provisions of the IFA, which:

provides a general definition of persons acting "in concert" as including persons who co-operate on the basis of an agreement in order to (i) obtain, maintain or strengthen the control over a target company, or (ii) hinder the success of a takeover bid launched with respect to a target company. This is regardless of whether such agreement is express or tacit, oral or formalized in a written form, valid and binding or invalid and with no effect;
provides for a set of non-rebuttable presumptions, whereby persons meeting certain factual requirements and/or carrying out certain conduct are conclusively deemed to be acting in concert. Such persons are:
1. the parties to an agreement, even if void, which:
  1. concerns the exercise of voting rights in companies with securities listed on a regulated market or in their parent companies;
  2. imposes consultation obligations prior to exercising voting rights in companies with securities listed on a regulated market or in their parent companies;
  3. restricts the transfer of securities (or of financial instruments that entitle their holders to buy or subscribe for the same securities) in companies with securities listed on a regulated market or in their parent companies;
  4. provides for the purchase of securities (or of financial instruments that entitle their holders to buy or subscribe for the same securities) in companies with securities listed on a regulated market or in their parent companies; and
  5. has, as its purpose or effect, the exercise of a dominant influence (as defined in Section 2359 of the Italian Civil Code) on companies with securities listed on a regulated market or on their parent companies.
2. an entity, its parent company and its subsidiaries;
3. companies subject to joint control; and
4. a company and its directors or general managers.
delegates to CONSOB the authority to identify certain factual circumstances whereby persons are presumed to be acting in concert, unless they are able to provide evidence to the contrary. More specifically, according to CONSOB Resolution No. 11971/99:
1. a party, their spouse, cohabiting partner, persons related by consanguinity or affinity, and direct relatives and relatives up to the second degree, and children of their spouse or cohabiting partner; and/or
2. a party and their financial advisers for transactions relating to the issuer, where said advisers (or companies belonging to their group) have purchased securities of the issuer outside the scope of their trading activity (as ordinarily carried out and at arm’s length) on their own behalf, after their appointment or during the month prior to such appointment, are presumed to be acting in concert unless they can prove the contrary.

The concept of persons acting in concert is very broad, and in practice issues may arise in determining whether or not persons actually act in concert. This is especially relevant in relation to mandatory takeover bids. If the conditions and/or presumptions referred to above are satisfied and one or more persons in a group of persons acting in concert acquire voting securities, as a result of which the aforesaid group in the aggregate would pass the relevant triggering threshold, all members of the group will be jointly and severally liable to launch a mandatory takeover bid, even though the single member does not individually pass the relevant triggering threshold.

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