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

6.1 Inside information

A Swedish public listed company is required to immediately disclose to the public all "inside information" that relates to it, including all material changes in information that has already been disclosed to the public:

• "Inside information" means information of a precise nature which has not been made public, relating directly or indirectly to one or more issuers of financial instruments 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 may reasonably be expected to come into existence or an event which has occurred or may reasonably be expected to do so and if 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 financial instruments or related derivative financial instruments.
• "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 that a reasonable investor would be likely to use as part of the basis of their investment decisions.

It is up to the target company to determine if certain information qualifies as "inside information". A voluntary takeover bid would be considered inside information. However, the board of the target company can delay the public disclosure for a limited period of time 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 negotiation of a bid. A delay of the announcement, however, is only permitted provided that the non-disclosure does not entail the risk of the public being misled, and that the company can keep the relevant information confidential.

6.2 In the event of a public takeover bid

Prior to the announcement of a public takeover bid, the parties will, as mentioned in 6.1 above, rely on the provisions in Article 17.4 of the MAR to delay the public disclosure of the potential bid. In case of rumors or leaks, an obligation to disclose information may be imposed by MAR, listing rules or by a decision from the SSC.

If the offeror launches a bid and if the target company during the course of the due diligence provides the offeror with inside information, the target company is to ensure that this information is made public as soon as possible. The information must only be made public if a bid is actually launched. The information is normally made public by the target company in connection with the announcement of the bid and is also to be included in the offer document.

6.3 Insider dealing and market abuse

Rules on what constitutes insider dealing and market abuse follows from MAR. In principle such offences are subject to criminal prosecution and punishable according to the Securities Market Abuse Penalties Act, which is a transposition of Directive 2014/57/EU of the European Parliament and of the Council of 16 April 2014 on criminal sanctions for market abuse ("Market Abuse Directive") and the Act with Complementing Regulations to the EU Market Abuse Regulation, which complements MAR. As the framework is based on EU legislation, similar rules on insider dealing and market abuse exist in other jurisdictions of the EEA.

As a general rule, a potential bidder should refrain from trading in the target company's securities without appropriate prior legal consultation in order to minimize the risk of any unintentional negative effects.

In principle, the rules on insider dealing and market abuse remain applicable before, during and after a public takeover bid.

6.4 Anti-takeover defense mechanisms

In practice, Swedish takeover defense mechanisms are not applied in Swedish takeover bids. Under the Takeover Act, actions by the management or the board of directors in the target company which may be construed as frustrating a public takeover bid can only be taken with prior approval from the general meeting of the shareholders or the SSC (however, this has never occurred and even if approval for frustrating actions were approved, even a slight change in the bid, such as a minor adjustment of the price, would mean that a new approval would have to be sought).

Defense measures requiring shareholder approval may include, for example, issuing shares for non-cash consideration, buy-backs of shares, acquisitions or disposals of assets or a counter takeover bid to the bidder's shareholders.

However, it is possible for a target company to try to solicit an alternative bidder (a 'white knight') to make a rival bid or to acquire a large shareholding.