Take-over directive heading for collapse as time runs out

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Series Details Vol.7, No.20, 17.5.01, p7
Publication Date 17/05/2001
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Date: 17/05/01

By Peter Chapman

German Christian Democrat Klaus Heiner-Lehne attacked EU diplomats and the Swedish presidency, who this week said they would not accept any watering down of the draft rules, which insist that the boards of target companies must be prevented from taking defensive measures to ward off hostile take-overs.

"I think the chances of failure are now 70-80%," said Lehne, lamenting that 11 years of efforts since the launch of the original Commission proposal would come to nought if the 5 June talks fail.

Member states have refused to budge despite warnings that their position is unacceptable to MEPs, who voted earlier this year in favour of giving boards the power to dispense 'poison pills' without the permission of shareholders.

The only voice of dissent was Germany, which reversed its support for the Council position earlier this month, citing concerns that its firms might be picked off by foreign rivals.

Lehne said: "I have heard their decision. They don't want to discuss [defensive measures]. This is dictatorship of the Council. Nothing more, nothing less."

He said it was now pointless for the 'trilogue' of Parliament, Council of Ministers and Commission to go through the motions in one last scheduled session of informal talks on 29 May before the end of formal 'conciliation talks'.

But he said there was a still a chance that the Swedish presidency and MEPs might agree a last-minute deal "on the stroke of midnight" on 5 June - the day when the clock stops ticking on the strict six-week conciliation deadline.

He said Parliament had been "flexible in any sense" to a compromise all along - unlike governments. Lehne reserved stinging criticism for the Commission, which he claims had done little to bridge the gaps between the Council and MEPs.

"My feeling is that the task of the Commission should be to make compromises," he said. "They should be intermediaries. But [the Commission and Council] are like identical twins. I know from my sources that even in technical discussions with Council they are thinking how they could act against the Parliament."

Swedish negotiator Rolf Skog said member states had offered solutions to many of the MEPs' concerns such as the need to tackle wide divergencies in company law across the Union.

Single Market chief Frits Bolkestein's spokesman Jonathan Todd said: "If this goes down the tubes it is Parliament's fault. If they don't agree to the compromises the proposal will go in the bin."

He said the Commission would then have to "reflect on whether to start over again". In the meantime, industry would "pay the price with the harm done to restructuring and competitiveness".

The EU'S controversial take-over directive is heading for collapse with just one full day of talks left before the deadline for a deal, says the MEP in charge of negotiations with member states.

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