Take-over proposals spark row

Date: 30/01/03

CRITICS and supporters of proposals for an EU code governing company take-overs clashed in the European Parliament this week.

German business leaders told Parliamentary hearings that the proposals - currently being examined by MEPs - would mean their firms were sitting ducks for foreign corporate raiders.

This is because the code would ban a German practice that lets managers block take-over bids if they get advance permission from shareholders to take defensive measures against any unwanted attention.

The German contingent argued that as a quid pro quo, MEPs should press for a ban on shares with special voting rights; these allow privileged minority shareholders to outvote holders of ordinary shares.

"We need an equality of weapons," said Eckart Sünner, a director of German chemicals giant BASF.

However, the suggestion was derided by other industry groups, who claimed such a ban would lead to a 'smash and grab' for some of the EU's best small firms.

"We would be an attractive target for a take-over," said Mads Olivsen, a board member of Danish drugs firm Novo-Nordisk.

He said successful bidders for companies like his were likely to be big multinationals who would shut down sales and marketing departments, with the loss of huge numbers of jobs - keeping only production and R & D in place.

Critics and supporters of proposals for an EU code governing company take-overs have clashed in the European Parliament.