dutch corporate takeover defences tough to breach
Last Updated : GMT 09:40:38
Themuslimchronicle, themuslimchronicle
Themuslimchronicle, themuslimchronicle
Last Updated : GMT 09:40:38
Themuslimchronicle, themuslimchronicle

Before performing a sudden U-turn

Dutch corporate takeover defences tough to breach

Themuslimchronicle, themuslimchronicle

Themuslimchronicle, themuslimchronicleDutch corporate takeover defences tough to breach

Unilever, maker of household brands including Marmite, held off a massive takeover bid by Kraft Heinz
The Hague - ArabToday

 Corporate takeovers can be tricky in the Netherlands, as US food giant Kraft Heinz found out before performing a sudden U-turn in its surprise move on Unilever, experts say.

But even unwanted attention from a potential predator can be useful, if it serves as a wake-up call for companies needing to shape up to avoid becoming a target again, they say.

Kraft Heinz on Sunday announced it was dropping its $143 billion (135 billion euro) offer to buy the Anglo-Dutch Unilever -- barely two days after vowing to press ahead with the bid that would have created the world's second-largest food giant behind Nestle.

Rotterdam-based Unilever had on Friday snubbed the offer, saying it "fundamentally undervalues" the company that has brands like Marmite, Magnum ice cream, Lipton tea and Knorr soups in its portfolio.

"We don't really know what happened behind the scenes" between Friday and Sunday, said Peter Roosenboom, professor in corporate finance at Rotterdam's Erasmus University.

"I think they (Kraft Heinz) thought they could do a friendly deal... but they made a mistake. Historically Dutch companies make use of many takeover defences," he told AFP.

Although many Dutch protective measures have been dismantled over the past 10 to 15 years "it still remains very difficult to acquire Dutch-listed companies in a hostile way", Roosenboom said.

Kraft Heinz may have decided to drop the bid once it saw things sliding towards a hostile takeover and realised "it was going to be an uphill battle to get the deal done", he said.

- Unique protection -

Analysts say Dutch corporations are protected by a unique set of laws and anti-takeover measures that makes it very difficult, but not impossible, for outside companies to conclude hostile takeovers.

Dutch companies by law must themselves consider whether the deal is in the interest of all stakeholders including management and employees, customers, creditors, suppliers and the environment.

This model differs from that used in the United States or Britain "where a board only has a responsibility towards its shareholders", said Martijn Kesler, a corporate lawyer for AMS Advocates in Amsterdam.

Unilever's corporate culture -- which focuses more on corporate responsibility and sustainability than short-term profits -- also differs vastly from that of Kraft Heinz and its owners 3G Capital, the analysts said.

The Brazilian group is well known for its brutal approach when it comes to cost and job cuts and zero budgeting principles, analysts said.

"The bottom line is the most important aspect for the owners of Kraft Heinz," said Joost van Beek of Theodoor Gilissen private bank in Amsterdam.

"Had this deal gone through, I believe thousands of Dutch jobs may have been lost," at Unilever, he said.

- Dutch 'poison pill' -

Home-grown anti-takeover measures include the so-called "Dutch poison pill" which during a takeover transfers control of the company from public stockholders to a controlled foundation.

For instance, a targeted company can issue share certificates that means a large portion, or even a majority, of the vote in a takeover bid is shifted to a so-called trust office foundation.

"This is a very powerful position because basically the administrators of the trust office are on friendly terms with the target company's management... effectively making it very difficult to launch a hostile takeover."

"The anti-takeover schemes in The Netherlands, especially the one using the trust office foundation are quite unique," added Kesler.

"I would not be surprised if Unilever had (similar) measures in place to protect them from the attempt," he told AFP.

The attempted takeover however showed that even large companies such as Unilever, which posted a 52.7 billion-euro turnover last year can be vulnerable to attack, analysts said.

"It might force Unilever to shape up, become more efficient and keep them on their toes," said Erasmus University's Roosenboom.

"That's probably the best way to keep your shareholders happy and make sure you don't get this unwanted takeover attention," he said.

source: AFP

themuslimchronicle
themuslimchronicle

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

dutch corporate takeover defences tough to breach dutch corporate takeover defences tough to breach

 



Themuslimchronicle, themuslimchronicle

GMT 12:04 2017 Wednesday ,27 September

Thomas Cook sees tourists return to Turkey and Egypt

GMT 20:15 2017 Friday ,17 March

Attack On Aid Convoy in South Sudan Kills Two

GMT 17:32 2017 Friday ,15 September

At least 33 dead in Nigeria boat capsize

GMT 17:23 2013 Friday ,24 May

Woolwich: Terrorism or political murder?

GMT 17:52 2017 Tuesday ,18 April

Meningitis kills 10 more people in NW Nigeria

GMT 18:08 2017 Tuesday ,17 October

Norway solar firm signs 2.5 bn-euro deal with Iran

GMT 07:43 2018 Monday ,22 January

Macron boosts Merkel ahead of key coalition vote

GMT 05:32 2016 Monday ,18 April

Australian dollar falls amid oil talk breakdown

GMT 04:45 2016 Thursday ,15 December

UAE Ambassador and Chilean Energy Minister discuss

GMT 15:34 2011 Saturday ,19 November

Williams to resume sibling rivalry in exhibition

GMT 13:03 2017 Tuesday ,14 March

Snoop Dogg shoots at Trump in new video

GMT 09:37 2016 Monday ,19 September

Southeast Asian haze crisis killed over 100,000

GMT 08:27 2015 Monday ,19 October

Patriots down Colts in 'Deflategate' rematch

GMT 16:36 2017 Tuesday ,12 September

Quarter of houses in Florida Keys destroyed

GMT 21:22 2016 Thursday ,23 June

Poll: Israelis even on Clinton vs. Trump
Themuslimchronicle, themuslimchronicle
Themuslimchronicle, themuslimchronicle
 
 Themuslimchronicle Facebook,themuslimchronicle facebook  Themuslimchronicle Twitter,themuslimchronicle twitter Themuslimchronicle Rss,themuslimchronicle rss  Themuslimchronicle Youtube,themuslimchronicle youtube  Themuslimchronicle Youtube,themuslimchronicle youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2023 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2023 ©

muslimchronicle muslimchronicle muslimchronicle muslimchronicle
themuslimchronicle themuslimchronicle themuslimchronicle
themuslimchronicle
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
themuslimchronicle, themuslimchronicle, themuslimchronicle