Spain lowers threshold

The news that Spain will lower the threshold above which buyers will have to make a mandatory bid for the remainder of the shares from 50 to 30 percent is welcome. But it leaves open the general question of what is so magical about the 30 percent limit that it has become enshrined in the takeover regulations of several countries.

It also leads to the question of who is setting these limits and how their impact is being monitored. Closely related is the question of the way the mandatory bid has to be made after the threshold gets triggered. So far, legislators, market insiders from the producer side (banks, securities firms and investment managers) dominate the discussion and there is little regard for the voice of the ultimate owners of the businesses.

Boots Deputy Chairman involved in bid for Company

It is time that the public shareholders create robust defences against conflicts of interest that exist when all or part of top management and board members are involved in bids for the company or assets that are being sold off.
These insiders have a substantial advantage over the public shareholders when assessing the intrinsic value of a company's asset and it sounds more than hypocritical when they argue that they want to make a bid because the market undervalues the shares of the company. Let them buy shares in their private investment account but do not allow them to make bids within a cooling off period of one, preferably two years after leaving the company.

Private Equity Bashing Circus?

The quality of argument about the benefits of Private Equity investment has reached a dangerously low level when a commentator in a leading British Daily Newspaper can call the discussions a 'private equity bashing circus'.
We would like to point out, however, that two crucial points hardly got mentioned so far.
One concerns the distributive effects the growing presence of private equity. A narrow group of managers in the private equity industry reaps the benefits of ever-growing buy-outs on the back on a compensation structure that has originally been designed for managers of (much smaller) venture capital funds. No one seems to know how much the numbers involved are but the combination of (over?) generous management fees of around 2 % p.a. and a profit sharing of 20 % above (unspecified?) hurdle rates let the compensation available to managers or public companies pale in comparison.
Growing concentration of company ownership in a small number of opaque management companies that are nothing but conglomerate holding companies is also contrary to the aim of a wider spread of company ownership that should be a focus in a democratic society.

No to Super-voting Shares

We reject all types of differentiated voting rights. In most cases they serve to protect the interest of a dominant owner. This does not mean, however, that we subscribe to the simplistic theory of 'one share, one vote' that is currently so popular in corporate governance circles, academia and politics. Super-voting shares are blatant discrimination and an abuse of the privilege that limited and public company status provides.