The Italian government has enacted Law Decree no. 23/2020, which was published in the Official Journal on 8 April 2020 and entered into force on 9 April 2020 (the "Decree"), introducing various urgent measures aimed at reducing the impact of COVID-19 outbreak, and the prolonged lockdown, on Italian companies.

The Decree affords CONSOB (i.e. the Italian companies and market authority, Commissione Nazionale per le Società e la Borsa) new powers aimed at improving still further market transparency over creeping takeovers of listed companies, thus strengthening the existing “anti-raid” rules[1].

On 9 April 2020 CONSOB immediately exercised these powers, adopting two resolutions (no. 21236 and 21237 of 2020, the "Resolutions") tightening disclosure obligations and the requirement for significant shareholders to declare their intentions with regard to their holdings.

This newsflash outlines the content of the Resolutions adopted by CONSOB.

What's new?

CONSOB's Resolutions no. 21236 and 21237 of April 9, 2020

On 9 April 2020, CONSOB introduced a regime of enhanced transparency as regards:

–	the obligation to disclose a significant shareholding in any of the Italian listed companies identified in the annex to the resolution; and
–	the so-called "declaration of intentions" by an investor on acquiring a holding in any such listed company.

These measures will be in force for three months – unless revoked by CONSOB – starting from 11 April 2020 with respect to 104 listed issuers. The companies concerned, which all count Italy as their home member state[2], have been identified by reason of their widespread shareholder base.

The resolution expressly excludes from the application of such provisions listed companies which are under the "legal control" of a shareholder (i.e. companies with a shareholder holding 50% or more of the issued share capital).

Significant shareholdings

In particular, CONSOB has added additional thresholds under which disclosure obligations will be triggered:

–	the acquisition of an interest of 1% (previously 3%) in any of the 39 large enterprises, listed in section A of the annex to resolution no. 21326/2020; and
–	the acquisition of an interest of 3% (previously 5%) in any of the 65 small to medium enterprises (SMEs)[3], listed in section B of the same annex[4].

The exemptions to such rule provided for by the Issuers' Regulation (Regolamento Emittenti) remain unchanged[5].

Any person which, on the date of entry into force of the measures (i.e. April 11, 2020) already holds a shareholding above the relevant new thresholds has until 27 April 2020 to notify CONSOB of its holding[6].

Declaration of intentions

With respect to the enhanced transparency requirements regarding the "declaration of intentions"[7], CONSOB has also added an additional threshold of 5%, with respect to shareholdings in the 104 listed companies identified in the annex to the resolution no. 21327/2020[8]. As a consequence, those already holding or acquiring an interest of 5% or more in these listed companies in the period from April 11, 2020 until July 11, 2020 must notify CONSOB their "declaration of intention" with respect to the listed company.

What's next?

CONSOB has acted swiftly to improve transparency and require early declarations of intent with regard to stake-building during the COVID-19 emergency, and beyond. As the economic crisis extends, it is likely that these exceptional measures will continue, as the Italian government and CONSOB seek to protect Italian listed companies with fragmented shareholder bases from takeover raids.

We remain available for any clarification you may need on the above.

 

[1] The consolidated text of Article 120 of the Consolidated Financial Act, as amended by the Decree no. 23/2020, may be found here.
[2] The definition of listed issuers with Italy as home member state is contained in Article 1, paragraph 1, letter w-quater of the CFA, and it is available in English language here.
[3] The definition of SME (small medium enterprises) is contained in Article 1, paragraph 1, letter w-quater.1), of the CFA, and it is available in English language here.
[4] The list of the abovementioned companies is attached to the resolution no. 21326/2020 (available here).
[5] Such exemptions are listed in Article 119-bis of the Issuers' Regulation (available here).
[6] For the sake of clarity, such provision does not apply to those who, on April 11, 2020, held shareholding higher than the thresholds provided for in Article 120, paragraph 2, of the CFA who must comply (or have complied) with the relevant disclosure obligations applicable prior to the entry into force of the new resolution.
[7] The so-called "declaration of intention" is the obligation on investors to disclose, upon exceeding a specific threshold (i.e. 5% for the time being) their investment objectives with relation to the period of the following six months (first period of paragraph 4-bis of Article 120 of the Consolidated Financial Act – available here).
[8] The list of the abovementioned companies is attached to the resolution no. 21327/2020 (available here).

* Trainee Solicitor