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31 July 2020 / article

The statutory cooling-off period for management boards of listed companies

This edition of Quoted discusses the Bill on the introduction of a statutory cooling-off period for listed companies and changes Book 2 of the Dutch Civil Code. The Coalition Agreement authored by the current government entitled 'Confidence in the Future' dating to 2017 already announced the introduction of a statutory cooling-off period for listed companies.

Protection against hostile takeovers

This initiative was prompted by PPG's attempt to acquire AkzoNobel and the foreign 'attacks' on Unilever and PostNL. The cooling-off period is intended as a legal protection for companies faced with an unsolicited takeover bid or pressure being exerted on the board to change its course. The bill adds a new article 114b to Book 2 of the Dutch Civil Code (DCC). The purpose of this article is to give the board of a listed company more time and room to weigh the interests of the company and its stakeholders, i.e., to carefully determine its policy.

Maximum cooling-off period of 250 days

Management boards will be given the opportunity to invoke a cooling-off period of up to 250 days in the event of the imminent removal of management board members or supervisory board members as a result of failure to take up shareholders' ideas with regard to the strategy or in the event of an impending takeover, if the management board is of the opinion that such a situation is substantially contrary to the interests of the company and its business.

Click here to download the pdf-version about the bill and to learn impact the statutory cooling-off period will have or read it below.

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