When a public bid is made pursuant to the Danish Capital Markets Act, the board of directors of the target company must draw up a statement with its reasoned opinion on the takeover bid.
The aim of this article is to determine the content and form of the statement by including results from an empirical study carried out on the basis of 80 statements published from the implementation of the Takeover Directive on 20 May 2006 to 9 December 2022. The empirical evidence is used to elaborate how target companies generally prepare the statement and to provide indicative guidelines for the preparation of the statement.
To a large extent the content and form of the statement depends on the target company’s situation and on the specific takeover bid. The article finds that, there is no one size fits all solution with respect to the preparation and substance of the statement. As a minimum, the statement must comply with the legal requirements set out in section 22 (1) of the Executive Order on Takeover Bids. The Board should also, based on its company law obligation (in Danish: bestyrelsens loyalitetsforpligtelse), include other matters of relevance for the shareholders to reach a properly informed decision on the takeover bid.
The article also examines the possible liability of the Board and determines that the Board may be liable for the content of the statement; even though the Board probably will not become liable for damages, provided that (1) the statement is made on a sufficiently qualified and informed basis and (2) with the interests of the company and shareholders in mind.