Nordisk Tidsskrift for Selskabsret

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Nordisk Tidsskrift for Selskabsret behandler aktuelle juridiske og økonomiske emner af betydning for selskabsretten; herunder også konkurrenceret, skatteret, regnskab og revision.

Udkommer 4 gange om året.

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On May 4, 2021, a new Danish Act on Screening of Foreign Direct Investments (FDI) was adopted by the Danish Parliament. The Act can be viewed as a response to the EU FDI Regulation from 2019, which aims to protect European companies of importance to public order and security from foreign investors taking control over key technologies and critical functions within the EU.

The Danish Act on Screening of Foreign Direct Investments contains several comprehensive measures against foreign direct investments. The question is how these measures, in practice, will affect foreign investors in Denmark.

This paper reviews and analyzes the most important parts of the Danish Act on Screening of Foreign Direct Investments and examines whether the Danish screening regime is in line with other EU countries’ screening mechanisms. The paper also addresses the challenges of the Act’s provisions on 1) which investors are subject to the Act 2) when does an investor obtain control over a Danish entity and 3) when can an investment be considered to pose a threat to national security and public order.

In the USA, although still debated, the CFA Institute recognizes that in connection with investment analyzes etc. not only 1) significant publicly available knowledge, and 2) not significant publicly available knowledge, can be included but also 3) non-significant, not publicly available knowledge. By combining these three types of information, a “mosaic” emerges that provides a broader and thus better picture of a stock or an issuer. This approach is thus also referred to as the “mosaic theory”. In a Danish and European context, such a theory raises several issues, primarily of a capital market law nature under the Market Abuse Regulation (“MAR”), but also in relation to other areas of law, such as the regulation of trade secrets and confidentiality obligations. In relation to MAR, the relevant issues relate primarily to the definition of inside information and the associated prohibitions against unlawful disclosure and insider dealing. MAR does not contain a specific indication of how much non-publicly available information can be collected and whether this, when compiled, can be considered inside information. MAR also does not contain a requirement that the inside information, if such comes into existence, must originate from or be known at all by the issuer, provided the knowledge in question relates to the issuer or a financial instrument. In addition, MAR’s “safe harbor” provision with respect to research, estimates, and transactions based upon such, specifically states that the provision only applies if the research etc. is based on publicly available data. The aim of this article is to analyze whether the application of the mosaic theory in a Danish context can result in an investor or investment analyst through the collection and compilation of sufficient knowledge, including non-public data, can result in such person having acquired inside information as defined by MAR, and thus subject to the consequent restrictions. In this connection, it is considered whether the sources of the knowledge in question, and how this knowledge has otherwise been obtained, can be given importance in the assessment. It is concluded that application of the mosaic theory involving collection of non-public information, may result in the result itself being considered inside information, regardless of the source of information, and how this is obtained, triggering the prohibitions and restrictions under MAR.

Forfattere: Erik Lidman og Kevin Ewerlöf

Threequestionsregarding the valuation of minority shares connected to the new directive on cross-border conversions, mergers and divisions: appraising the ‘shares or the company’, minority discounts and illiquidity discounts

In this article, we discuss three questions connected to the appraisal remedy in the new EU-directive on cross-border conversions, mergers and divisions (see article 86i, 126a and 160i in [EU] 2019/2121), which dictates that member states should provide shareholders who has voted against the approval of a cross-border operation (such as a merger) to have the right to exit the company and receive cash compensation for their shares that is equivalent to the value of those shares. First, should the market value of the minority shares or the value of the corporation serve as basis for the calculation of a fair cash compensation awarded to the shareholders who voted against an approval of a cross-border operation? Second, should a fair cash compensation include a minority discount (or control premium)? And third, should a fair cash compensation include an illiquidity discount? We discuss these questions and the valuation effects of how they are answered by comparing the appraisal remedy in Delaware corporate law with the regulation on compulsory share redemption (‘inlösen av minoritetsaktier’) in Swedish law. Our findings are that the directive allows both the market value of the minority shares and the value of the corporation to serve as basis for calculating a fair cash compensation and that it will be up to the national competent authorities to make this choice at present, and also that the answers to the second and third question will follow from this choice.

Fodnoter

1

. Erik Lidman - Lektor vid Göteborgs universitet.

2

. Kevin Ewerlöf - Associate vid Mannheimer Swartling.

Forfattere: Erik Lidman og Rolf Skog

IntheUK Listing Review it is suggested that the LSE should allow companies with dual class share (DCS) structures to list on the Premium segment. In this paper, we discuss this proposal. First, we present an overview of the DCS-debate together with the proposition in the Review to allow for DCS-listings under certain conditions. Second, we discuss the arguments that are made against DCS-listing. We then give an overview of the Swedish DCS-regulation and the political economy. From there, we discuss the conditions for DCS-listing recommended in the Review. Our conclusion is that several of the DCS-listing conditions suggested might not only hinder DCS-structures from being useful for companies that wish to utilize such structures but would in several cases disable the corporate governance mechanisms that would otherwise counteract several of the problems that DCS-structures can give rise to, most prominently the market for corporate control.

Fodnoter

1

. Associate professor at Gothenburg University.

2

. Professor at Gothenburg University. We thank Professor Paul Davies, University of Oxford, for his helpful comments and suggestions.

 

  • Professor, dr.jur., dr. h.c. Paul Krüger Andersen (ansvarshavende), University of Aarhus
  • Professor, dr.jur. Jesper Lau Hansen, University of Copenhagen, Denmark
  • Adj. professor, ekon.lic. Rolf Skog, Justitiedepartementet, Sweden
  • Professor, dr.juris Tore Bråthen, Handelshøyskolen, Norway Associate
  • Professor Andri Fannar Bergþórsson, dr. juris, Reykjavik University Menntavegur, Iceland
  • Professor Matti Sillanpää, dr. juris, Turku School of Economics, Finland LLM Erik Lidman, Handelshögskolan i Göteborg, Sweden.