Einde inhoudsopgave
Exit rights of minority shareholders in a private limited company (IVOR nr. 72) 2010/3.3.9.7
3.3.9.7 Breach of information rights
mr. dr. P.P. de Vries, datum 03-05-2010
- Datum
03-05-2010
- Auteur
mr. dr. P.P. de Vries
- JCDI
JCDI:ADS408477:1
- Vakgebied(en)
Ondernemingsrecht (V)
Voetnoten
Voetnoten
Re a Company (No. 008699) [1986] BCLC 382.
The City Code on Takeovers and Mergers is a set of rules, which have a statury basis in Part 28 CA 2006. The Code is applicable to listed and unlisted plcs, and its purpose is to ensure für conduct in takeover bids with regard to shareholders. In particular cases, the code also applies to ltds, see provision A3 of the code. Website: http://www.thetakeoverpanel.org.uk.
Re a Company (No. 008699) [1986] BCLC 382, at 389 g.
Re a Company (No. 008699) [1986] BCLC 382, at 389 c. The first part of the quoted phrase literally corresponds with general principle 4 of the Code.
Another case in which reference was made to director duties is Re a Company (No. 008699).1 The question addressed in this case is to what extent directors owe a duty to the body of shareholders to sufficiently inform and advice them about competing bids which are made with respect to the company.
An Ltd was target of two rival bids. One of the bids was made by a third party. The other bid was significantly lower, less than half of the price offered in the first bid. The lower bid was made by a company that was set up by the directors of the Ltd. In a letter, sent to the shareholders, the board held that for several reasons the higher bid could not succeed and advised them to accept the lower bid. The minority shareholders, who held twentynine per cent of the shares, alleged that the letter concerned was misleading. Moreover, they held that, by giving improper information, the directors had unfürly prejudiced their interests. Hoffmann J used the City Code on Takeovers and Mergers2 as a "helpful guide" to find out what fürness requires onder similar circumstances, although he held that the Code does "not necessarily coincide with the requirements of fürness for the purposes of S. 459" (nowadays s. 994).3 He considered that fürness required the directors:
"to give the shareholders sufficient information and advice to enable them to reach a properly informed decision and to refrain from giving misleading advice or exercising their fiduciary powers in a way which would prevent or inhibit shareholders from choosing to take a better price."4
According to Hoffmann J, the alleged facts amounted to unfürly prejudicial conduct.