Crossing of legal thresolds on Euronext Paris
Legal shareholding thresolds
Any individual or entity, acting alone or in concert with others, that becomes the owner, directly or indirectly, of more than 5%, 10%, 15%, 20%, 25%, 30%, 331/3%, 50%, 662/3%, 90% or 95% of the outstanding shares or voting rights of a company whose share are listed on Euronext Paris, that increases or decreases its shareholding or voting rights above or below any of those percentages, must notify that company and the Financial Market Authority within 4 trading days of the date on which it crosses the threshold, of the total number of shares and voting rights it owns.
In addition, it must declare the number of financial instruments that grant access to the Company’s share capital and voting rights and the shares already issued that may be granted pursuant to an agreement or a financial instrument mentioned in Article L. 211-1 of the French Code monétaire et financier, without prejudice to Article L. 233-9, I, 4° and 4° bis of the French Code de commerce. The same applies to voting rights that may be granted under the same conditions.
The Financial Market Authority makes the notice public.
If any shareholder fails to comply with this legal notification requirement, shares in excess of the threshold shall be denied voting rights at all shareholders’ meetings for a period of 2 years following the date on which the shareholder complies with the notification requirements. In addition, any shareholder who fails to comply with these requirements may have all or part of its voting rights (and not only with respect to the shares in excess of the relevant threshold) suspended for up to five years by the Commercial Court at the request of the Company’s Chairman, any shareholder or the Financial Market Authority, and may be subject to criminal fines.
Shareholding thresolds set forth by the Company’s Articles of association
The relevant company’s by-laws usually provide that any shareholder who holds directly or indirectly, alone or in concert with others a number of shares in the Company giving a shareholding equal to or in excess of a certain percentage (for instance 0.5%) of the total number of shares or voting rights issued must notify the company by recorded letter with proof of receipt within 5 days of this threshold being exceeded, it being specified that this notification is to be repeated under the same conditions (i) whenever a new threshold of a multiple of 0.5% of the total number of shares or voting rights is exceeded, up to and including the threshold of 50% and (ii) where the shareholding or voting rights of a shareholder falls below one of the above-mentioned thresholds.
This notice is not publicly available.
If any shareholder fails to comply with the above notification requirement, upon the request, recorded in the minutes of the shareholders’ meeting, of one or more shareholders holding together at least 3% of the company’s share capital or voting rights, such shareholder shall be deprived of voting rights with respect to the shares in excess of the relevant threshold for all Shareholders’ Meetings until the end of a 2-year period following the date on which such person or entity complies with the notification requirements.
Statement of intent on Euronext Paris
Any person who acquires more than 10%, 15%, 20% or 25% of the outstanding shares or voting rights of a listed company must file a report with such company and the Financial Market Authority within 5 days of the date when such threshold is met or crossed.
In the report, the acquirer must specify whether it is acting alone or in concert with others and specify its intentions for the following 6-month period, including whether or not it intends (i) to continue its purchases, (ii) to acquire control of such company or (iii) to seek nominations to the Board of Directors. The Financial Market Authority makes the report public. The acquirer must amend his stated intentions within 6 months of the publication of the report if his intentions change by filing an updated report.
Identification of shareholders in France
Each shareholder of a French company may elect to have its shares held (i) in registered form and registered in its name in an account maintained by the Company (“forme nominative pure”), (ii) in administrative registered form on the books of an accredited financial intermediary of their choice (“forme nominative administrée”), or (iii) in bearer form and recorded in its name in an account maintained by an accredited financial intermediary (“forme au porteur”).
The relevant company knows the identity of its shareholders holding their shares in registered form (“forme nominative pure”) or administrative registered form (“forme nominative administrée”). However the company cannot know the identify of its shareholders holding their shares in bearer form, except if (i) the relevant shareholders notify the company that they have crossed a specified threshold, as mentioned above or (ii) the company proceeds with a specific identification procedure as described below.
By way of an exception, the Chairman of the Board of Directors, the Chief Executive Officer, the deputy Chief Executive Officers (if any), any natural or legal persons exercising the functions of Director, and permanent representatives of legal persons exercising the said functions, are required either to put their shares in registered form or to securely deposit such shares. If this requirement is not fulfilled, the voting rights and entitlement to dividend shall be suspended until the situation is duly rectified.
Euroclear Identification procedure
A french listed company may obtain from Euroclear, at its own cost and at any time, the name, nationality, year of birth or incorporation, address and number of shares held by each holder of shares.
Whenever these holders are not residents of France and hold such shares and other equity-linked securities through accredited financial intermediaries, the Company may obtain such information from the relevant accredited financial intermediaries (through Euroclear), at the Company’s own cost.
The information obtained through this procedure, which is referred to as a “titre au porteur identifiable” (a “TPI”), may only be used by the company and shall not be transferred to any third party.
It is customary to proceed with a TPI in order to identify the shareholders in anticipation of a transaction submitted to the approval of a Shareholders’ Meeting.
Mandatory tender offers on Euronext
In the event a person, acting alone or in concert, comes to hold, directly or indirectly, more than 30% of a company’s equity securities or voting rights, such person is required:
- to inform the Financial Market Authority immediately, and
- to file a tender offer for all of such company’s equity securities.
A similar obligation applies in the event a person, acting alone or in concert with others, holds between 30% and 50% of the share capital or voting rights in French listed company, and increases by 1% or more his/her/its shareholding or voting rights in the company over a 12-month period.
Exemption (dérogation) regime:
- The Financial Market Authority ’s general regulations (Règlement général de l’AMF) provides for a precise list of exemptions; and
- The Financial Market Authority may in particular grant an exemption (dérogation) from the requirement to make a tender offer in respect of a transaction resulting in a crossing of the above threshold when such transaction includes a contribution of assets/shares or a merger subject to the approval of the Shareholders’ Meeting.
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