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COVID-19 BREAKING NEWS – Italy’s CONSOB lower the thresholds that trigger reporting duties for acquisitions of shares in Italian listed companies

The Law Decree no 23 of 8 April 2020 in response to COVID-19

After the protection of public health, one of the main goals of the Italian emergency legislation to face the COVID-19 is the protection of the Italian economic system from hostile takeovers on listed companies, made easier by lower market prices.

In this context, the Law Decree no 23 of 8 April 2020 (“DL 23”) – among a number of stimulus provisions for the economy – amended the main Italian law on financial intermediation, i.e., the Legislative Decree no 58 of 1998, as amended (“TUF”).

In particular, the DL 23 enhanced the powers of CONSOB to lower on a temporary basis the thresholds provided by the TUF in connection with the reporting of shareholding in companies listed on the Italian Exchange: now CONSOB has the authority to lower these thresholds for the stocks of all the high free float (“HFF”) listed companies, and not only when the HFF is also accompanied by a “high market value”, as provided in the TUF before the changes introduced by the DL 23. HFF means a listed company without a shareholder with 50% of the shares with voting rights plus one.

In addition, the DL has lowered the thresholds for allowing CONSOB to require the information related to the “statements of the intentions” of the purchaser in the six months following the initial acquisition, to be disclosed when a holding in an Italian listed company is acquired: before the changes of the DL 23, the minimum threshold for triggering these duties was 10%, while the new threshold is 5%.

II The CONSOB Communications nos. 21326 and 21327 of April 9, 2020

By means of the above captioned Communications of April 9, (see link in http://www.consob.it/web/consob/dettaglio-news/-/asset_publisher/hZ774IBO5XPe/content/comunicato-stampa-10-04-2020-hp/10194) CONSOB exercised the above new powers, granted to it by the DL 23.

The Communication no. 21326.

CONSOB lowered to 1% from 3% the reporting duties for holdings in (large-cap) HFF companies listed in Annex A to the Communication no 21326, and from 5% to 3% for holdings in HFF “small and medium-sized companies” (“PMI”) – as defined in the TUF – listed in Annex B to the same Communication no 21326.

The Communication no. 21327

By means of this Communication, CONSOB actually exercised the powers granted to it by the DL 23 as specified in the last period of the above paragraph, and therefore it extended the duty of transmission of the “statements of the intentions” of the purchaser to the acquisition of shareholdings exceeding 5% in the 104 companies listed in both Annex A and B of the Communication no 21326.

III Provisions common to Communications 21326 and 21327 and Timeframe

The other thresholds for reporting and information duties provided by the TUF and the second-level CONSOB rules remain unchanged.
The Communications 21326 and 21327 will be in force from April 11, 2020 until July 11, 2020, unless terminated earlier at CONSOB discretion.
The reports/information related to the new lower thresholds will have to be transmitted by ten business days from April 11, 2020 (unless already made).