FINLAND: Revised Helsinki Takeovers Code published

Tuesday January 14 2014

The Securities Market Association has published a revised version of the Helsinki Takeover Code.

The revised Helsinki Takeover Code replaces the Recommendation Regarding the Procedures to be Complied with in Public Takeover Bids (the old Takeover Code) which was published by the Panel on Takeovers and Mergers in 2006.

The revision follows changes to the Securities Market Act introduced in January 2013, and the Takeover Board of the Securities Market Association replaces the previous drafting and enforcement body, the Panel on Takeovers and Mergers.

The Takeover Board of the Securities Market Association is tasked with the drafting and updating of the Helsinki Takeover Code. It can also issue statements in individual questions relating to the interpretation and application of the Helsinki Takeover Code.

The Takeover Code of 2006 was non-binding self-regulation, whereas the obligation to comply with the new Helsinki Takeover Code of 2013 is based on the “comply or explain” principle. This means that the parties to a takeover bid (the target company and the offeror) have a statutory obligation under the Securities Market Act to confirm whether they comply with the Takeover Code, and to publicly explain if they are not committed to complying with the Takeover Code or some of its individual recommendations. The offeror shall normally publish this in connection with its announcement of the takeover bid and the target company in connection with its board of directors’ statement on the takeover bid.

The Helsinki Takeover Code addresses questions and practices related to the actions of both the bidder and the target company as well as the management and shareholders of the target company. The Helsinki Takeover Code is relevant for all parties involved in a public takeover bid such as bidders, target companies and their advisors. The Code covers the following 14 recommendations:

1. Ensuring prerequisites to complete a bid
2. Duty of the Board of Directors to take measures due to a proposal relating to a bid
3. Contractual arrangements with the offeror
4. Disqualification issues and other connections of the members of the Board of Directors to a bid
5. Statement of the Board of Directors of the target company regarding a bid
6. Due diligence review in the target company
7. Due diligence review regarding the offeror
8. Measures of the target company in the event of a competing bid
9. Acquisition of securities of the target company from the market
10. Preparing for information leaks
11. Disclosure of a bid
12. Invoking a condition set for the completion of a bid
13. Intention to acquire the remaining securities of the target company
14. Integration measures

Click on the above link for the text of the Helsinki Takeover Code.