LexInter | April 16, 2002 | 0 Comments


Anti-takeover defenses

Anti-takeover defense systems are the prerogative of managements who fear that their power will be called into question. They distort the power of dismissal of directors which is the counterpart of the power of directors in the French company law system.

     The ‘re holding in cascades

Cascading Holdings allow minority shareholders to come to each floor of the cascade, while maintaining control. Cascading holdings have been a method of developing “capitalism without capital”. The system has often been referred to as Breton pulley systems because it was widely used by Vincent Bolloré.

      poison pills

Poison pills are diverse: limitation of voting rights, authorizations to issue shares during a takeover bid, etc.


The self-control mechanisms are based on circular participation schemes allowing the leaders to avoid the constitution of any hostile majority likely to call into question their power. The self-control   was the subject of the Dailly Act that denies the right to vote the shares held by self-control and sanctioning the vote of treasury shares in order to prevent the effectiveness and repress its use. In assessing the existence of self-monitoring, the criterion for assessing the existence of self-monitoring, in accordance with the purpose of the law, is the power in fact for managers to block their revocation.


The cross-shareholding system was put in place to try to supplement the self-control mechanisms. It was a characteristic of the French capitalistic systems but with the refocusing on the trades and the pressure of the market, the holdings are partially uncrossed.


Various partnerships limited by shares have been set up in recent years, such as Lagardère, which oversees the activities of MATRA and HACHETTE.   The formula makes it possible to maintain the management and direction of the company in the hands of the controllers while calling on outside capital.

The transformation of a limited partnership entails, if the majority group holds two-thirds of the voting rights, the obligation to file an OPR for the benefit of the minority shareholders.

When the limited partnership is transformed into a public limited company, the general partners are generally paid substantial indemnities in return for their loss of control. This was the case with Bergé when YSL merged with SANOFI; It was the same for Castorama.


Anti-Public Purchase Offer (OPA) measures for the implementation package, Bucher, Frédéric, Option Finance, n ° 541, 03/29/1999, pp 31-37

Anti-takeover bid (OPA) defenses, Vassogne, Thierry, Banque, n ° 589, 02/02/1998, pp 39-41

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