ECJ – Takeover Bids and Share Price

ECJ – Takeover Bids and Share Price

On 15 February, ECJ issued ruling on takeover bids share price calculation.

  • ECJ ruling in case C-735/19 Euromin Holdings (Cyprus) Limited officially published.


  • Latvian court referred questions to EU Court on correct application of Takeover Bids directive (TOD) and scope for national law to set rules on price of shares, methods.
  • Referral also asked on potential direct effect of TOD (if it gives rights to individuals) and on whether the corresponding requirement for State liability is met in this case.


  • Art 5(4) TOD does not preclude national law prescribing three methods for determining equitable price at which the offeror must buy back a company’s shares.
  • Including method resulting from application of art 5(4) first sub-para which provides that method which leads to highest price must always be used.
  • Provided methods to set equitable price other than that resulting from application of cited sub-para are applied by supervisory authority in compliance with art 3(1) TOD.
  • Under circumstances, criteria defined by clear, precise, transparent legal framework.
  • But same art 5(4) TOD precludes national law providing that, for purposes of takeover bid, share value is obtained by dividing the net assets of the target company.
  • Including non-controlling minority interests by number of shares issued unless method to set price based on objective valuation criterion generally used in financial analysis.
  • That may be regarded as clearly determined, within the meaning of that provision, which is a matter for the referring national court to verify.
  • Re vertical direct effect. the TOD confers in takeover bid procedure rights on the offeror that may be enforced in an action for State liability.
  • EU law precludes national legislation providing that where a Member State is rendered liable for damage caused as result of an infringement of a rule of EU law.
  • By decision of administrative authority of that State, compensation for the resulting material damage may be limited to 50% of the amount of the damage.