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Political agreement on the Takeover Directive was finally reached in
December 2003 after 14 years of negotiation. This was only achieved
as the result of a controversial compromise which makes the two
most important provisions of the Directive optional – Article 9
which prohibits offeree companies from taking defensive action to
frustrate bids without shareholder approval and Article 11 which
allows offerors to breakthrough certain offeree company restrictions
so that they can achieve full control of the offeree company. The
European Parliament approved the compromise text on
16 December 2003. The Council gave final approval on
30 March 2004 and the Directive came into force on 20 May 2004.
It will now have to be implemented in each Member State by 20 May
2006.

The full impact of the Directive on takeover rules in the EU cannot
be assessed until Member States have decided whether they will opt
out of Articles 9 and 11 and also given more thought about how they
will implement the Directive. Member States are only just beginning
to think about these issues. The picture will become clearer over the
next two years before the May 2006 deadline for implementation of
the Directive in national laws. However, some points can be made
now.