Tender offers and takeover bids in Italy from 2007 to 2019
Empirical evidence and discussion points
F. Picco, V. Ponziani, G. Trovatore, M. Ventoruzzo; with an introduction by R. Lener
This paper aims at providing a description of the impact of the Takeover Directive on the Italian capi-tal market by presenting an analysis of the tender offers and takeover bids launched in Italy in the period between 2007 and 2019.
After a brief historical excursus on the genesis and evolution of the European and Italian frameworks, the study focuses on the characteristics of the participants in the offers and of the advisors who assist them; on the purposes for which takeover bids are promoted in Italy, with particular attention to the phenomenon of delisting; on the premiums, the acceptance rates, and the market performance of the target securities.
The survey, based on a proprietary database of over 20,000 data, although it covers all the offers launched in the period, focuses particularly on offers concerning shares. It shows that less than half of all those offers involve a change of control and only a small minority are hostile offers. In most cases, the offers included a delisting program, either as their own purpose (voluntary delisting offers launched by the controlling share-holder) or as an objective "associated" with the acquisition/change of control. The data show a recent upward trend in the incidence of delisting, which has gone from 50% to 90% in the last 5 years of analysis. These data seem interesting not because of their absolute value, but in consideration of the increased average size of the companies whose shares have been delisted and, secondly, of the circumstance that this tendency to delist occurred in a market phase that was essentially not negative. The average premium paid to shareholders is approximately 13%, with higher values in offers aimed at a business combination and in voluntary offers. The returns, both absolute and relative to the index, of the target shares are on average negative in the 12/36 months following the bid. Notably, the relative return is equal to -5.9% after 12 months and -6.8% after 3 years. Differentiating the results on the basis of the voluntary or mandatory nature of the offers, it can be seen that all the ex-post return configurations are significantly lower in the case of mandatory offers.
Without pretending to draw policy considerations or prospects for reform of the current regulations, the study proposes an analytical and objective framework that leaves, at the disposal of scholars, regulators and market operators, evidence potentially suitable for generating future research contributions.
Federico Picco - CONSOB, Commission Secretarial Office e (email@example.com)
Valeria Ponziani - Tor Vergata University, Rome - Law Department (firstname.lastname@example.org)
Gianfranco Trovatore - CONSOB, Head of Legal Studies Office (email@example.com)
Marco Ventoruzzo - Full Professor of Law at Bocconi University (firstname.lastname@example.org)
We thank Silvia Carbone for the useful suggestions and Tommaso Nicola Poli for the valuable collaboration. Chiara Muraca contributed significant-ly to the drafting of the paper. Errors and inaccuracies are attributable exclusively to the authors. The opinions expressed in the research are attributable exclusively to the authors and do not commit in any way the responsibility of Consob. In quoting this work, it is therefore not correct to attribute the opinions expressed therein to Consob.
JEL Classifications: G15, G18, G34, G38.
Keywords: corporate governance, tender offers, takeovers, financial markets, delisting
ISSN 2281-3098 [online]