Italy to apply single 30% threshold for mandatory bids, draft shows

By Giuseppe Fonte and Elvira Pollina

ROME (Reuters) -Italy plans to apply a single 30% threshold for mandatory takeover bids in listed companies, removing a lower threshold for larger companies, a draft decree seen by Reuters showed on Wednesday, part of a wider reform of the country's decades-old financial code.

Mandatory bids currently need to be launched by a shareholder whose stake rises above a 25% threshold in large companies, in the absence of another shareholder with a higher shareholding.

A second 30% threshold is in force for small and medium-sized enterprises. Italy classifies a company as an SME when its capitalisation is below 1 billion euros ($1.16 billion).

The draft decree, which confirms a Reuters report in April, sets a single 30% threshold regardless of company size.

The move could have significant implications for some firms such as Telecom Italia (TIM), in which state-backed financial conglomerate Poste Italiane is the No.1 investor with a 24.8% stake.

Poste could buy additional TIM shares without making a buyout offer, strengthening its hold on TIM, two sources familiar with the matter told Reuters.

Among several other measures, Rome plans to cut the period to be taken into account when calculating the takeover bid price to six months from 12 months.

Market watchdog Consob will also be able to set a deadline by which a potential bidder must disclose its decision to launch a bid. If a bidder does not respond, or responds negatively, it will be prohibited from pursuing a bid for the following 12 months.

The decree is expected to be approved by the cabinet later on Wednesday, a government official said.

Prime Minister Giorgia Meloni's administration has said it aims to reform Italy's financial law after consultation with various stakeholders and industry bodies, as it looks for ways to reinforce the role of the 200-year-old Borsa Italiana.

Marking a U-turn from decades of policies favouring corporate takeovers, Meloni has tried to encourage business owners to list their firms in Milan without worrying about losing control to others.

Asset managers including large foreign funds, on the other hand, usually advocate rules preventing a concentration of power in the hands of a few.

Last year, multiple representatives of Italy's financial industry voiced concerns over a government measure that gave investors a bigger say over how companies' outgoing boards present a list of candidates for the next term.

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(Reporting by Giuseppe Fonte in Rome and Elvira Pollina in Milan, editing by Giulia Segreti and Lincoln Feast.)