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French Takeover Update
Updated over a month ago

The French Takeover rules are concerned with three distinct thresholds. Persons are required to disclose daily transactions to the French Takeover Panel if they hold on their own or in concert

  • (a) at least 5% of the shares or voting rights in the target company;

  • (b) have acquired 1% or more of the shares of the target company since the beginning of the pre-offer period;

  • (c) any person or entity that has increased its holding of shares on its own or in concert by 2% or more of the target company since the beginning of the pre-offer period (or the beginning of the offer period if this one is preceded by a pre-offer period), or that already holds on its own or in concert at least 5% of the shares or voting rights in the target company and increases its holding during the pre-offer must report the objectives that it intends to pursue with regard to the ongoing takeover offer to the AMF.

In order to calculate the (b) 1% and (c) 2% change thresholds, FundApps needs an anchor point to determine your holding percentage on the day the French Takeover is effective for a particular issuer. Unfortunately, it is common practice for the French Takeover panel to add issuers to the takeover data set with a backdated effective date.

FundApps has introduced two rules that calculate the anchor position in a known or potential French Takeover issuer on a daily basis. The first rule, Takeover: France - Shares/Voting - Daily Results, will calculate your daily holdings in issuers that are on the French Takeover Panel and known to be effective at that time or have CountryOfRCARegulatedMarkets = 'FR,' which is used as a proxy for the universe of securities that could be on the takeover panel (but which are added later and backdated). The second rule Takeover: France - Shares/Voting - Lookup will use the effective date from the French Takeover data set to determine the anchor point - your holdings (as evaluated by the first rule) in an issuer on the date the issuer is effective on the takeover panel.

It is important to note that if the first rule does not evaluate for an issuer due to the Takeover Panel failing to add it on its effective date, the rule will conservatively default to 0, and any holding of 1% or 2% will be treated as an increase of 1% or 2% respectively. If you discover a security which the French Takeover Panel listed after its effective date (and backdated it) that was not picked up by the daily rule and would like to anchor that position (which was conservatively given a 0% default value as the anchor position) with its actual effective date, simply re-run your file for that given NAVdate (trade date) and subsequent NAV dates.

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