1. The Swedish Implementation of the Takeover Directive Rolf Skog 2006 Rolf Skog

2. Sweden – Takeover Activity 1960 – 1990 • 1960s: 29 takeover bids • 1970s: 38 takeover bids • 1980s: 137 takeover bids • First ”hostile” bid 1979 • Approx 10% ”hostile bids” during the 1980s Rolf Skog

3. Sweden – Takeover Activity 1990 – 2004 • 358 Takeover bids • 293 Completed bids; 20 bids/year, 7% • Almost all bids voluntary, very few mandatory bids • Approx 10% ”hostile” bids • In 25 % a foreign bidder, increasing proportion Rolf Skog

4. Sweden – Takeover Activity 2005 • 15 Takeover bids • 10 Successful bids • 5 Unsuccessful bids (3 mandatory/2 voluntary) • 1 Large, ”hostile” bid: Old Mutual – Skandia • In 2/3 of the 15 bids a foreign bidder • (3 Mergers) Rolf Skog

5. Sweden – The Takeover Regulation • Public debate on takeovers in the late 1960´s • Takeover Code 1971 (UK role model) • Several revisions over the years, latest issue 2003 • Takeover Code included in the Stockholm Stock Exchange Listing Agreement (sanctions) • Securities Council (”Takeover Panel”) 1986 Rolf Skog

6. Sweden – The Takeover Code • All bidders, all companies listed in Sweden • ”Cash confirmation” • Press release, Offer document • Equal treatment of shareholders • Pre-, During-, Post-bid acquisitions • Board neutrality unless shareholder approval • Mandatory bid, 30 % • Squeeze out / Sell out (CA) Rolf Skog

7. Sweden – The Securities Council • Statements (written) and dispensation • Consultations • Approx 350 statements; majority on TO • In 2005 more than 50 statements • Speedy process; many statements within 24 h • No sanctions, except public censure • Sanctions by the Stock Exchange for listed bidders and targets Rolf Skog

8. Sweden – Implementation of the Directive • The Committee on Takeovers, set up by the Ministry of Justice in 2004 • Task: to put forward a proposal on form and substance • Report in June 2005 (”New Regulation of Public Takover-bids”) • Public consultation • Bill to Parliament April 2006 – Decision May 2006 Rolf Skog

9. Sweden – Implementation of the Directive Form Basic alternatives: • 1) Legislation • 2) Legislation and regulation by delegation • 3) Legislation, regulation by delegation and self-regulation Rolf Skog

10. Sweden – Implementation of the Directive Form - The ”success” of the self-regulatory system - Strong wish among market participants to keep as much as possible intact, especially the Securities Council. Rolf Skog

11. Sweden – Implementation of the Directive Form The Swedish Constitution No delegation of legislative power from the Parliament to the Government within the private law area (personal status of private subjects or their personal and economic interrelationships) Rolf Skog

12. Sweden – Implementation of the Directive Form • Combination of legislation and self-regulation • All marketplaces must, by law, have rules on takeovers • All bidders must, by law, agree to follow the takeover rules • Mandatory bid by law Rolf Skog

13. Sweden – Implementation of the Directive Competent Authority The Financial Supervisory Authority, with power to: • Monitor the marketplaces • Monitor bidders • Monitor mandatory bids • Dispensate from the mandatory bid and prohibition on defensive measures (delegation possible) Rolf Skog

14. Sweden – Implementation of the Directive Marketplaces • Must have rules on takeovers • Monitor bids (bidders, targets, advisors) • Interpret and dispensate from the rules (delegation possible) Rolf Skog

15. Sweden – Implementation of the Directive Securities Council • Continue on the basis of delegation from • Financial Supervisory Authority • Marketplaces • Interpretation • Dispensation Rolf Skog

16. Sweden – Implementation of the Directive Substance • Art 1 Scope of application – All bids on Swedish companies and foreign companies listed in Sweden • Art 2 Definitions – minor adjustments • Art 3 General principals – implement strictly Rolf Skog

17. Sweden – Implementation of the Directive Substance • Art 4 Supervisory authority and applicable law – Financial Supervisory Authority • Art 5 Protection of minority shareholders – Mandatory bid, 30 % votes, bidprice not less than highest price paid within 6 months Rolf Skog

18. Sweden – Implementation of the Directive Substance • Art 6 Information concerning bids – Pressrelease and offer document, minor adjustments • Art 7 Time allowed for acceptance – 3–10 weeks • Art 8 Disclosure – No amendments Rolf Skog

19. Sweden – Implementation of the Directive Substance • Art 9 Obligations of the target company board – Opt in, already in existence • Art 10 Information on ”control mechanisms” – Amendments to the Annual Accounts Act Rolf Skog

20. Sweden – Implementation of the Directive Substance • Art 11 Break through– Opt out, but amendments to the Sw Companies Act Compensation by the bidder to be decided by the GM • Art 12 Reciprocity - No Rolf Skog

21. Sweden – Implementation of the Directive Substance • Art 13 Other rules – No amendments • Art 14 Information to and consultation of employees – Amendments Rolf Skog

22. Sweden – Implementation of the Directive Substance • Art 15 Squeeze-out – No amendments • Art 16 Sell-out) – No amendments Rolf Skog

23. Sweden – Implementation of the Directive Substance Art 17 Sanctions – Mix of - Prohibition of bid, - Loss of voting rights, - Fine. Rolf Skog

24. Sweden – Implementation of the Directive Substance Art 21 Transposition – July 1, 2006 Rolf Skog