EU Takeover Law and the Powerful Anti-Takeover Force of Supermajority

This paper seeks to offer a novel explanation of what affects control contestability in Continental Europe's listed firms, highlighting the powerful anti-takeover role played by supermajority in companies controlled by minority blockholders. The paper shows how the requirement of a supermajority at the shareholder meeting, coupled with the unavailability of large-scale squeeze-out rights and the substantial ineffectiveness of pro-takeover provisions such as the board-neutrality rule and the breakthrough rule, hinders hostile takeovers and secures blockholder control in those companies. The paper argues that such an outcome is fundamentally misguided and advances some reform proposals aimed at increasing control contestability in minority-controlled firms