31 October 2018

ESMA publishes the responses to its Consultation on the draft technical advice on minimum information content for prospectus exemption

European Savings and Retail Banking Group

Although ESRBG sees the reasoning behind the explanation provided in the consultation paper, it is of the opinion that national regimes already require the information to be provided in the different mergers and alike transactions, including the reverse acquisitions. In fact, shareholders (investors) of both companies need to approve and understand the transaction at a corporate level, so it does not endorse the necessity to provide further explanation in these transactions (which have complexity from an accounting perspective, but not necessarily globally).

Full ESRBG response

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EuropeanIssuers

EuropeanIssuers welcome ESMA’s consultation and would like to insist on the following point : it disagrees with ESMA’s approach to consider, as starting point, the disclosure requirements for prospectuses. The starting point should be the information required by the takeover bid and company law directives and made public by issuers in case of a takeover by way of exchange offer, a merger or a division, supplemented where necessary by additional information regarding the transaction and its impact in order to allow shareholders of the companies concerned to take an informed decision. Furthermore, the content of the Exempted Document should not be similar or equal to the content of a full prospectus. EuropeanIssuers are therefore putting forward, in annexes 1 and 2, two proposals for the minimum content of the Exempted Document.

Full EuropeanIssuers response

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De Brauw Blackstone Westbroek

As a general comment, De Brauw Blackstone Westbroekwould like to note that it would indeed be very helpful to harmonise the minimum information content required for an Exempted Document to qualify for the exemption from the obligation to publish a prospectus. Preparing a prospectus is a burdensome, costly and time consuming process for an issuer. As such, being able to rely on an Exempted Document can be very valuable to issuers, in particular if that Exempted Document can be based predominantly on information an issuer is already required to disclose, e.g. because of requirements following from the Takeover Directive. However, the way the technical advice is currently drafted leaves few material differences between an Exempted Document and a full-fledged prospectus. De Brauw Blackstone Westbroek would have hoped that the Exempted Document regime would provide for a substantially lighter regime than the prospectus regime. De Brauw Blackstone Westbroekfears that with the very limited differences on the information to be included in either a prospectus or Exempted Document, issuers will likely take the safe route and opt for an voluntary prospectus approved by the Competent Authority. As a result, it does not see the exemption as likely to be relied on in practice. As a possibility to make the Exempted Document regime a lighter regime, ESMA could consider, to the extent the issuer and target are already admitted to trading on a regulated market or to an SME Growth Market, to exclusively include information on the takeover, merger or division and its impact on the issuer after the transaction in the Exempted Document, and thus not include the information provided in Appendix I and III. Such information is essentially already available to the market.

Full De Brauw Blackstone Westbroek response

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Full consultation paper

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