Belgian legislation contains mandatory provisions that trigger the launching of public bids in well defined circumstances.

Article 41 of the Royal Decree of November 8, 1989 regulating takeover bids and changes of company control states that where exclusive or joint control of a public company is acquired other than by means of a takeover bid and where the price paid for such acquisition conferring control exceeds the market price, the buyer of the controlling interest must offer to purchase the shares of all shareholders of the target company at the same price per share as was paid to obtain control of the company.

A public bid must therefore be launched when:
-	the company at hand is a public company (this refers 
	to listed companies, companies having more than fifty 
	shareholders, companies which have bonds distributed 
	among the public,...);
	
-	one or more persons have acquired a shareholding giving 
	it or them joint or exclusive control of that company; and
	
-	the price paid for such controlling shareholding exceeds 
	the market price (in other words, that a control premium 
	has been paid).
The Belgian Court of Cassation has recently held that article 41 of the Royal Decree of November 8, 1989 constitutes a civil private right vested in each shareholder. As Belgian courts have a general competence over disputes related to civil private rights, the right of any shareholder under article 41 is subject to judicial review and enforcement.

Recent cases have shown that shareholders have successfully litigated in Belgian courts and obtained enforcement of their right under article 41. In such cases where the conditions of article 41 were met, these shareholders were indemnified by the purchase of their shares for the price paid by the controlling shareholders to obtain such control or by the allowance of compensatory damages being calculated on the difference between the price paid by the controlling shareholders and the price received by the claiming shareholders if the latter sold its shares.

Other litigations based on article 41 are still pending before the Commercial Court of Brussels.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

For further information contact Thierry Lohest on + 32.2. 517.94.09.