The decision with which Consob increased the price of Hitachi's takeover bid on Ansaldo STS by "only" €3 dates back to 0,39 February, a decision that Ansaldo STS´s shareholders understandably accepted without too much enthusiasm.
There was no margin for going further, said the sector Authority: the evaluations of the requesting shareholders, Bluebell and Amber, had erroneously been based on the consideration of a perimeter of the Ansaldo Breda business branch different from the one actually transferred and therefore did not take into account the maintenance of the debt position by Finmeccanica and other negative elements; and, furthermore and above all, the assessment had in any case to take place within the limits marked by «an "objective element" ... represented by the point of "equilibrium reached in the negotiation"» between Hitachi and Finmeccanica.
This was actually established by the Lazio TAR in 2014, with the sentence in which it rejected the appeal brought by Lauro61 against the Consob resolution to increase the price of the takeover bid launched in 2013 on the shares of the then listed Camfin. On that occasion, the administrative judges had specified that the Supervisory Authority must (limit itself to) "... adjust the price only to the extent corresponding to that actually "ascertained" on the basis of the elements that emerged during the investigation", because the reference regulatory framework to the "assessed price" would be preordained to "delimit [the] discretion of the sector Authority in replacing the price established ex imperio with that identified by the negotiating autonomy", so that "the price increase ordered by Consob "must be in any case calculated on the basis of an objective element, represented by the point of "equilibrium reached during the negotiation"".
But this implies - it is understood - that the assessment of the price agreed by a seller and a buyer who have colluded to conceal a more or less important portion should be carried out precisely on the basis of what results from the relative party documentation.
Now, although it cannot be ruled out a priori that in the Finmeccanica-Hitachi-Ansaldo case Consob may in any case have arrived at the identification of a truly "fair" consideration (and that the same could concretely also happen in similar future cases), the imposition of a such a penetrating "limit" to the action of the sector Authority is somewhat problematic. Apart from the merit of anticipating the scenario (in any case – all too easy to say – totally improbable) in which Via Giovanbattista Martini assumes the power to authoritatively define the conditions of exchange without any regard for the true values at stake, the interpretation proposed by the Regional Administrative Court (to which Consob deemed it necessary to promptly adapt, even though it could perhaps try to propose a different and more useful interpretation of the regulations in force in order to legitimize a full exercise of its prerogatives on the occasion of an event which, even abroad, saw as an important test) in fact results in a significant compression of the powers to ascertain the takeover bid price and therefore, in addition to a tempting invitation for the controlling shareholders to refine the avoidance techniques, in a debasement of the purposes of the regulation of mandatory takeover bids, of which the criteria for determining the consideration - in their current declination perhaps even open to criticism, but in any case in the lex lata state - represent a pillar carrier.
On the other hand, it is logical to believe that the assessment of the true price on which the agreement was formed between the two colluding parties should be as complete as possible and in any case should not encounter a limit precisely in the numbers referred to by the parties during the negotiation phase. The fact of collusion in itself deprives the buyer and seller estimates and related supporting documentation of any credibility; and requires the Supervisory Authority to proceed, consequently, with an autonomous determination of the value of the "co-sold" company, on the basis of which to then arrive, after calculating the value of the listed company by subtraction, to determine the true value attributed to the package control and finally the "new" takeover bid price.
According to the TAR, however, this is not the case: it is necessary to limit the discretion of the Supervisory Authority and it does not matter if this leads to the partial nullification of the only protection which minority shareholders certainly benefit from in these situations. As has already been said, in our legal system (also due to the inadequacies of the private enforcement apparatus) the effectiveness of the best price rule (art. 106, paragraph 2, TUF) depends mainly (if not, in fact, exclusively) on the intervention of the Sector authority. If Consob is now prevented from exercising its powers in a "full" way, the protection of external shareholders can only be partially: with the minority shareholders then in practice forced to settle for a consideration which, although higher than the price initially offered to them, may in practice not reflect the higher price paid by the purchaser of the control package.
It is therefore desirable that the "limits" that the administrative justice established in 2014 are removed as soon as possible. And since Hitachi has said it intends to challenge the legitimacy of the assessment in judicial proceedings, the TAR will soon have the opportunity to do so and thus "return" Consob´s “full” powers of assessment, in the (purely public, needless to say it again) interest of the market as such.
Interest that in cases of this kind does not differ from that (private) of some institutional investors extremely firm in defending their reasons and only therefore hastily branded as "vultures", but whose virtuous activism in events of this kind also serves to contain, among other things, the risk that one can too easily make fun of the inexperience of a multitude of micro-investors and thus avoid that, as unfortunately too often happened in the past, the latter suffer the unwitting expropriation of a part of their wealth.
