The debate on the fate of Telecom reopens ancient and abandoned problems on the functioning of our corporate control market on which it is important to reflect again. In particular the “Mucchetti motion”, approved by the Senate, commits the government to: 1) strengthen Consob's control powers in ascertaining the existence of situations of de facto control by individual shareholders or in concert with each other, in line with the decisions already taken by the Consob itself in similar cases; b) add to the fixed threshold of 30 percent, already envisaged for the mandatory takeover bid, a second threshold linked to the ascertained situation of de facto control.
The proposal appears as simple as its implementation is complex. It is worth remembering that in the more recent history of the corporate control market, the takeover bid phenomenon was a short-lived experience, limited to 1999. They contributed to the exceptional nature of the1999: takeover bid for Telecom, Banca Intesa for Banca Commerciale Italiana, and Assicurazioni Generali for Ina. In fact, the three takeover bids just mentioned exhausted the equivalent value of the offers that arose in 1999. And so after the events of 1999 this market vanished. For example, in 2012 (Consob 2012) the total value of takeover bids on listed companies slightly exceeded one billion euros (about 30 billion in 1999) and the total number of offers, equal to 7, was the minimum value since 1993.
On the other hand, it should be remembered in order to better understand the current situation, that during the privatizations, many "strong powers” preferred to take refuge in the domestic sector to provide public utility services protected from internal and international competition, such as publishing, airports, highways, telecommunications, catering, if anything also protected by the anti-takeover "special powers" attributed to the Ministry of the treasure. And so privatizations were not seized by private entrepreneurship to keep the Italian manufacturing industry in the place it held in Europe at the end of the eighties. But the spaces left empty by Italian investors were quickly filled by foreign buyers: between 1992 and 2000, out of about 40 divestments of companies sold with techniques other than placement on the market and for amounts exceeding one hundred billion lire, about half were sold to foreign buyers in the food, iron and steel, aluminum, chemical, mechanical, electromechanical, telecommunications, plant engineering sectors, etc. The receipts from the sales that led to the transfer of the controlling stake from public entities to foreign investors represented about a third of the total receipts from the sale of control.
Also because of the facts just mentioned the issue of the takeover bid fell into the pleased oblivion of many for many years. It should have been discussed in depth in 2007 during the examination by the Council of Ministers of the text of the legislative decree for the transposition of directive 2004/25/EC concerning takeover bids.
Allora I proposed to imitate the Spanish government of Zapatero and to abandon the 30 per cent threshold as the sole limit beyond which to trigger the mandatory takeover bid to complement it with a lower threshold (see The voice.info Dossier: the European takeover bid Edited by Francesco Vella 14-09-2007). Opponents of this abandonment objected that the market for ownership structures would have lost a condition of absolute certainty. Indeed, it was argued that entrusting Consob with the task of verifying when corporate control had changed (even below the 30 per cent threshold) to trigger the mandatory takeover bid would have subjected the market to a condition of uncertainty, also due to the feared appeals to the administrative courts which would follow this discretion of Consob.
Is this criticism still valid or does it appear outdated or surmountable? The answer lies with the legislator. As mentioned, the Spanish legislator had not decided so. The latter, in fact, concerned about the protection of minority shareholders, believed that the change in control that imposes the obligation to make a takeover bid always triggers when the 30 per cent threshold is exceeded, but also when a subject acquires a percentage lower than this threshold , if in the two years following the purchase the new controller had appointed more than half of the directors, also taking into account any directors already appointed prior to the purchase.
Perhaps it would be worth taking up again today Zapatero's proposal for the Telecom/Telefonica case. It would not be a retroactive rule conceived during construction but a reference framework for the next few years on which the new ownership structures should reflect.
In any case, a very difficult road to travel in Italy where Italian politics and entrepreneurial interests have always pushed in the opposite direction, increasingly distancing Italian legislation (Article 104 and following of the TUF) from the spirit of the 1998 Consolidated Law; so much so that the president of Consob at the time declared (2008) that "in Italy, changes to the regulations on takeover bids and significant shareholdings, made in a phase of dramatic market instability, have attenuated the high openness to control contestability, which characterized – more than in other European countries – the regulatory framework. Once the current emergency phase has passed, there may be time limits for those changes. In the long term, the cardinal principles of the Consolidated Law on Finance remain a solid point of reference”. (Consob, 2008. pp. 15-16). To date, the emergency still does not seem to be considered overcome, for the purpose of returning to the cardinal principles of the Consolidated Law.
Could the Telecom case, in order not to be considered a separate case for settling the accounts between Telecom and Telefonica, bring us back to the cardinal principles of the Consolidated Law, together with the second threshold for the mandatory takeover bid? But how would the economic and financial environment react to the spirit of 1998? Very bad, experience suggests.
A bitter prophecy advanced so that it will not be fulfilled: as a tribute to Telecom's Italian character, politics will pose obstacles to foreign investors; according to tradition, domestic entrepreneurship will be careful not to invest risk capital in the telecommunications sector, no longer protected from competition, appealing to the banks to provide debt capital; the Competition Authority will continue to favor the interests of consumers to the detriment of the profitability of businesses: the visible and saving hand of the new iri will appear under the guise of Cassa depositi e prestiti. Amen
