Introduction

Generally, takeovers concerning Maltese companies involve closely knit companies not having their shares publicly traded on a regulated market. Furthermore, Maltese companies whose securities have been admitted to listing on a regulated market generally have a very concentrated ownership structure with a core shareholding held by one or more families traditionally at the forefront of entrepreneurial activity in Malta and public floats in most instances being in the region of 25 per cent of the company's total issued share capital.

Prior to 19 June 2006, when the provisions implementing the Takeover Directive were brought into effect, Malta had no particular takeover legislation. Accordingly, the Directive's transposition process demanded a new statutory framework in order to introduce new general principles into Maltese corporate law.

In view of the fact that the Listing Rules are applicable to companies whose financial instruments have been admitted to listing on a regulated market (the ‘listed companies’), the takeover rules were aptly introduced as a new Chapter 18 in the Listing Rules (‘Chapter 18’), with the exception of Article 10 of the Takeover Directive. The disclosure obligations found in Article 10 apply to all listed companies, irrespective of whether or not they are involved in a takeover bid. These rules were thus included under Chapter 8 of the Listing Rules, dealing with ‘Continuing Obligations’.

The applicability of Chapter 18

The takeover rules found in Chapter 18 of the Listing Rules apply in relation to takeover bids when all, or some, of the securities of a company which are the subject of a bid (the offeree company) are admitted to trading on a regulated market (Listing Rule 18.1).