Protection of Minority Shareholders’ Interests Beyond the Mandatory Bid: European Union and Lithuania’s Practice

Vytautas Šenavičius


This article analyses the efficiency of the minor shareholders’ protection beyond the mandatory bid. The article aims to identify and analyse the effectiveness of minority shareholders’ protection under the case-law of the European Court of Justice and also the Lithuanian court practice.
As laid down in Directive 2004/25/EC, if a natural or legal person acquires a specified percentage of voting rights in the company (the issuer), which gives him a certain degree of control of the company, this person must announce and implement a mandatory takeover bid to protect the minority shareholder rights. The aim of the said obligation is to protect the shareholders’ interests. However, the clause of the abovementioned Directive may not ensure that the protection of minority shareholders is efficient within the EU. One can see that the implementation of Directive 2004/25/EC is different from country to country due to the Member States’ discretion to opt out of particular clauses (breakthrough rule, neutrality rule, reciprocity) of the said Directive. Therefore, a scientific discussion is ongoing within the EU that raises the question of whether the waivers of Directive 2004/25/EC lead to the lack of minority shareholder protection.
In this article, we also analyse the judgment of the European Court of Justice in Audiolux case and its potential outcomes (the said Court put it clearly that the protection of minority shareholders is not the general principle of the European Union). Also, we emphasise that the regulation of mandatory bid does not protect minority shareholders in Lithuania, and raise its main regulatory problems. The supervisory institution should make all efforts to fulfil its obligation to protect the minority shareholders’ rights in the mandatory bid procedure, and, secondly, where the major shareholder deliberately rejects to make the mandatory bid, the sanctions that are imposed for the infringement of the laws are not effective.


takeover bid; regulation of takeovers; protection of minority shareholders

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"Societal studies" ISSN online 2029-2244 / ISSN print 2029-2236