Italy to Impose Single 30% Cap on Mandatory Takeover Bids, Draft Order Shows

Italy plans to impose a single 30% cap on mandatory takeover bids for listed companies, while removing the lower threshold for large firms, according to a draft order released to Reuters on Wednesday. The move is part of a broad overhaul of the country’s decades-old financial regulations.

Currently, mandatory bids must be launched by any shareholder whose stake exceeds the 25% threshold in a large company, provided no other shareholder holds a higher stake.

A separate 30% threshold applies to small and medium-sized enterprises (SMEs), which Italy defines as companies with a market capitalization below €1 billion ($1.16 billion).

The draft order, which confirms a Reuters report from April, establishes a single 30% cap regardless of company size.

The measure could significantly impact companies such as Telecom Italia (TIM) (TLIT.MI), where the state-owned financial group Poste Italiane (PST.MI) is the largest investor with a 24.8% stake.

Two sources familiar with the matter told Reuters that Poste could acquire additional shares in TIM without launching a formal bid, strengthening its control over the company.

Among other measures, Rome also plans to reduce the reference period for calculating the takeover bid price from 12 months to six months.

The market regulator, Consob, would also be able to set a deadline by which a potential bidder must disclose their decision to launch a bid. If a bidder fails to respond or gives a negative response, they would be barred from making a bid for the following 12 months.

A government official said the order is expected to be approved by the cabinet later on Wednesday.

Prime Minister Giorgia Meloni’s administration has emphasized that it wants to reform Italy’s financial laws after consulting with various stakeholders and industry groups, aiming to strengthen the role of the 200-year-old Borsa Italiana.

Reversing decades-old policies that favored corporate takeovers, Meloni has sought to encourage business owners to list their companies on the stock exchange without fear of losing control to third parties.

At the same time, asset managers, including large foreign funds, generally advocate rules that prevent power from becoming concentrated in the hands of a few.

Last year, representatives from Italy’s financial industry raised concerns over a government measure that gave investors greater influence over how companies’ outgoing boards present candidate lists for the next term.

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