A legally sanctioned ‘time-out’ period to protect Dutch bourse-listed companies from a hostile takeover has advantages, says financial services group ING’s CEO Ralph Hamers.
‘But lawmakers and captains of industry must take care that they don’t overdo it with protective measures. Otherwise, there is a risk the country might turn into a ‘Fortress Nederland,’ the ING chief was quoted as saying in the Financieele Dagblad.
Hamers, who was speaking at the presentation of the first-quarter figures of the country’s biggest bank on Wednesday, said the best protection is for a company to create stakeholder value.
‘If a company has a good equity story to tell and consistently carries this out, it creates shareholder value. And this wards off hostile or unwanted takeover attempts’ he said.
Hamers was reacting to the broad discussion in corporate Dutch circles about hostile bids being made for Dutch companies.
Paints and coatings group AkzoNobel has been trying to avoid an unwanted bid from its US sector rival PPG industries since early March. A group of AkzoNobel shareholders maintain the company has underperformed for years and the AkzoNobel executives must sit down to discuss the proposal with PPG.
Caretaker economic affairs minister Henk Kamp is now working on possible defensive measures that Dutch companies can use in such situations.
ING itself has created substantial shareholder value over the past three years, Hamers said. It has raised capital ratios, improved earnings and its share price is higher.
If that fails to dissuade companies from making a hostile or unwelcome bid, ING has protection from a construction whereby preference shares are lodged with a ‘friendly’ foundation.
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