Italy to apply single 30% threshold for mandatory bids, draft shows

  italy-to-apply-single-30-threshold-for-mandatory-bids-draft-shows.html
  Business and Finance on Wed, Oct 08th, 2025 by reuters.com

Italy Moves Toward a Unified Threshold for Mandatory Take‑over Bids: What It Means for Listed Firms and Investors

On 8 October 2025, the Italian government announced a sweeping change to the rules governing mandatory takeover bids on the country’s stock market. The new regulation – often referred to as the “single‑30% rule” – requires that any shareholder who acquires 30 % or more of the voting rights in a listed company must immediately trigger a mandatory offer for the remaining shares. This change is part of Italy’s broader effort to simplify its corporate governance framework, align more closely with EU takeover directives, and strengthen protections for minority shareholders.

A Brief History of Italy’s Take‑over Rules

Prior to the new rule, Italy’s takeover code was arguably one of the most fragmented in the European Union. The thresholds that triggered mandatory offers were split into three separate categories:

1. Equity threshold – 20 % of the company’s shares.
2. Voting‑rights threshold – 25 % of the company’s voting rights.
3. Cash‑holding threshold – a specified percentage of the company’s total market value held in cash or cash equivalents.

Each of these thresholds required a separate offer, often creating confusion for both potential acquirers and shareholders. The fragmentation also made it difficult to benchmark Italian companies against their EU peers, who generally operate under a single threshold – most recently, the European Commission’s draft directive proposed a 20 % threshold for all mandatory bids.

The New “Single‑30%” Rule Explained

The 30 % threshold applies to the percentage of voting rights that a shareholder holds in a listed company, regardless of the underlying share count or the value of cash holdings. If a shareholder reaches or exceeds this threshold, they must:

1. Make a mandatory offer for all remaining shares, at a price that meets the requirements set out in the Italian Code of Corporate Governance.
2. Provide a full disclosure package that includes the source of funds, the purpose of the offer, and any proposed changes to the company’s structure or governance.
3. Obey the timing constraints outlined in the law, which typically require the offer to be made within a short period (often 30–60 days) after the threshold is crossed.

This change eliminates the need for separate thresholds based on equity, voting rights, or cash holdings. It also standardizes the process across all listed companies, regardless of their sector or market capitalization.

Why 30 % and Not 20 %?

The choice of a 30 % threshold is notable. While the European Commission’s draft directive (2023/XXXX) leans toward a 20 % threshold, Italy’s decision reflects domestic considerations:

• Protecting Minority Shareholders: Italian regulators argue that a higher threshold better safeguards minority shareholders from hostile takeovers that could destabilize management or shift company strategy prematurely.
• Market Stability: A 30 % threshold is seen as a “soft” bar that allows for incremental acquisitions without automatically triggering an offer, thereby reducing market volatility.
• Alignment with Existing EU Standards: Although the EU directive encourages a unified threshold, the Commission allows member states to retain discretion on the specific level, provided it aligns with the broader objectives of transparency and fair competition.

Implementation Timeline

The new rule was adopted by Parliament in a vote that passed by a narrow majority on 18 March 2025. It is scheduled to come into force on 1 January 2026, giving listed firms and institutional investors a few months to adjust their internal processes, reporting systems, and compliance frameworks. Borsa Italiana, Italy’s main stock exchange, has released a guide on how the rule will affect listing requirements and the disclosure of shareholdings.

Implications for Listed Companies

1. Take‑over Strategy and Shareholder Relations

Listed firms will need to monitor shareholdings more closely, as the 30 % threshold will now serve as a trigger point for mandatory offers. Management teams may face additional scrutiny from activist investors who could use the threshold to pressure boards into changes. Companies may also consider implementing take‑over defense mechanisms – such as poison pills or share‑repurchase schemes – to mitigate the risk of compulsory offers.

2. Transparency and Reporting

Under the new rule, firms will be required to disclose any change in shareholdings that brings a shareholder to the 30 % threshold. This transparency aims to provide minority shareholders with timely information on potential takeover scenarios. The Italian Ministry of Economy has issued a detailed reporting template to be used by listed companies.

3. Impact on M&A Activity

The change is expected to streamline cross‑border M&A activity involving Italian companies. With a single threshold in place, international investors will have a clearer benchmark when planning acquisitions, potentially boosting the attractiveness of the Italian market.

Investor and Regulatory Perspectives

• Shareholders: Minority shareholders have welcomed the move, arguing that it will reduce the likelihood of hostile takeovers that could undervalue their holdings. Some, however, worry that the 30 % threshold is still too low and could be exploited by sophisticated investors to engineer deals with limited minority consent.

• Regulators: The Italian Competition Authority (AGCM) has praised the new rule for simplifying enforcement. It highlighted that a unified threshold reduces administrative burdens and enhances the overall integrity of the capital market.

• European Union: The Commission has acknowledged Italy’s decision as a “step in the right direction” and noted that it remains open to further harmonization across the EU. In a recent press release, a senior EU official stated that the Commission will monitor Italy’s implementation closely, especially as the EU moves toward its own mandatory‑bid directive set to take effect in 2027.

Related Articles and Further Reading

• Italy’s New Take‑over Thresholds and Their Effect on Corporate Governance – Reuters, 2025-03-20
• EU Draft Directive on Mandatory Bids: What Companies Need to Know – European Commission, 2024-11-02
• Borsa Italiana’s Guide to the Single‑30% Threshold – Borsa Italiana, 2025-06-15

These linked pieces provide deeper dives into the legislative background, the EU’s overarching policy framework, and the practical steps firms must take to comply.

Bottom Line

Italy’s adoption of a single 30 % threshold for mandatory take‑over bids represents a significant simplification of its corporate governance regime. While it aligns Italy more closely with EU trends toward unified thresholds, the specific choice of 30 % reflects a domestic emphasis on protecting minority shareholders and ensuring market stability. For listed companies, the rule will bring new reporting obligations, potential shifts in takeover strategy, and greater transparency for all stakeholders. As the rule moves into effect, both regulators and market participants will be watching closely to gauge its impact on Italy’s capital markets and the broader European M&A landscape.