Collusion and Inequitable Prices in the EU Mandatory Bid Regime

This article examines the phenomenon of collusion in corporate acquisition transactions under the framework of the EU mandatory bid rule, focusing on avoidance practices that undermine the application of the highest price paid rule. Through a comparative analysis of landmark cases in France, Italy, and Germany, this study shows how collusive arrangements—often involving side contracts — enable acquirers to offer lower prices to minority shareholders, thereby undermining shareholder protection and distorting the efficiency of the market for corporate control. This article also assesses the adequacy of legal responses at both the EU and national levels in addressing these distortions, arguing that, to effectively restore an “equitable” price, supervisory authorities should take into account any additional benefits granted to the seller of the controlling stake. Compared to valuation methods based on allegedly “objective” criteria, this approach more effectively neutralizes the distorting effects of collusion and strengthens the deterrent function of the mandatory bid rule against inefficient acquisitions.