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Company Law Reform Bill [HL]

moved Amendment No. A158:"Page 309, line 3, leave out subsection (3)." The noble Lord said: In moving the amendment I will speak also to Amendments Nos. A159, A160 and A161. Amendments Nos. A158 and A159 are designed to remove a provision that, again on the advice of the Law Society, we do not believe correctly implements the takeovers directive, and to highlight the need for an adequate provision to be drafted in its place. Clause 641 is one of the provisions implementing—at least in part—Articles 11 and 12 of the takeovers directive. As it currently stands, the clause needs to be redrafted properly to implement the takeovers directive. Article 12 of the directive provides that member states must allow companies to opt-in so that they are subject to the provisions of Article 11 if they wish. It does not allow member states to make this right subject to conditions, which Clause 641 does. The takeovers directive allows a company to opt in to the provisions of Article 11 on the basis that if the company becomes subject to a successful takeover bid, the successful bidder would pay compensation to a target shareholder whose special rights are overridden in accordance with Article 11. Clause 641 would not give sufficient flexibility to allow this. We are concerned that the takeovers directive will not be validly implemented without the provision being redrafted and consequential changes to the compensation provisions. Amendment No. A160 and A161 in Clause 642 also seek to clarify the drafting and to bring this clause into line with the requirements of the takeovers directive. Clause 642 prescribes the date that opting-in and opting-out resolutions will take effect. The first amendment, therefore, is consequential to the amendments I have just outlined to Clause 641. The second amendment is purely of a clarificatory nature. Where the clause currently states,"““the first one””," it would be clearer if it stated,"““the first condition””." I beg to move.