On 8 July 2008, the Netherlands Authority for the Financial Markets (AFM) imposed an administrative fine of € 24,000 on French company Groupe Danone S.A. (Danone) for failing to publish price-sensitive information on time.
On 9 July 2007, Danone failed to make a timely public announcement on the basis of the rules on takeover bids within the context of its public offer for Numico. This means that Danone violated the then applicable Section 9b of the Securities Transactions (Supervision) Decree 1995 (Bte 1995).
Danone submitted an objection and an appeal against the fine. The Rotterdam District Court subsequently ruled on appeal that the fine had been imposed incorrectly. The AFM submitted an appeal against this decision to the Trade and Industry Appeals Tribunal (CBb). The CBb set aside the decision of the Rotterdam District Court on 28 June 2013, and declared Danone's appeal against the fine unfounded.
In 2007, French food group Danone made a takeover bid for the Dutch listed company Numico. The parties were conducting takeover negotiations by the middle of 2007. On 9 July 2007 the AFM observed a remarkable increase in the price of Numico shares, which increased from well over 2% to well over 11% later than day. There was also a remarkably high volume of trade in Numico shares.
The AFM imposed a fine of € 24,000 on Danone, because it had failed to publish price-sensitive information about the public offer in due time. The AFM was of the opinion that the takeover negotiations on 9 July 2007, the price and volume development of Numico shares, and the rumours in the market should have been reason for both parties to inform the market.
The obligation of listed companies to publish price-sensitive information is of great importance, in order to guarantee that all relevant information is provided to investors in due time. The rules on takeover bids applicable at the time (Section 9b, second paragraph at c, Bte 1995) provides that a press release must be published without delay in the event of price-setting or another development that could indicate that negotiations about a public offer, or the unilateral intention to make a public offer, is known to third parties who are able to use this knowledge. This obligation also applies under the current rules on takeover bids, for both the target company and the bidder.
The AFM's decision to impose a fine and its decision on the objection became final as a result of the CBb decision, and can no longer be submitted to the courts for review by interested parties.
If you have any questions or comments you can contact the Financial Markets Information Line on: 0800-5400 540 (no charge).
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