EU Parliament Rejects Plan for Takeover Code

The European Parliament rejected proposals for a pan-European code on corporate takeovers, leaving Europe without common rules after 12 years of debate.

The European Commission, the European Union’s executive arm, will have to redraft the legislation, which may take years.

The code was meant to remove stumbling blocks for the creation of a common market for financial services, whose deadline for 2005 now is in doubt.

The code would have aligned takeover rules across the 15-nation bloc and given shareholders a bigger role in deciding the fate of a company targeted by a bid.

But a controversial article requiring management to consult shareholders before enacting defensive or “poison pill” measures drew strong criticism from Germany, which felt it would make its companies more vulnerable to foreign bids.