Italy may compensate firms hit by anti-takeover powers, sources say

Locality Planning Energy Holdings

10/12/2021 14:06

* PM Draghi has vetoed three Chinese takeovers this year
    * Government wants to reduce risk of legal disputes
    * Italian firm sued govt after it blocked takeover by
Shenzhen

    By Giuseppe Fonte
    ROME, Dec 10 (Reuters) - Italy is considering offering
compensation to firms penalised by the use of its anti-takeover
powers, two government officials said, in a move intended to
reduce the risk of legal disputes.
    Prime Minister Mario Draghi has repeatedly used the
so-called "golden powers" since he came to office in February to
prevent Chinese investors buying controlling stakes in companies
deemed strategically important.
    Following one of these cases, LPE, a Milan-based producer of
semi-conductor equipment, appealed to an administrative court
after the government in April prevented it from being acquired
by Chinese company Shenzhen Invenland Holdings Co. Ltd.
    The idea of offering financial redress is aimed at limiting
recourse to the courts and helping the government defend itself
against allegations it is depriving shareholders of their
rights, said the sources, who asked not to be named.
    The proposal, which has yet to be finalised, was tabled by
Industry Minister Giancarlo Giorgetti, one of the sources said.
    The anti-takeover legislation is normally used to ward off
undesired bids in industries such as telecoms, semiconductors,
banking and energy.
    Italy has used it five times since the golden powers were
introduced in 2012. Four of these episodes beat away Chinese
bids and three have been under Draghi's ten-month old
government.  urn:newsml:reuters.com:*:nL8N2SE559
    The first hearing in LPE's case is scheduled for July 2022,
one source said, adding Shenzhen would participate as a
co-plaintiff.
    Another court case could arise from Draghi's most recent use
of the golden powers in November, a third source said.
    This episode saw Rome block an attempted joint venture
between Zhejiang Jingsheng Mechanical  300316.SZ  and the Hong
Kong arm of Applied Materials  AMAT.O  to buy the U.S.-based
group's screen printing equipment business in Italy.
    The source said Applied Materials' Italian unit may launch
action against the government, as it deems the deal important
for increasing its market share in China.
    LPE declined to comment, while Applied Materials said it
would not comment on talks with regulatory authorities.

 (Editing by Gavin Jones and Mark Potter)
 ((giuseppe.fonte@thomsonreuters.com; +390680307711;))