Are we likely to see a surge in delistings the Nordic region? The answer is yes for the right price, according to Anders Hansen partner at Osborne Clarke, specialising in transactions in the Nordic region. “It doesn’t make sense for certain companies to be listed anymore because the need for financing is not being fulfilled. Many companies would appreciate a more flexible environment than having to report every quarter,” he says. He predicts the Finnish and Norwegian markets will remain quiet as usual, but there will be more activity in Denmark and Sweden. Until now, Denmark, Norway and Sweden have seen the bulk of activity with Finland lagging behind. Angela Sormani reports.

In 2002, 16 companies delisted from the Danish stock exchange and in keeping with the slow pace of the exchanges in the rest of Europe, no new companies listed. This compares to 23 companies delisting in 2001 and five companies that managed an IPO. Hansen believes as many as 50 companies on the Danish exchange could benefit from a delisting. On the Danish stock exchange trading is roughly 30 per cent down compared to the same period last year.

One of the reasons such transactions have been rare in Denmark is the extremely high income tax rates (up to 68 per cent) which makes it difficult for management to gather sufficient funds to carry out a management buyout of a larger company.

Requirements for delisting in Denmark are also strict. A company can apply for a delisting, but it is up to the board of the stock exchange whether it will be granted permission. The board considers whether the delisting will be detrimental to the stock market, creditors or minority shareholders. Only if the acquirer has 100 per cent of the shares will it be allowed to delist as the board considers it would be violating the rights of the minority shareholders otherwise. But who are you violating if your shares are worth nothing, asks Hansen. He believes this is something that needs to change.

Jesper Rothe of Danish law firm Philip & Partners explains the Danish delisting rules: “The Danish rules regarding redemption of shares states that when a shareholder holds more than 90 per cent of the share capital and has a corresponding part of the voting rights, the majority shareholder and the board of directors can jointly decide that the remaining shareholders shall allow their share to be redeemed by the majority shareholder. The minority shareholders have an equal right to demand redemption.”

Anders Hansen says there is plenty of funding available for PTP transactions in Denmark. Around 75 per cent of M&A transactions taking place in the Danish market last year were private equity transactions, he says. “When companies want to raise money today it will be through private equity rather than the stock exchange. Companies are having to look at alternative measures to raise cash and private equity is very willing to be risk-taking.”

A company Hansen mentions that is looking to delist is DIY group Danske Traelast, which is said to be in negotiations with various private equity houses.


Last year eight companies delisted from the Helsinki stock exchange and three new companies listed. This compared to 10 delistings in 2001 and nine new companies coming to the market. As in Denmark and Norway requirements for delisting are strict and you need to control 100 per cent of the share capital in order for the stock exchange to accept a delisting. There is also a particularly strong focus on the protection of minority shareholders, says Anders Hansen, Osborne Clarke.

Regulation in Finland is not very elaborate. Many issues remain untested in practice or in the courts. Therefore general and broad principles of Finnish law are relied on. The relevant statutes are the Securities Market Act of 1989, the Limited Liability Company Act of 1978 and the Criminal Act 1999.

The Company Act regulates all companies whether they are listed or not. According to Section 14(19) the shareholder has an obligation and a right to demand redemption of all the remaining shares in the company if he/she holds over 90 per cent of the voting shares of the company.

Finland has an anomaly regarding the calculation of the bid offer. Nina Wilkman, at Finnish firm Borenius & Kemppinen, explains the pricing issue in Finland. “The redemption price is based on the average price paid for the security in public trading during the 12 months preceding the arising of the redemption duty, weighted by the volume of the trade as well as to any higher price paid by the party under the duty of redemption,” she says.

The price in redemption of minority shares according to Finnish company law is not connected with the price in the mandatory bid rule, which in Finland is at two thirds of the voting rights. Finnish company law stipulates that in determining the redemption price the arbitrators should take into account all relevant circumstances of each individual case. This means the redemption price can be higher than the price of the mandatory bid. “In practice we have had cases where the price has been higher than the price in the mandatory bid,” says Wilkman.

For this reason, says Leif Gustafsson of Baker Mckenzie, the Finnish market is not as buoyant for P2Ps as you might expect it to be. In fact only one private equity-backed P2P has been recorded since 1995, according to data from Thomson Financial. Stone, clay and glass products manufacturer Sanitec was taken private last year in a transaction backed by Pool Acquisition Helsinki Oy, a unit of BC Partners.


Norway’s stock market is small and Anders Hansen of Osborne Clarke does not predict huge PTP activity in 2003. In 2002, 15 companies were delisted from the exchange and six new companies listed. This compares to four companies delisting in 2001 and 13 new listings.

Is it difficult to delist in Norway? The Norwegian delisting rules are very similar to the Swedish ones, says Leif Gustafsson of Baker McKenzie. The mandatory bid obligation kicks in when the acquirer reaches a shareholding of 40 per cent in the target. When the acquirer has over 90 per cent of the voting shares in a Norwegian target, it may request a compulsory acquisition of the remaining shares from the minority shareholders


It is relatively easy to delist in Sweden, but the country has yet to see a boom in PTP transactions. In Sweden in 2002, 24 companies delisted and 16 came to the market, compared to 34 delistings in 2001 and 27 new listings. There is nothing holding back the market from a legal point of view, says Leif Gustafsson of Baker Mckenzie. “Last year there was quite a bit of interest from private equity houses in many of the listed companies, but nothing much came of it. There are plenty of opportunities, but nothing seems to emerge,” he says.

In Sweden when the acquirer has over 90 per cent of the voting shares in the target, the acquirer may request a compulsory acquisition of the remaining shares from the minority shareholders. The board of the company has to submit a request for de-listing and a board summary of the reasons for the request.

An amendment to the Swedish takeover code, which has been effective since March 1, is hoped will boost the market, says Gustafsson. The rules are now more rigorous and include stricter rules concerning due diligence and a time limit of five weeks to produce a prospectus for the offering. It is also compulsory to log and prove all the measures undertaken to take a company private.

The mandatory bid rules will remain at 40 per cent. If the acquiror has obtained a 40 per cent holding in a company then you must bid for the remaining 60 per cent. However, anything less than 40 per cent and this does not apply.

Gustafsson says: “What I do not like about these rules is that they do not contain a maximum time to complete the bid. The process could run on for a considerable time period. Unlike the City Code in the UK which has a six month time limit.” Another important development Gustafsson mentions is that the FSA in Sweden is bringing in stricter rules to “tidy up” the stock market with amendments to the listing rules and also concerning insider trading.