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Shareholder activism is a hot topic in many Dutch boardrooms. In recent years, several activist campaigns aimed at Dutch multinationals made headlines in the Netherlands, as well as abroad, including in particular the campaigns of Elliott Advisors against AkzoNobel, NXP, NN Group and AholdDelhaize. Aside from public campaigns, private discussions between boards and shareholders on matters such as strategy, capital returns, executive compensation and environmental, social and governance (ESG) matters, including diversity, have become increasingly common and will continue to dominate the agendas within Dutch listed companies. In line with global trends, we have also seen a rise of shareholder activism in M&A situations in the past decade. The combination of record-breaking levels of M&A activity around the globe and the stock price volatility many listed companies were confronted with since the outbreak of the covid-19 pandemic has increased the level of shareholder activism in M&A situations in recent years. The most recent trend is the increased focus of shareholders on ESG matters, in particular with respect to climate change. Several Dutch listed companies are confronted with action groups using their shareholder rights to force listed companies to amend their policies on preventing or slowing down climate change, or to at least trigger a public debate.

Aside from shareholder activism, we have also witnessed a global wave of increased protectionism in the past decade. In the Netherlands, this development was partly fuelled by numerous (unsuccessful) hostile approaches in recent years, including for PostNL, Unilever and AkzoNobel, after which both the general public and the government called for increased protection of (certain) Dutch companies. In 2021, we saw that legislation came into force in this respect.

This chapter gives an overview of the Dutch regulatory and legal framework in which listed companies and their shareholders operate, points out the key trends concerning shareholder activism in the Dutch market, and zooms in on a few topical battles between companies and activist shareholders.

Legal and regulatory framework

i Primary sources of law, regulation and practiceDutch Civil Code

Book 2 of the Dutch Civil Code (DCC) is the primary source of law with regard to Dutch corporate law. As such, the DCC also covers the rights and duties of, and the division of powers between, the boards and the general meeting of shareholders.

Dutch Corporate Governance Code

The Dutch Corporate Governance Code complements the DCC, as it lays down principles and best practice provisions that regulate the relationship between the boards and the general meeting. The Corporate Governance Code focuses on long-term value creation for the company and its business, as well as culture. This fits into the Dutch stakeholder model of corporate governance and can be an important element for companies in encounters with activist shareholders. The Corporate Governance Code applies, in principle, to all Dutch listed companies on a comply-or-explain basis.2 The Dutch Corporate Governance Code is currently being revisited.

Dutch Financial Markets Supervision Act and the Market Abuse Directive

The Dutch Financial Markets Supervision Act (FMSA) contains, among other things, disclosure obligations for listed companies, major shareholders and board members, and rules on takeovers of listed companies. The FMSA has implemented numerous EU directives, such as the Transparency and the Takeover Directives. In 2016, several market abuse provisions were removed from the FMSA, and are now dealt with in the Market Abuse Regulation, which has a direct effect in all EU Member States.

EU Shareholder Rights Directive

In 2017, the European Council adopted a revised version of the EU Shareholder Rights Directive.3 The Dutch bill implementing the revised EU Shareholder Rights Directive entered into force at the end of 2019. The new rules on remuneration and related party transactions are effective as of 1 December 2019. The provisions relating to electronic voting, shareholder identification and transmission of information to shareholders took effect on 3 September 2020. A remuneration policy needs to be in place for the executive and supervisory boards and must be approved by the general meeting at least every four years. The general meeting has an annual advisory vote on the remuneration report. In addition, material related party transactions require the approval of the supervisory board and are subject to increased transparency requirements. Investors have to be transparent how they invest and how they engage with companies they invest in.

Dutch Stewardship Code

Dutch pension funds, insurers and asset managers published the first Dutch Stewardship Code in July 2018.4 The Stewardship Code sets forth certain principles on institutional shareholder engagement, which, among other things, are aimed at stimulating institutional investors to cast informed votes at shareholder meetings, engaging with listed companies on strategy, performance and ESG topics, and being transparent on its voting policy and history. From financial year 2019 onwards, asset owners and asset managers are expected to apply the Code's principles and to report on its implementation.

ii Division of powers – roles of the executive and supervisory boards, and the general meeting

Dutch law gives companies the option to structure their boards based on a one-tier model (single board with both executive and non-executive board members) or a two-tier model (separate executive and supervisory boards). Most Dutch public limited liability companies with a listing on the Amsterdam Stock Exchange have a two-tier board.5 In a two-tier board, the roles of the main corporate bodies can be summarised as follows.

The executive board manages the company and is in charge of the company's aims, strategy, risk profile, results and corporate social responsibility issues. It is accountable to the supervisory board and the general meeting of shareholders.

The supervisory board is charged with supervising and advising the executive board. It has certain rights regarding the appointment, suspension and dismissal of executive board members, and the approval of the supervisory board is required for certain important resolutions. It is accountable to the general meeting.

The general meeting monitors the performance of the executive and supervisory boards, and can exercise the rights vested upon it by the DCC and the company's articles of association. For example, a decision of the general meeting is needed for resolutions concerning an issuance of shares, dissolution of the company, adoption of the annual accounts, board compensation or amendment of the company's articles of association. Transactions regarding an important change in the company's identity or character (e.g., sale of a large division) require prior approval of the general meeting. The general meeting also has the power to appoint or dismiss board members, although Dutch companies may deviate from this principle in the articles of association. The vast majority of Dutch listed companies have limited the power of the general meeting to appoint and dismiss board members, by providing that the appointment or dismissal occurs only upon a (binding) proposal from the executive or supervisory board, or can only be taken with an increased majority requirement.

iii Stakeholder model as the guiding principle for a company's boards

The executive and supervisory boards must always act in the best interests of a company and all its stakeholders, with a focus on long-term value creation. In practice, this means that Dutch boards have a fiduciary duty towards a wide range of stakeholders, including shareholders, employees, customers and suppliers, as well as the communities in which the company operates. This is in contrast with the shareholder model of corporate governance, in which a company's main interest is to promote shareholder value, which is the predominant model in jurisdictions with an Anglo-Saxon legal tradition. Yet, in recent years, in these jurisdictions there is a debate around the role of a company and its purpose in modern-day society, in particular if companies, asset managers and asset owners should commit to sustainable long-term investment.6

The Dutch stakeholder model also applies in takeover and activist situations, as was confirmed in the case of Elliott Advisors v. AkzoNobel (see Section IV.ii).

iv Toolboxes of activist shareholders and companies The activist shareholder's toolbox

The following are tools that activist shareholders commonly use in pursuing their agenda, either alone or, for example, together with other activist shareholders, forming a 'wolf pack':

  1. private discussions and engagement with the company;
  2. public engagement with the company;
  3. stake building;
  4. right to participate in and vote at the general meeting;
  5. right to place an item on the agenda;
  6. right to convene a meeting; and
  7. initiate litigation.
Private discussions and engagement with the company

The vast majority of shareholder activism starts with the activist engaging with the boards of the company in a private setting. This could take the form of informal one-on-one discussions or inbound calls to the company's CEO or chair to discuss strategy and measures to maximise shareholder value, or more formal communication by sending private 'Dear Board' letters.

Companies experiencing this form of shareholder activism are often faced with the question whether they should engage in a dialogue with the activist about their demands or take a more defensive approach by rejecting their demands, which is likely to trigger the activist initiating a public campaign. A private dialogue between a company and an activist shareholder can be very intensive and drag on for months. To get detailed information from the company regarding the topics targeted in their campaigns, activists will often seek to conclude a confidentiality agreement. In order to induce the targeted company to provide such information and enter into a confidentiality agreement, the activist may agree to refrain from initiating a public campaign during the duration of the discussions. While this form of activism may appear 'friendly' from a distance, it may from time to time become as aggressive as the more well-known public activist campaigns.

Public engagement with the company

Where a shareholder activist is dissatisfied with the company's response to issues raised in private discussions, starting a public campaign may be an alternative strategy to realise its agenda. Typically, this includes the use of traditional and social media, teaming up with other shareholders and institutional investors, and gaining support from the investor community at large by publishing investor presentations or setting up websites dedicated to the activist campaign.

In the Netherlands, there have been numerous public campaigns by activist shareholders. Prominent recent examples are the campaigns of Elliott Advisors, the British arm of Paul Singer's US hedge fund, against AkzoNobel in the context of an unsolicited approach from US paint producer PPG Industries, and against NN Group claiming that the company is undervalued and should reset its trajectory.

Stake building

For an activist shareholder to ramp up the pressure on the company's boards, building a significant stake may be a critical element in its strategy. Stake building may enable an activist shareholder to add weight to its opinions and to be taken as a serious threat by the company, especially when the activist shareholder reaches the threshold for placing items on the agenda of the general meeting or for convening a general meeting (see below). Even with a small 'toehold' stake (e.g., 1–3 per cent), an activist shareholder may have significant influence. In some events, the mere fact that a typical activist shareholder has acquired a stake may push the targeted company to critically review its performance and strategic options to avoid a (public) activist campaign.

When buying shares, the activist shareholder must observe the rules on disclosure of substantial shareholdings. Pursuant to the FMSA, a shareholder must immediately notify the Netherlands Authority for the Financial Markets (AFM) if its percentage of capital interest or voting rights exceeds (or falls below) a number of specific thresholds. Currently, the thresholds are 3, 5, 10, 15, 20, 25, 30, 40, 50, 60, 75 and 95 per cent.7 A possible new development in this context is the intention of the Cabinet to introduce a new threshold of 2 per cent. The Cabinet is of the opinion that the introduction of such threshold could contribute to long-term value creation by listed companies and preserve a stable shareholder base. A draft bill is currently under consultation.

An activist shareholder building up its stake or partnering with other large shareholders should also be aware of the mandatory offer rules. Under the FMSA, a mandatory offer is triggered by a person, or by a group of persons acting in concert, acquiring 'predominant control' (at least 30 per cent of voting rights).8

Right to participate in and exercise right to vote at the general meeting

Every shareholder of a publicly listed company has, in principle, the right to participate in and exercise its voting right at the company's general meeting. Generally, a holder of one share is entitled to one vote. The articles of association may stipulate a voting record date 28 days prior to the general meeting. The record date determines which shareholders are entitled to vote at the general meeting. Shareholders may vote in person or by proxy (which may be granted electronically).9

In the Netherlands, a 'vote no' campaign has been seen on numerous occasions. An example is the 2016 'vote no' campaign of Dutch shareholders' association VEB against the pay package for Shell board members. Shareholders sometimes also express their dissatisfaction by voting against the discharge of the board, which is normally granted by the general meeting with an overwhelming majority. A recent example concerns Dutch bank ING where the general meeting did not discharge the (former) members of the executive or supervisory boards from their potential liability against the company for their duties performed in the 2018 financial year. This was seen by many as a reprimand for the €775 million fine10 ING incurred for failing to prevent money laundering. In late 2018, Unilever was confronted with a 'vote no' campaign when some of its shareholders, which collectively owned around 12 per cent of the company's stock, publicly opposed Unilever's plans to move the company headquarters from London to Rotterdam and simplify the company's corporate structure. Another example is the campaign from Cat Rock Capital to vote against the reappointment of the incumbent CFO and certain supervisory board members of Just Eat at the 2022 annual general meeting. In response to the campaign from Cat Rock Capital, Just Eat Takeway announced that the chairman of its supervisory board (one of the targeted supervisory board members) would not be seeking reappointment as chairman and supervisory board member. The incumbent CFO and other targeted board members were successfully reappointed, with approximately 70–80 per cent of the votes being cast in favour.

Since the introduction of stricter transparency requirements on the remuneration of the boards in December 2019,11 Dutch companies are facing increased scrutiny from shareholders on their remuneration policies and reports. In light of the covid-19 pandemic, Dutch companies face increasing investor pressure on their remuneration policies and board or senior leadership compensation. As a result, boards have voluntarily cancelled bonuses and took pay reductions for 2020. For example, Heineken cancelled bonuses for 2020 for their senior managers, including the executive board and the executive team, and the supervisory board of ForFarmers withdrew a proposal from the 2020 AGM agenda regarding remuneration increase. Despite the cautious economic recovery observed in 2021, this trend continued with the general meeting of AkzoNobel rejecting the remuneration report due to a lack of transparency and the general meeting of Flow Traders and Vastned Retail rejecting the proposed remuneration policy.

Right to place an item on the agenda

Shareholders, individually or jointly holding 3 per cent of the company's stock, have a right to submit items for the agenda of the general meeting. The company's articles of association can prescribe a lower percentage of 1 per cent, which relates to the former statutory threshold for submitting agenda items, or a number of shares representing a certain market cap. The company can refuse to put an item on the agenda of the general meeting if this contravenes the standards of reasonableness and fairness. The Corporate Governance Code stipulates that a shareholder may exercise this right only after it has consulted the executive board. See in this respect the company's right to invoke a 180-day response time and the statutory time-out period (see subsection ii).

Shareholders can submit items for the agenda as either a voting or a discussion item. However, shareholders cannot force the board to put an item on the agenda as a voting item if the general meeting does not have the power to resolve the topic; in other words, shareholders cannot use this right to organise referendums or 'motions' on topics belonging to the primacy of the boards. See the 2016 case of Boskalis v. Fugro, discussed in Section IV.i.

A notable example of shareholders submitting items for the agenda of the general meeting is the case concerning ASMI, a Dutch multinational active in the semiconductor industry. Two hedge funds Fursa and Hermes put a proposal to replace the CEO and most of the supervisory board members on the agenda of the 2008 general meeting.

Further, in recent years social activist Follow This has put a 'green' resolution on the agenda of the general meeting of oil giant Shell in which it requested that Shell set and publish targets that are aligned with the Paris Climate Agreement's goal to limit global warming to well below 2°C. Although the resolution was voted down each time, it gained more support from institutional investors over the years, in line with institutional investors' higher prioritisation of ESG issues. After the resolution was withdrawn in 2019 to give Shell more time to achieve its climate ambitions, Follow This again put forward its resolution at the 2020 AGM and repeated this at the 2021 AGM where it got the support of 30.5 per cent of Shell's shareholders (2017: 6 per cent; 2018: 5.5 per cent; 2020: 14.4 per cent). At the 2022 AGM, the support of Shell's shareholders for a similar resolution put forward by Follow This was only 20.3 per cent.

Right to convene a shareholders' meeting

Shareholders, individually or jointly holding 10 per cent of the company's stock (the company's articles of association can prescribe a lower percentage), may request the company's boards to call a general meeting and put such items on the agenda as requested by these shareholders. If the board refuses to do so, the shareholders could request authorisation from the district court to call a general meeting. The court will decide whether the shareholder has a legitimate interest in convening a shareholders' meeting. The board could – under certain circumstances – refuse to call a general meeting if it is of the opinion that the request contravenes the standards of reasonableness and fairness, or that it does not meet the 'legitimate interest' test, although this is likely to trigger litigation. A prominent example of activists exercising the right to convene a shareholders' meeting is Centaurus and Paulson & Co, who called shareholders' meetings at Dutch industrial conglomerate Stork to vote on alternative strategies, including a public-to-private transaction and the dismissal of the entire executive board. In 2017, Elliott Advisors also invoked the right to call a general meeting in its crusade against AkzoNobel, which was rejected by the boards of AkzoNobel. In subsequent court proceedings, the Enterprise Chamber and the Amsterdam District Court rejected Elliott Advisors' request to convene a general meeting (see Section IV.ii).

Initiate litigation

Shareholder litigation typically takes place in inquiry (mismanagement) proceedings before the Enterprise Chamber, a chamber of the Amsterdam Court of Appeal specialised in corporate proceedings.12 Any shareholder who alone or acting jointly holds sufficient shares13 may initiate inquiry proceedings and request the Enterprise Chamber to order an inquiry by independent, court-appointed investigators into the policy of the company.

The Enterprise Chamber may order an inquiry into the policy of a company if it is demonstrated that there are reasonable grounds to believe that there is mismanagement. This is a broad concept and may include, for instance, abuse of minority shareholders, insufficient disclosure to shareholders, conflicts of interest of board members or the unjustified use of takeover defences.

The Enterprise Chamber may at any time during the proceedings order interim measures. These may play an important role in takeover situations and activist campaigns. Interim measures may include suspending executive or supervisory board members, appointing interim executive or supervisory board members, and suspending shareholders' voting rights. These interim decisions tend to carry great weight and, despite being provisional, are often decisive in the matter's outcome. It is not uncommon that the Enterprise Chamber postpones a decision to order an inquiry into the policy of a company, and only rules on the requested interim measures.

The Enterprise Chamber has repeatedly demonstrated its willingness to act promptly and take rigorous action in takeover and activist situations. In the context of takeovers of public companies, shareholder interest groups and other activist shareholders often use (the threat of) inquiry proceedings to protect the interests of minority shareholders; for example, against the boards of the target company (some or all members of which may no longer be regarded as independent) or a majority shareholder.

The company's toolbox

Corporate law provides for several structural mechanisms that enable a company to prevent or deter hostile approaches. Many Dutch listed companies have adopted such mechanisms in their articles of association. Examples include the use of listed depositary receipts without voting rights, priority shares with certain control rights, shares with double or multiple voting rights, voting caps, the use of change of control clauses in financing arrangements, golden parachutes and structures that limit the shareholders' control of the board.

However, no company is immune to shareholder activism even with such structural mechanisms in place. In the following we describe some typical response measures that boards of targeted companies could use:14

  1. enter into a dialogue with the activist shareholder;
  2. get the company's message out to shareholder;
  3. relationship, standstill or settlement agreements;
  4. 'just say no' strategy;
  5. invoke response time or statutory time-out period;
  6. issue ordinary shares;
  7. sell treasury shares;
  8. trigger call option on anti-takeover preferred shares; and
  9. initiate litigation.
Enter into a dialogue with the activist shareholder

The most informal response measure for a company is to enter into a dialogue with the activist shareholder. This provides the opportunity for the company's boards to assess the activist's views on the company's strategy, and shows their willingness to listen to the activist shareholder's concerns and suggestions. Building a cooperative relationship and creating consensus with the activist shareholder can be a strong tool from which the company can benefit in the long run. Entering into discussions with the activist shareholder may give the boards new (industry) insights, 'breathing space' and time to determine its strategy if private discussions do not result in a long-term solution. Companies faced with shareholder activism often want to avoid a public activist campaign by first engaging in private discussions.

Get the company's message out to shareholders

A company dealing with shareholder activism could reiterate and emphasise its current or revised strategy, for example in combination with private discussions or a 'just say no' strategy. The executive board can give presentations to (key) shareholders and potential investors in which it explains that its current or revised strategy is in the best interest of the company and the sustainable success of its business taking into account the interests of its stakeholders, and, next to that, is the preferred path to maximise value for its shareholders. Gaining the support of (other) shareholders might prove pivotal in fending off an activist shareholder. Companies faced with shareholder activism, therefore, often closely monitor their shareholder base to assess the presence of other shareholders that are likely to support an activist campaign or form a wolf pack with other activist shareholders. In addition, companies will often actively engage with their long-term large shareholders to seek endorsement of their policies and retain their support.

Relationship, standstill or settlement agreements

A growing trend in the Dutch market is that listed companies conclude relationship agreements with one or more large, vocal shareholders. In a relationship agreement, the company and the shareholder generally agree on topics such as strategy, governance, financing and exchange of information. The company could give one or more supervisory board seats to the shareholder in exchange for support for its strategy. Relationship agreements are typically concluded with activist shareholders with a significant shareholding (typically more than 10 per cent), but also with non-hostile cornerstone investors in the context of an initial public offering. Examples include the relationship agreements between telecom company KPN and its Mexican suitor América Móvil, and between critical materials company AMG and hedge fund RWC.

Although concluding a relationship agreement may reduce or channel the pressure exercised by a shareholder, the board must be aware that representation of an activist shareholder on the board inevitably has an impact on the boardroom dynamics.

In an activist situation, a company may also seek to enter into a pure standstill or settlement agreement to reach a (temporary) ceasefire with an activist shareholder. An example is AkzoNobel agreeing to a standstill with Elliott Advisors, in August 2017, to end pending litigation and gain support for the proposed change in its board composition, which included new supervisory board members that were nominated by AkzoNobel following consultation with its biggest shareholders.

Invoke response time

Pursuant to the Corporate Governance Code, the executive board may invoke a 180-day response time when shareholders request certain agenda items that could lead to a change in the company's strategy, such as the request to appoint a new CEO, or the request to dismiss an executive or supervisory board member. The executive board must use the response time for further deliberation and constructive consultation with the shareholder involved, and to explore alternatives. Case law has further defined that, in principle, shareholders must respect the response time as invoked by the executive board; the response time may only be set aside if there are sufficiently important reasons for this. The response time provides the executive board with some breathing space and the opportunity to enter into a dialogue with the activist shareholders, or to seek alternative options.

Statutory time-out period

As of 1 May 2021, a 250-day statutory time-out period for companies came into force. The executive board can invoke the time-out period if it is confronted with either a proposal from shareholders concerning the appointment, suspension or dismissal of members of the executive or supervisory boards (or an amendment regarding the corresponding provisions in the company's articles of association), or an unsolicited public offer. The management board may only invoke the statutory response time if it considers the shareholders' request or the offer, to materially go against the interests of the company and its affiliated enterprises. The decision of the executive board to invoke the time-out period is subject to approval of the supervisory board (if present) and needs to be motivated by the executive board.

During the response time, the general meeting cannot vote on proposals to change the composition of the boards or corresponding provisions in the articles of association; however, such proposal may be discussed at the general meeting without a vote being held. The executive board is required to consult shareholders holding more than 3 per cent during the time-out period to gather their views. Shareholders that hold at least 3 per cent of a company's share capital (i.e., those who have the right to submit items for the agenda of the general meeting) can initiate proceedings with the Enterprise Chamber to terminate the statutory time-out period.

Although the proposed statutory time-out period (partly) overlaps with the response time as laid down in the Corporate Governance Code, the Minister for Legal Protection has stated that he intends to give boards of Dutch companies the option to choose between the two response measures. However, it is not obvious that boards will invoke both measures at the same time; in that case, it would be logical that the 180 days of the response time will be deducted from the maximum of 250 days of the statutory time-out period, so that unreasonable accumulation of the measures will be prevented. It is also expected that the revised Corporate Governance Code will avoid overlap between the statutory time-out period and the response time in the current Corporate Governance Code.

Issue ordinary shares

As noted above, the general meeting has the power to issue ordinary shares. However, pursuant to the DCC, the general meeting may delegate this power to another corporate body for up to five years. The same applies for the limitation and exclusion of pre-emptive rights of existing shareholders. Typically, as is the case for the vast majority of Dutch listed companies, the general meeting authorises the executive board to issue ordinary shares. In general, the authorisation stipulates that the executive board can issue a certain percentage of shares without pre-emptive rights for 'general corporate purposes' (often 10 per cent) and a certain percentage for the purpose of mergers and acquisitions (often also 10 per cent).15 To defend itself from activist shareholders or hostile bidders, the executive board could decide to issue shares (without having regard to pre-emptive rights) to a 'friendly' third party; for example, a long-time strategic party. Although perceived as aggressive, such an issuance dilutes the activist shareholder's stake in the company and accordingly reduces its influence. An interesting development in this regard is that, since 2018, Institutional Shareholder Services recommends in its voting guidelines to vote against authorisation for the executive board to issue more than 10 per cent of shares without pre-emptive rights. We have observed that many listed companies have since confined themselves to requesting an authorisation to issue shares only up to 10 per cent.

Sell treasury shares

When a company holds a certain number of its own shares (e.g., as a result of a share buy-back) and these shares have not yet been cancelled (treasury shares), a company may sell these to a friendly third party. As a result, similar to issuing ordinary shares, the third party acquires a stake in the company and dilutes the shareholding of the activist shareholder. Alternatively, a company could use treasury shares as consideration when purchasing certain assets from a third party. Depending on the specific situation, the company's boards must be aware that this defensive measure, similar to issuing ordinary shares, is likely to be perceived as aggressive not only by existing shareholders but also by the investor community and regulators.

Defence foundation – issuing anti-takeover preferred shares

The most common defensive measure consists of the possibility for a company to issue preferred shares to an independent, yet friendly, foundation. Accordingly, the company grants the foundation a call option, pursuant to which the foundation can effectively obtain up to 50 per cent of the votes.

The company's boards may invite the involvement of the defence foundation. It will then be up to the foundation to decide whether to exercise its call option and choose its course of action, including whether it wants to engage with an activist or bidder to signal what the foundation would not find acceptable, or to give an opportunity to an activist or bidder to clarify its intentions. The foundation cannot simply act on what the target board might find desirable, but rather must make its own decision in accordance with its objectives as stated in its articles of association. In general, the foundation's articles of association state that the foundation serves the interest of the company and its stakeholders by safeguarding, among other things, the continuity, independence and identity of the company and its business.

Foundations rarely exercise their call option, which may be partly explained by the fact that the mere presence of a defence foundation may have a deterrent effect on a hostile activist or bidder. One of the few, and most recent, examples – in which a defence foundation exercised its call option – concerns the defence foundation of KPN, which exercised its call option as a reaction to América Móvil's announcement to launch a hostile bid. Another example is the defence foundation of global pharmaceutical company Mylan NV (having its registered office in the Netherlands), which made use of its call option to deter Teva Pharmaceutical Industries.

Initiate litigation

Although uncommon, a targeted company can also itself initiate summary proceedings before the district court or inquiry proceedings before the Enterprise Chamber. In such proceedings, the company can request interim or provisional measures to neutralise the campaign of an activist shareholder.