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Legislative Decree No. 47/2026 rewrites the mandatory bid threshold, squeeze-out mechanics and loyalty share rules — here is what an Australian fund must check before crossing a trigger level in an Italian listed company
An Australian fund manager tables a memo: acquire up to 32 per cent of a mid-cap Italian infrastructure company listed on Euronext Milan. acceptable as deliberate staccato style What the memo does not mention is that Legislative Decree No. 47 of 2026 (Decreto Legislativo 24 aprile 2026, n. 47), in force from 29 April 2026, has reset the trigger level at which that stake becomes a mandatory bid obligation. The fund crosses the new threshold before anyone updates the model. The result: an obligation to launch a full public offer for 100 per cent of the company — at a premium — that was never in the investment thesis.
That is not a hypothetical. It is the pattern practitioners see when a cross-border transaction is modelled on the rules that existed before April 2026.
Under Italian securities law — specifically the Testo Unico della Finanza (TUF), Italy's Consolidated Financial Act — a person who acquires, alone or in concert, a stake that crosses a defined threshold in a company listed on a regulated Italian market must launch a mandatory tender offer (MTO) for the remaining shares. Before D.Lgs. 47/2026, that threshold was set at 30 per cent of voting rights under Article 106 TUF.
The 2026 reform adjusts the threshold structure. For companies with a market capitalisation above approximately €1 billion, the 30 per cent trigger is retained but the acting-in-concert and stake-aggregation rules have been tightened. For companies in the revised SME listing category — those with a market cap below €1 billion that opt in to the lighter governance regime — a separate, higher threshold now applies, reflecting the legislature's stated aim of attracting growth-company capital to Italian listed markets. The precise level for SME-category companies was set by the implementing regulations that CONSOB, Italy's markets regulator, was mandated to issue following publication in the Gazzetta Ufficiale.
The practical effect for an Australian fund is immediate: before acquiring any material stake in a listed Italian company, counsel must first establish which track the target sits on — standard or SME — and remodel the trigger accordingly. A fund that relies on its pre-April 2026 compliance memo is operating with stale advice.
Unlike the rules in Australia, where the Corporations Act 2001 (Cth) sets a single bright-line 20 per cent creep threshold that applies uniformly to all ASX-listed companies, the Italian system now operates on a two-track model depending on the target's market capitalisation and whether it has elected the SME opt-in regime. There is no direct equivalent of the Australian 3 per cent creep exception in Italian law. Every acquisition step must be measured against the applicable Italian threshold before any order is placed.
Nemo plus iuris ad alium transferre potest quam ipse habet — a person cannot transfer more rights than they hold. The corollary in a squeeze-out is that a majority holder cannot force out a minority unless the law specifically says so. Italian law has always required a 90 per cent ownership threshold to trigger a squeeze-out right under Article 111 TUF. D.Lgs. 47/2026 does not change that threshold, but it amends the timeframe within which the squeeze-out must be exercised following a successful mandatory or voluntary tender offer.
Under the revised rules, the 90 per cent holder now has a defined window — counted from the date on which the 90 per cent level is formally confirmed by CONSOB — to notify its intention to exercise the squeeze-out. The reform also clarifies the valuation methodology where the price paid in the preceding tender offer is contested by minority holders, bringing the procedure closer to the framework the CJEU addressed on equitable price in listed company takeovers under Directive 2004/25/EC on takeover bids.
For an Australian fund whose exit strategy relies on achieving 100 per cent ownership after a successful offer — a standard assumption in take-private transactions — the revised timeframe means that the post-offer integration timetable will need to be revisited. Advisers who have not reviewed the updated Article 111 TUF since 29 April 2026 may be working from an outdated timetable.
D.Lgs. 47/2026 reinforces the loyalty share regime under revised Article 127-quinquies TUF. A loyalty share, or azione con voto maggiorato, grants double voting rights to shareholders who hold the same shares continuously for at least 24 months. For a newly listed Italian company, or one that amends its articles to adopt the mechanism, this creates a two-class voting structure without issuing a separate class of shares — a feature that sits between the Australian concept of preference shares and the UK's enhanced voting structures used in tech listings.
An Australian fund acquiring a stake in an Italian company that has loyalty shares already in issue faces an immediate governance calculation: the effective voting power of long-term Italian shareholders may be significantly higher than their economic ownership suggests. A 28 per cent economic stake held by a founding family that qualifies for double votes can represent up to 37 per cent of voting rights in a shareholder meeting, depending on how many shares have qualified. That arithmetic has a direct bearing on where the fund sits relative to the MTO threshold.
Where the fund itself intends to list an Italian holding vehicle — a less common but not unusual structure for large infrastructure acquisitions — it may elect to adopt the loyalty share mechanism in the articles of association drafted at the time of listing. This requires specific drafting at the rogito notarile, the notarial deed of incorporation, and the mechanism must be registered with the Italian Companies Register (Registro delle Imprese) before listing.
This is the compliance trap that published commentary on D.Lgs. 47/2026 has not adequately addressed. It deserves attention because it is, in practice, the most disruptive scenario for a foreign fund.
Under Law No. 4/2026 (Legge 15 gennaio 2026, n. 4), Italy's revised foreign investment screening regime, a non-EU acquirer crossing certain ownership thresholds in a company operating in a strategic sector — energy, infrastructure, defence, financial services — must notify the Presidency of the Council of Ministers and wait for clearance before completing the acquisition. The review period is 45 days from complete notification, extendable to 90 days in complex cases. For acquisitions in the banking and financial sector, the reform introduced by Law 4/2026 also requires the domestic Golden Power review to be deferred until after EU and ECB assessments are completed, adding further time to the timeline.
Now combine that with the MTO rules. An Australian fund crosses the revised mandatory offer threshold — say, it acquires a block that takes it from 27 per cent to 31 per cent in a standard-track company. Two things happen simultaneously. First, the MTO obligation under Article 106 TUF is triggered: the fund must announce its intention to launch a full offer within a defined period, typically communicated in a press release filed with CONSOB. Second, if the target is in a strategic sector, the Golden Power notification — filed, or not yet filed — is still pending.
The problem is structural. The MTO clock is driven by TUF and CONSOB rules. The Golden Power clock is driven by Law 4/2026 and the Presidency of the Council. Neither regime automatically suspends the other. A fund that has not obtained Golden Power clearance before crossing the MTO threshold can find itself in breach of the offer obligation while legally unable to complete any acquisition step pending the government's decision.
The only operational solution is to obtain a formal waiver or suspension from CONSOB pending Golden Power resolution — a process that is possible but not automatic, requires coordinated filings with both authorities, and adds cost and time that a compressed deal timetable cannot absorb. In our files, the most common mistake is treating Golden Power as a post-signing formality rather than a pre-threshold condition. By the time the MTO trigger is crossed, it is too late to sequence correctly.
The Council of State (Italy's highest administrative appeals court, the Consiglio di Stato) addressed the scope of the Golden Power rules in a different but instructive context in its Section IV, Decision No. 9619, published 5 December 2025 (Cons. Stato, Sez. IV, 5 dicembre 2025, n. 9619), clarifying that even security arrangements over strategic-sector shares can implicate the regime depending on enforcement mechanics. The principle — that the government's screening power is triggered by events that transfer effective control, not merely formal ownership — applies with equal force to an MTO launched while a Golden Power review is open. It means that completing even a partial offer tranche could constitute a triggerable event without clearance.
D.Lgs. 47/2026 introduces a lighter governance framework for companies with a market capitalisation below approximately €1 billion that elect to register as SME-category issuers with CONSOB. For Australian funds focused on Italy's mid-market — family-controlled industrials, specialist logistics, regional utilities — this is the category where most targets will sit.
The two-track model creates a due diligence obligation that did not previously exist. Before making any offer, the fund must confirm: whether the target has opted in; what the applicable MTO threshold is for that category; and whether the articles of association have been amended following the opt-in to adopt loyalty shares, enhanced quorum rules or other governance features permitted by the reform. These points are not visible from the share register alone. They require a review of the articles of association, the CONSOB registry filing and, where relevant, any shareholder agreements filed under Article 122 TUF.
A company's audited accounts — mandatory for Italian listed companies under Legislative Decree No. 58 of 1998 (D.Lgs. 24 febbraio 1998, n. 58), the original TUF — will not disclose whether the SME opt-in election has been made. That confirmation comes only from CONSOB filings.
Does D.Lgs. 47/2026 change the 30 per cent mandatory offer threshold for all Italian listed companies?
Not uniformly. The 30 per cent threshold under Article 106 TUF is retained for standard-track listed companies. For companies that have opted in to the new SME listing regime — market cap below approximately €1 billion — a revised, higher threshold applies. The exact level depends on CONSOB's implementing regulations. Any fund building a stake in an Italian listed company must first confirm which track applies to its target before modelling its acquisition steps.
What is the squeeze-out threshold in Italy and has the 2026 reform changed it?
The squeeze-out threshold remains 90 per cent of voting rights under Article 111 TUF. D.Lgs. 47/2026 did not alter that level, but it revised the post-offer timeframe within which the right must be exercised and clarified the price-challenge procedure available to minority holders. Funds planning a take-private must rebuild their post-offer timetable against the revised Article 111 rules.
Can a foreign fund be caught by both the MTO obligation and the Golden Power review at the same time?
Yes, and this is the most serious compliance risk the 2026 reforms create for a non-EU acquirer in a strategic sector. The two regimes run on separate legal clocks and neither automatically suspends the other. The practical solution — coordinated filings with CONSOB and the Presidency of the Council seeking suspension of the offer timetable pending Golden Power clearance — must be prepared before, not after, the threshold is crossed. Instructing Italian capital markets counsel to map both clocks against the proposed acquisition schedule is the first concrete step.
HREFLANG BLOCK:
Editorial Team — Panato Law Firm Staff
