Companies could be forced to consult employees both before and during takeover negotiations if proposed amendments to the European Takeover Directive come into force, according to a report.
A draft report from the legal affairs committee of the European Parliament contains the amendments which, if implemented, the report said it would effectively prevent secret negotiations.
Peter Montagnon, head of investment affairs at the ABI said in the report: "There is no way you could make a disclosure to employees without falling foul of the laws preventing market abuse." He continued: "No one would dare to do anything."
Montagnon also said the ABI planned to make representations to the European Parliament, the report claimed. The City and the British Government are also reportedly opposed to the amendments.
The Directive would introduce a code of conduct for bids and mergers throughout the European Union said the report.
The British Takeover Panel is said to be concerned that explicit regulations would lead to takeover battles becoming mired in legal proceedings, the report concluded.
