Article 60 of the Law 24/1988, of 28 July, of the Securities Market, contains the legal status of the legal status applicable to the figure of public bids for the acquisition of securities (hereinafter, OPA). The normative development of the legal forecasts on OPA was carried out through Royal Decree 1197/1991 of 26 July on the regime of public bids for the acquisition of securities.

Since then, this regulation has been consolidating and developing this regulation, which has a profound impact on the possibilities of variation in the positions of social control, the mechanisms of reorganization of the business structures and the guarantee of equal treatment of all shareholders.

The Congress of Deputies, dated October 1, 2002, unanimously approved a non-law proposal regarding public offers of securities acquisition, with the fundamental objective of improving the protection of the minority shareholder when control changes occur in publicly listed companies, urging the government to introduce the following measures into the regulatory rules for such offers:

1. Extend the obligation to perform OPA for those who intend to acquire control of a company without reaching 25 percent of its capital, regulating the objective conditions to be taken into account in determining the referred to above, such as the appointment, either directly, indirectly or in concert, of a relevant percentage of the members of its administrative body.

2. Regulate the minimum percentage of values to be addressed by the OPA when it is intended to acquire control of a society without reaching 25 percent of its capital.

3. Force to launch an takeover bid, guaranteeing a minimum bid price, to whom, without having made it at the time of acquiring a significant stake in the capital of a listed company, it has taken over the control of that company subsequently by appointing a relevant percentage of members of the administrative body, and paid, where appropriate, a control premium for the shares acquired.

4. Admit in our law the possibility that the OPA will be presented in a conditioned manner as a mechanism to fight against the armor-plating of the management teams of the listed companies, which it demands to establish, with character In the case of the case-law, a regulation requires, in the interests of legal certainty, in relation to the APOs ' shields subject to condition.

5. It will extend the possibilities of improving the offer in the competing OPA, favoring that the minority shareholders will always benefit from the best prices.

6. Review the percentages of capital to which the takeover should extend in society to minimize the assumptions in which minority shareholders who want to go to the takeover bid are forced to go to the prorrateo because cannot sell all their shares.

7. Review the procedures for the submission and approval of the takeover bid to ensure that there are no insider leaks.

Well, with this royal decree, dictated under the jurisdiction of the competences provided for in article 149.1.6. and 11. of the Constitution, full satisfaction is given and they are introduced in the current regulation (Royal Decree 1197/1991) all the measures proposed by the Congress of Deputies in the aforementioned proposal, regarding the public bids for the acquisition of securities that require regulatory status.

The first three articles introduce the following modifications. A first measure incorporated in the royal decree is to impose in more cases the OPA for 100 percent. Until now, if a participation equal to or greater than 50% of the society concerned was intended to be achieved, an OPA should be presented for at least 75% of the capital. This created problems for the minority shareholders, because when the price was attractive and they wanted to go to the offer in many cases it was necessary a pro-rata. The reform proposes that if 50 percent or more of the capital of the affected society is to be acquired, the takeover should be 100 percent.

This same rule will apply when, even if less than 50 percent is acquired, it is intended to designate more than half of the members of the affected society. It is intended that if society is really to be controlled, it is necessary to launch an offer covering all the capital of the society concerned.

Certainly, the ability to appoint advisers is a virtually uncontested indication that the control of the affected entity has been assumed, hence it is included as a trigger for launching the takeover bid.

The above mentioned precepts also introduce reforms in so-called "mandatory partial OPA". Until now, it was only necessary to launch an OPA when it was intended to acquire a percentage equal to or greater than 25 percent. In this case, if the percentage to be acquired was less than 50 per cent, the OPA was to be launched by 10 per cent of the society concerned. The reform adds another assumption that requires the presentation of OPA by the 10% of the affected, when it is intended to reach a percentage of less than 25 percent and is intended to designate more than one third and less than half of the counsellors of the affected.

The reform, following the indications of the Congress, also imposes an obligation to launch OPA when the indicated general control assumptions (designation of directors of the affected society) are given within two years. since the acquisition of the participation in the affected company.

This rule also incorporates amendments to Article 4 of Royal Decree 1197/1991, concerning the excluded cases. The previous regime excluded from the obligation to launch the takeover of takeover bids that occur in the framework of a process of restructuring of economic sectors, when the agreement of the Government's Delegation for Economic Affairs is measured. This exception disappears, thus significantly reducing public intervention in processes that should be left to the free functioning of the market.

Instead, acquisitions of less than six per cent are excluded from the obligation to make compulsory partial takeover (provided that the number of advisers designated by the acquirer is not increased), which occur in the the framework for a joint control situation when it has been qualified by the Competition Defence Service.

The assumptions in which a subject will acquire a significant share as a result of the conversion of credits into shares will also be excepted, following an agreement reached within a procedure. Bankruptcy.

The amendment of Articles 15, 16 and 22 of Royal Decree 1197/1991 will allow the approval of the guarantee up to two days after the takeover of the OPA. In this way, the risks of a privileged information leak that implies the negotiation of the endorsements with the financial institutions will be mitigated.

Royal Decree 1197/1991 being amended did not provide for a generic regulation of the offers subject to conditions. This has created some insecurity in the market that the reform intends to solve. Thus, the present royal decree, in reforming Article 21, allows the effectiveness of the AAPs to be subject to conditions whose compliance must be approved by the social organs of the affected society and requires that the prospectus be reported on terms of the offer.

The competing OPA regime is also improved (amendment of Article 32 et seq.). In particular, the requirement that the price improvement in competing offers should be at least five per cent is abolished. Also, once the deadline for acceptance of the last of the authorised competitors is initiated, an auction period is opened. Thus, after five days from that date, all bidders can present an improvement in the price on the closed price or extend the offer to a higher number of securities.

Finally, the royal decree incorporates a transitional regime for public offerings that are in the process of the entry into force of the new regulation.

In its virtue, on the proposal of the Minister of Economy, in agreement with the Council of State and after deliberation of the Council of Ministers at its meeting of April 11, 2003,

D I S P O N G O:

Single item. Amendment of Royal Decree 1197/1991 of 26 July 1991 on the arrangements for public tenders for the acquisition of securities.

Royal Decree 1197/1991 of 26 July on the regime of public offering for the acquisition of securities is amended as follows:

One. Article 1 is amended as follows:

" Article 1. Public procurement offer in the event of a significant participation being taken or increased.

1. Any natural or legal person (hereinafter "offeror") seeking to acquire, in a single act or in successive acts, shares in a company (hereinafter referred to as the "offeree company"), the capital of which is in whole or in part admitted to securities exchange trading, or other securities such as subscription rights, convertible debentures, warrants or any similar instruments which may directly or indirectly entitle the subscription or acquisition of such securities, In order to achieve this, together with the one that already has, if any, a participation significant in the capital with the right to vote of the issuing company, securities or instruments, it will not be able to do so without promoting a public offer of acquisition in the terms foreseen in this royal decree.

2. For the purposes of this royal decree, all those representing percentages equal to or greater than 25 and 50 per cent of the capital of the offeree company shall be regarded as a significant participation in their respective cases. those which, representing a lower percentage, fulfil the conditions set out in paragraphs 5 and 6.

3. Where a participation equal to or greater than 25% of the capital of the company is sought, the offer shall be made on a number of securities representing at least 10 per cent of the capital of the offeree company.

4. Where a share in the capital of a company equal to or greater than 25 per cent is already held, but less than 50 per cent, and an increase in that holding is intended to be increased by at least six per cent over a period of 12 months, the offer shall be be carried out on a number of securities representing at least 10 per cent of the capital of the offeree company.

5. Where a share of less than 25% of the capital of the offeree company is intended to be reached, a public procurement offer shall be made on a number of securities representing at least 10 per cent of the capital of the company concerned. the company concerned, provided that the following conditions are met simultaneously:

(a) The intention is to achieve a participation equal to or greater than five per cent of the capital of the offeree company or which, without reaching the percentage indicated, allows a number of members to be appointed who, if necessary, together with the which have already been designated, represent more than one third and less than half of the members of the management body of the offeree company.

(b) The intention is to designate the number of members referred to in subparagraph (a).

6. A public procurement offer must be made on 100 percent of the capital of the offeree company when:

(a) An interest equal to or greater than 50 per cent of the capital of the offeree company is sought, b) An interest of less than 50 per cent of the capital of the offeree company shall be sought, provided that they are simultaneously the following circumstances:

1. It is intended to achieve a participation equal to or greater than five percent of the capital of the offeree company, or which, without reaching the percentage indicated, allows a number of members to be appointed who, if necessary, together with those who have already been designated represent more than half of the members of the management body of the offeree company.

2. It is intended to designate the number of counsellors mentioned in the previous paragraph.

The application of this rule will be preferable to that of the rules set out in paragraphs 3, 4 and 5.

7. The public offering must be addressed:

(a) All holders of the shares of the company concerned, including those holding shares without a vote which, at the time of application for the authorisation of the offer, have the right to vote in accordance with the provisions of the legislation in force.

(b) Where they exist, to all holders of share rights, as well as to holders of convertible debentures.

Although in no case shall be taken into account for the purposes of calculating the minimum number of securities to which the public offer must be made, this may or may not be directed to holders of warrants or other securities or instruments giving an option to the acquisition or subscription of shares, with the exception of those referred to in subparagraph (b) of this paragraph, by issuing or issuing them.

But if you were to address them, the public procurement offer must be directed to all persons holding the ownership of the warrants, securities or instruments in question.

8. The obligation to promote a public takeover bid in the terms set out in the preceding paragraphs shall also apply to the acquisition of shares in respect of which the application for admission to trading has occurred in stock exchange.

9. Those who acquire in a listed company a number of securities to determine that the percentage of capital left in their possession is five per cent or their successive multiples or a lower one allowing to appoint a number of members who, united, where appropriate, to which they have already been designated, account for more than one third of the members of the management body of the offeree company, they shall include in the communication provided for in Article 1 of Royal Decree 377/1991 of 15 March 1991 on communication of significant holdings in listed companies and acquisitions by these companies own shares, a statement indicating that the acquirer is not in any of the cases which, in accordance with this royal decree, require the formulation of a public offer. '

Two. New wording is given to Article 2 (1), Computation of significant participation:

" 1. Shares or other securities held or acquired by entities belonging to the same group, as defined in Article 4 of Law 24/1988, of 28 May, shall be deemed to be held or acquired by the same natural or legal person. (a) July, the Securities Market, members of its administrative bodies and other persons acting in its own name, but on behalf or in a concerted manner with that person. "

Three. The last subparagraph of Article 2 (4) (a), with respect to the significant participation, is worded as follows:

" If, in accordance with the calculation set out in the preceding paragraph, any of the significant holdings referred to in Article 1 were to be attained, a public procurement offer shall be promoted in the terms indicated in that article. "

Four. Article 2 (4) (b), of the significant participation, shall have the following wording:

"(b) Once each conversion into shares to which it is intended is opened, the calculation indicated in the preceding paragraph shall be reapplied, applying the rules referred to in Article 3 (4) and (9)." Five. Article 3 shall have the following

:

" Article 3. Indirect or oversold acquisitions of significant participation and subsequent designation of members of the management body of the affected company.

1. In the event of a merger with another company or takeover of another company or entity, even not admitted to trading on a stock exchange or not domiciled in Spain, having direct or indirect participation in the share capital of a third party whose actions are admitted to negotiation, the following rules apply:

(a) If this is the merger or takeover of a company or entity of mere holding of securities, or of a company or entity in which the securities of the offeree company are an essential part of the asset the acquisition of which is the reason for the merger or takeover to be determined must be made publicly available for purchase where, as a result of the merger or takeover, any of the shares in the shares of the company concerned are to be reached in the offeree company referred to in paragraphs 3 and 4 and in paragraph 6 (a) of Article 1 (6).

The public procurement offer, which must be made on the basis of a merger or takeover, must be addressed to the entire capital, and the valuation rules set out in Article 7.3 shall apply.

(b) If the merger with a company or entity other than those referred to in subparagraph (a) above is concerned, it shall be compulsory to promote a public takeover bid only where, as a result of the merger, it has been reached a share of 50% or more of the capital of the offeree company. The public procurement offer shall be made within six months of the date of the merger, and shall be made on a number of securities allowing the acquirer to reach 100 percent of the capital of the offeree company. The valuation rules laid down in Article 7.3 shall apply to the offer.

However, the formulation of a public procurement offer will not be mandatory when, within the six-month period, the excess share of the indicated percentage is sold or put up for sale on offer. for sale, in which the price requested per share may not exceed the price referred to in Article 7.3.

(c) If the takeover of a company or entity other than those referred to in subparagraph (a) above is treated, a public takeover bid shall be made when, as a result of the takeover, it has been reached in the company concerned a participation equal to or greater than 50% of its share capital. In particular, the takeover of a company admitted to trading on the basis of a public takeover bid will entail the obligation to promote as many public takeover bids as companies admitted to trading in Those who take control means that they reach the percentage.

The public offering shall be made within six months of the date of the takeover, and shall be carried out on the number of securities allowing the acquirer to reach 100 percent of the capital of the offeree company. The valuation rules laid down in Article 7.3 shall apply to the offer.

However, the formulation of a public procurement offer will not be mandatory when, within the six-month period, the excess share of the indicated percentage is sold or put up for sale on offer. for sale, in which the price requested per share may not exceed the price referred to in Article 7.3.

2. If, as a result of a reduction in capital, the participation of a shareholder is achieved by any of the percentages of participation referred to in Article 1 (3) and (4) and (6) (a), that partner shall not may undertake further acquisition of shares, or other instruments which may entitle it to its subscription or acquisition, without promoting a public procurement offer under the conditions set out in the relevant paragraph of the said Article.

3. Financial institutions which, in compliance with a securities issue insurance contract, acquire a significant share in the capital of a company whose shares are admitted to trading shall make public offer (a) the acquisition and the right to exercise between the political rights of the securities thus acquired.

The public offering shall be made within the following six months after the acquisition, and shall be made on the number of securities corresponding as set out in Article 1.

The valuation rules set out in Article 7.3 shall apply to the offer.

However, the formulation of a takeover bid will not be mandatory when, within the six-month period, the excess stake is sold or put up for sale through a public offer of sale.

4. If, as a result of the non-conversion of all securities and instruments giving the right to the subscription or acquisition of shares of an issue, the percentages of significant participation referred to in paragraphs 3 and 4 and in the (a) Article 1 (6) (a), the natural or legal person who is in such a situation as having exercised the conversion or acquisition rights which he or she is entitled to carry out shall, within the maximum period of six months from which he reaches participation, in the alienation of the excess of participation on the percentages indicated in the (a) to promote a public offering in accordance with the terms set out in the relevant paragraph of that Article. In the latter case, the valuation rules laid down in Article 7.3 shall apply to the tender.

This rule will not apply when, at the time of the acquisition, a public takeover bid has already been promoted in accordance with the provisions of Article 2.4.a.

5. Where a share of less than 25 per cent of the capital of the offeree company has been acquired, a public bid for acquisition shall be made on a number of securities representing at least 10 per cent of the capital of the company. affected, provided that the following circumstances are simultaneously present:

(a) that a holding equal to or greater than five per cent of the capital of the offeree company has been reached or which, without reaching the indicated percentage, allows a number of members to be appointed who, if appropriate, united to the which has already been designated, represents more than one third and less than half of the members of the management body of the offeree company.

(b) The acquirer has designated the number of members referred to in subparagraph (a) within 24 months of the acquisition.

6. Where a share of less than 50% of the capital of the offeree company has been acquired, a public bid for the acquisition of 100 per cent of the capital of the offeree company shall be made when the shares are held simultaneously. Following circumstances:

(a) that a holding equal to or greater than five per cent of the capital of the offeree company has been reached or which, without reaching the indicated percentage, allows a number of members to be appointed who, if appropriate, united to the which has already been designated, represents more than half of the members of the management body of the offeree company.

(b) The acquirer has designated the number of members referred to in subparagraph (a) within 24 months of the acquisition.

7. In the cases referred to in paragraphs 5 and 6, the application for authorisation of the tender must be submitted within two months. In such cases, the price of the offer may not be less than that which would be established in accordance with the criteria of Article 7, nor, where appropriate, the highest that the offeror or persons acting in concert with the same securities have paid for the same securities. in the 12 months prior to that application.

The above rules shall not apply where a public procurement offer has already been promoted in accordance with the terms of Article 1 (5) or (6) (b).

8. For the application of the 24-month period referred to in paragraphs 5 and 6 above and for the calculation of the two-month period provided for in paragraph 7, the date of acceptance of the position by the counsellor or members shall be taken as a reference.

9. For the purposes of this Article and in Articles 1 and 4, the holder of the significant participation shall be presumed, unless proof to the contrary, to have designated members of the management body of the offeree company in the following cases:

(a) When the adviser has been appointed by the holder of the significant participation or by a company belonging to his or her own group in exercise of its right of proportional representation.

(b) Where the persons appointed are directors, senior management, employees or non-casual providers of services to the holder of the significant participation or companies belonging to the same group.

(c) When the appointment agreement has been adopted with the votes in favour issued by the holder of the significant holding or by companies belonging to the same group, or by the members of the (a) the management of the business;

(d) When the holder of the significant participation in question or a company belonging to the same group.

e) When in the corporate documentation on which the appointment is made, including the minutes, certifications, public writings or other documentation prepared to obtain the registration, in the public information of the the company concerned or the holder of the significant holding in question, or in other documentation of the offeree company, the holder of the significant holding assumes that the counsellor has been designated by that holder, or that represents or is a Sunday counselor in the society affected by his relationship with him. "

Six. Article 4 (c), excluded, is worded as follows:

" (c) Those in which all shareholders of the offeree company agree unanimously to sell or swap all shares representing the capital of the company or to forego the sale or swap of their securities in the the public procurement offer scheme. '

Seven. Article 4 (d) is amended as follows: Excluded:

" (d) Those acquisitions in which, in the case of a situation which has been qualified by the Service of Defense of the Competition as a joint control of the company by the acquirer, in accordance with Law 16/1989, July 17, Defense of Competition, simultaneously concurs with the following conditions:

1. Prior to the acquisition, the joint control partners have a joint participation in the company of more than 50% and have appointed more than half of the members of their joint control. organ of administration.

2. As a result of the acquisition, the number of directors appointed by the acquirer shall not be increased.

3. The increase in participation in the capital held by the acquirer does not exceed six per cent in a period of 12 months, without in any case being able to reach or exceed 50 per cent. '

Eight. A paragraph (e) is added to Article 4, excluding those excluded, with the following content:

" (e) Those in which a subject acquires significant participation as a result of the conversion or capitalization of credits in actions by an agreement reached within a bankruptcy procedure, the holder of such claims is the original holder, and not the holder of such claims. '

Nine. Article 5 (3), Public Procurement Offering in the event of amendments to the statutes, shall be worded as follows:

" 3. For the purpose of determining the existence and extent of the obligation laid down in this Article, the rules laid down in Article 1 (7) and Article 2 (1), (3) and (4) shall apply. "

Ten. Article 11 (1), Guarantee of the offer, is worded as follows:

" 1. The offeror must accredit to the National Securities Market Commission the formation of the securities to ensure compliance with the obligations resulting from the offer. In the event that this condition is not sufficiently accredited within the time limits which, where appropriate, correspond in accordance with the provisions of Article 16.1.a), and without prejudice to the responsibilities which the offeror may incur, the offer all the effects of the failure to be filed shall be made public. "

Once. Article 15 (2) (e) is reworded, and the contents of the brochure are:

" (e) Type of guarantees formed by the offeror for the settlement of his/her offer and, once presented, the supporting documentation of those, identity of the financial institutions with which they have been incorporated, in his/her case, and its amount. '

Twelve. A paragraph (g) is added to Article 15 (2), Content of the prospectus, with this wording:

"g) All other conditions to which the offer is subject".

Thirteen. Article 16 (1) (a) is amended as a document to accompany the prospectus for the tender, which shall be as follows:

" a) Proof of the offer guarantee. In the event that it has been constituted by credit institution, the supporting documents may be submitted within two working days of the notification of the agreement to suspend the trading of the securities to which referred to in Article 13. '

Fourteen. A paragraph 3 is added to Article 19, Deadline for Acceptance, with the following wording:

" 3. In the case of conditional tenders as provided for in Article 21, the National Securities Market Commission may extend the period provided for in paragraph 1 in order to enable the offeree company to hold a general meeting. for the management board to inform the shareholders about the terms of the offer and, where appropriate, to adopt the appropriate arrangements. The extension shall be announced in accordance with paragraph 2. '

Fifteen. Article 21 is amended as follows:

" Article 21. Irrevocability and terms of the offer.

The takeover bids will be irrevocable without any modification, withdrawal or cessation of effects, but in the cases and form provided for in this royal decree.

Without prejudice to the foregoing, it is permissible to subject the effectiveness of public procurement bids to conditions whose compliance implies the adoption of agreements by the social bodies of the offeree company. "

Sixteen. Article 24 (2), Disisgation and cessation of the effects of the offer, is worded as follows:

" 2. Without prejudice to the provisions of paragraph 2 of the preceding Article, the tender shall have no effect as to the extent to which the minimum volume of capital to which it has been conditioned has not been accepted, except where the offeror is in liquidation. renounces the condition by acquiring all the offered values.

In the case of other conditions imposed, the offer shall be without effect when the last day of the acceptance period, if any extended as provided for in this royal decree, the conditions have not been met, except that the offeror renounces this compliance. In the latter case, the provisions of Article 22.6 shall apply. '

seventeen. Article 30 (1), negative result of the offer, shall be as follows:

" 1. In the event that the offer has no effect for the minimum number of values to which it has been conditioned, or, in general, for not having met the conditions imposed, the entities or persons who have received the acceptances shall not be reached. the offeror's account shall be required to return the proof of ownership of the securities to which they have been given by the acceptors.

All expenses for the return will be on behalf of the offeror. "

Eighteen. Article 32 is worded as follows:

" Article 32. Authorisation of the competing bid.

1. The National Securities Market Commission shall authorize the competing public bids and the improvements referred to in Article 36, provided that they comply with the general provisions of this royal decree and the specific provisions contained in this chapter.

2. Persons acting in a concerted manner with the offeror or belonging to the same group, and those who are acting directly or indirectly on behalf of him, may not submit a competing offer.

3. If the competing offer is submitted prior to the publication of the notices of an offer prior to those referred to in Article 18, the National Securities Market Commission shall inform the new offeror, stating that his/her will remain subject to the own arrangements for competing tenders, and shall suspend its processing until the prior offer has been approved.

Published the first offer, the National Securities Market Commission will give a 10-day deadline to the bidder that promoted the competing offer to ratify the conditions of this or, when necessary, to improve it in the the form that determines the following article. "

nineteen. Article 33 is amended as follows:

" Article 33. Conditions of the competing bid.

Any competing offer must meet, at least, each and every one of the following requirements:

(a) That is filed before the 10 calendar days following the beginning of the deadline for acceptance of the last preceding offer, provided that no more than 30 calendar days have elapsed from the beginning of the acceptance of the initial offer.

b) That, having as the object, at least, the same number of values as the last preceding offer and being the consideration offered, at least equal to that of the last preceding offer, improves it, either by raising the price or the value of the offered consideration, either extending the offer to a number of values higher than that of the one.

However, when the improvement is different from the pure increase in the price or from the pure extension of the offer to a higher number of values, an independent expert report should be submitted stating that the offer improves last precedent.

In no case will an improvement be considered when the effectiveness of the offer is conditioned to its acceptance by a higher number of values than the last precedent.

(c) The consideration may be given to any of the modalities provided for in Article 10.

(d) that the time limit for acceptance is one month from the date of publication of the first notice referred to in Article 18. However, where the consideration of the competing offer consists wholly or partly in securities to be issued by the offeror company, the time limit for acceptance of the bid shall be extended in the form set out in Article 10.5. If the time limit for acceptance of the preceding tender is terminated after the tender offer, the time limit for the tender shall be extended until the end of the tender offer. '

Twenty. Article 36 shall have the following

:

" Article 36. Withdrawal and modification of the previous offer.

1. The start of the deadline for acceptance of a competing bid will allow the bidders of the precedents to desist from them, and must communicate it to the National Securities Market Commission and announce it by the means set out in Article 18, all of this in the immediate future since the decision has been taken and, in any event, before the last seven days of the period of acceptance which is applicable, as provided for in Article 3d) and in Article 35.

2. Once the deadline for acceptance of the last competing offer is initiated or after the deadline for submission, any of the bidders, if they do not withdraw their offer, will be able to modify their conditions, provided that they comply with the following conditions: requirements:

(a) To be filed with the National Securities Market Commission on the fifth business day for stock-market purposes.

(b) which, having as their object at least the same number of values as the maximum of the competitors and the consideration offered, at least equal to the best of them, improves the conditions of the competing offer or offers, either by raising the price or the value of the consideration offered by the best of them, or by extending the initial offer to a number of values higher than the maximum of the competitors.

However, when the improvement is different from the pure increase in the price or from the pure extension of the offer to a higher number of values, an independent expert report should be submitted stating that the offer improves last precedent.

In no case will an improvement be considered when the effectiveness of the offer is conditioned to its acceptance by a greater number of values than the maximum of the competitors.

(c) The consideration may take any of the modalities provided for in Article 10.

d) That you obtain authorization from the National Securities Market Commission.

3. Received the new offers, the National Securities Market Commission will agree to the precautionary suspension of the securities trading of the securities affected by the offer, resulting in the application of the conditions set out in Articles 13 and 14.

4. No later than the following working day for stock-market purposes, the National Securities Market Commission shall, at the time when the suspension of the listing is agreed, proceed to the opening of the envelopes, communicate its conditions to all bidders and to the market by a relevant fact, it shall indicate which modified tenders shall be processed to meet the requirements laid down and shall agree to the lifting of the suspension.

In the two working days following the aforementioned communication, each offeror must prove to the National Securities Market Commission the supplementary guarantee which, if applicable, corresponds to the amendment presented.

5. Once the applicant has been notified of the authorization, the applicant must proceed to the dissemination of the new conditions of the offer in accordance with the terms of Article 18. If there are several bidders who make changes, both the authorisation and the dissemination of the new conditions will have to take place on the same dates.

6. If the new conditions are released, the acceptance declarations which have been made in respect of the offer or offers above may be revoked.

7. The time limit for acceptance of the competing tenders shall be extended to 15 calendar days following the publication of the notices referred to in paragraph 5, and the offeror, if appropriate, shall extend the period of acceptance as applicable in accordance with the provisions of Articles 33. (d) and 35 in the form provided for in Article 19.2.

8. The obligation on the part of the management body of the offeree company to issue a report, in accordance with Article 20, shall apply to tenders covered by this Article, but the time limit for the publication of the report the management body of the offeree company shall be five calendar days from the date on which it receives the communication concerning the authorisation of the amendment.

9. Without prejudice to Article 34, unless otherwise expressly stated, subject to the same conditions as initially laid down for the acceptance of each of the tenders, the addressees of the tenders shall be deemed to have been accepted in advance of their amendments are adhered to the respective amended offers. "

Twenty-one. The following final paragraph is added to Article 40 (2), Suspension of political

:

" In the cases of Article 3 (5) and (6), the suspension of political rights will not occur as long as the two-month period provided for in order to request the National Securities and Exchange Commission to authorize a public procurement offer under the conditions laid down in paragraph 7 of that Article. '

Single transient arrangement. Arrangements for the tenders in question.

The provisions of this royal decree shall not apply to public procurement bids for which authorization was requested prior to the date of its entry into force, nor to its competing offers.

Final disposition first. Competitive titles.

This royal decree is issued under the jurisdiction of article 149.1.6. and 11. of the Constitution.

Final disposition second. Entry into force.

This royal decree will enter into force on the day following its publication in the "Official State Gazette".

Given in Madrid, 11 April 2003.

JOHN CARLOS R.

The Second Vice President of the Government for Economic Affairs and Minister of Economy,

RODRIGO DE RATO Y FIGAREDO