Welcome to the November edition of our biannual Public Company Update, aimed at directors and in-house counsel of quoted companies, nomads/brokers and sponsors, and other interested corporate finance professionals and intermediaries.

We have been pleased to remain busy over the last six months with Takeover Code and ECM work despite the UK’s referendum decision to leave the European Union in June. In this edition of our Public Company Update, as well as an update on MAR following its implementation on 3 July 2016, we include articles on two Takeover Code related subjects on which we’ve received a number of enquiries. In addition, and in light of the on-going rise of shareholder activism, we provide guidance on how boards can best prepare. Finally, need to know what a Legal Entity Identifier is(?), read our article to find out.

This month we hosted our annual AIM seminar and we were delighted to have Charlie Crawshay, Deputy Director General, The Takeover Panel, who shared insights from The Panel, and Marcus Stuttard, Head of AIM. Our website will be updated very soon with a video from this seminar and a summary note on the presentations.

We are also proud to report that we continue to be ranked highly in many key sectors in the Adviser Rankings Guide – October 2016. We have been ranked 8th for the total number of AIM clients and ranked 6th specifically for Technology clients demonstrating our commitment to growth companies and entrepreneurs.

I very much hope you enjoy this edition of our Public Company Update and find it informative.

Takeover Code: possible offers, firm offers and conditions

The general approach of the City Code on Takeovers and Mergers (the Code) is to treat public statements made by parties to an offer as binding upon them. Accordingly, it is imperative that listed companies and their advisers understand their announcement obligations under rule 2 of the Code, the distinction between “firm offer announcements” (commonly known as Rule 2.7 Announcements) and “possible offer announcements” (commonly known as Rule 2.4 Announcements), as well as the permissibility and enforceability of conditions to an offer.

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Shareholder Activism: Be prepared

Levels of shareholder activism have increased significantly in recent years, with investors in public companies increasingly willing to seek to intervene directly in the management of companies in which they hold shares. A survey by Activist Insight in 2015 found that more than 300 companies worldwide were targeted by activists last year, up from fewer than 150 in 2010.

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Takeover Code: Formal Sale Processes

In the context of reforms made to the Takeover Code (the Code) at the time, the formal sale process (the FSP) was introduced in September 2011 into the UK to facilitate sell-side processes. There is no definition of the FSP in the Code, but essentially it is a process by which a target company announces, prior to receiving an offer, that it is seeking one or more potential offerors by means of an FSP. It provides some flexibility to offeree boards in managing an offer process where they have decided the company should be sold.

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MAR Update: ESMA on delaying disclosure and exchange rate for PDMR €5,000 notification threshold

The last two weeks of October saw ESMA publish its definite Guidelines in relation to delayed disclosure of inside information which apply from 20 December 2016 and additional Questions and Answers on the Market Abuse Regulation (MAR).

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Do you need an LEI (Legal Entity Identifier)?

A brief alert on what a LEI is given that from 1 January 2017, the European Electronic Access Point Delegated Regulation will require the FCA to use LEIs for all issuers that have security admitted to trading on a regulated market.

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