Yesterday, the Code Committee of the Takeover Panel (the “Committee”) issued a consultation paper proposing changes to the Takeover Code concerning the communication and distribution of information and opinions during an offer.

The changes are designed to provide greater clarity on the rule governing the equality of information to shareholders and to take into account new advances in the use of the internet, social media and other forms of electronic communication.

The Panel has tightened up its rules to ensure equality of information and although, from a practical perspective, this may increase the burden on companies and advisers to ensure compliance it is unlikely to change anything of substance.

Comments should reach the Committee by 15 April 2016.

Key proposals

Rule 20.1

Where any new material information or significant new opinions are published by or on behalf of an offeror or the offeree company or provided to any shareholder or to the media, that information or opinion must, at the same time, be published in an announcement via a RIS. In addition, any presentation or other document relating to an offer used in any meeting (including any telephone call or meeting held by electronic means) with a shareholder and any article, letter or other written communication relating to an offer provided to the media must be published promptly on a website, regardless of whether it contains any material new information or significant new opinion;

Rule 20.2

The Committee is proposing to introduce a new Rule 20.2 (which will replace current Note 3 to Rule 20.1) extending the requirement for a financial adviser or corporate broker to supervise telephone calls as well as meetings which take place prior to the offer period (provided the meeting or telephone call relates to a possible offer or would not be taking place but for the possible offer); during the offer period but prior to the announcement of a firm offer; or following the announcement of a firm offer if the offer is not recommended or if there is a competitive situation. The Committee proposes to grant the Panel dispensations from these provisions, for example following the announcement of a recommended firm offer where there is no competitive situation and when a meeting or telephone call is attended by advisers only;

Rule 20.3

The Committee is proposing to introduce new rules in relation to videos published by a party to an offer and the use of social media. In essence, if a party publishes a video, it may only do so with the Panel’s prior consent and it should comprise only a director or senior executive reading from a script or participating in a scripted interview. Information or opinions relating to an offer which are published via social media ie. Twitter or Facebook, should be limited to the information and opinions which are published by a party via a RIS or via its website; and

Rule 19.2

The Committee’s proposals are that advertisements would no longer be required to include a directors’ responsibility statement.