Following widespread criticism of the UK takeover regime as a result of Kraft Foods' takeover of Cadbury in 2010, the Code Committee of the Takeover Panel has launched a public consultation seeking views on proposed amendments to the Takeover Code.
The consultation includes a number of proposed amendments to the Code in order to provide greater recognition of the interests of the employees of the offeree by improving the quality of disclosure by offerors and offeree companies in relation to the offeror's intentions regarding the offeree and its employees and improving the ability of employee representatives to make their views known.
The proposals include:
- requiring the offeror to set out its intentions with regard to the employees, including any material changes in their conditions and, if appropriate, a statement that it does not intend to make any changes;
- holding the parties to any statements that they make during the offer period for at least 12 months, for example any statements by the offeror company regarding any course of action that it intends to take or not to take, such as a statement that it will not carry out any redundancies;
- expressly stating that the employee representatives should receive certain documents; and
- making it clear that the Code does not prevent the passing of information in confidence during the offer period to employee representatives.
The consultation closes on 27 May 2011.