The Macfarlanes M&A weekly update is a short update on key developments relevant to M&A lawyers. It is a signpost towards matters that may be of interest, with links to more detailed information.

In our last issue this year, we look at the attitudes of FTSE 350 companies as seen through the FT and ICSA’s 10th bi-annual bellweather report, as well as new checklists from the Takeover Panel and a private censure for an AIM company. There will be no issue next week.


ICSA has released its FT-ICSA Boardroom Bellweather Report for Winter 2016. The report is available for download from ICSA’s website.


The FT-ICSA Bellweather Report is a twice-yearly report based on a survey of FTSE 350 companies. It canvasses the views of company secretaries of the FTSE 350 on how their companies are addressing economic and market conditions and responding to the wider business and governance environment. The survey underpinning this report was carried out in the last two weeks of October 2016.

The Economy and Brexit

The report suggests little by way of optimism in the future of the UK economy. Only 8 per cent of respondents predicted any improvement in economic conditions. This is a big drop from 40 per cent back in December 2015. Indeed, 72 per cent of respondents now predict a decline in the economy.

On a more up-beat note, 92 per cent of respondents said they did not intend to move their head office or a substantial part of their business from the UK to the EU as a result of Brexit. This is despite 59 per cent saying leaving the EU would cause damage to their business.

However, it should be noted that those surveyed do not include the many large overseas organisations present in the UK but not listed on the Main Market, nor do they include listed companies outside the FTSE 350 or unlisted companies. 

Board diversity

The survey suggests slow progress on board diversity. 63 per cent of respondents said their board had diversity of gender (down slightly from 68 per cent in December 2015). More significantly, only 22 per cent of respondents saw their board as ethnically diverse (down from 34 per cent in the summer).

In addition, 48 per cent of respondents had not met the target of 25 per cent of women on boards, and 28 per cent were still unable to say that one in five of their directors is female. This M&A WEEKLY UPDATE 16 - 23 DECEMBER 2016 represents little real progress in achieving gender diversity on large listed company boards.

Risk and compliance

The survey shows the different types of risk FTSE 350 companies see as priorities. Cyber risk came top, with 80 per cent of respondents citing it as a concern, followed by social media at 52 per cent and reputation at 51 per cent.


The Takeover Panel has published new checklists and supplementary forms that need to be sent to the Panel when submitting certain kinds of document.


Rule 30.5 of the Takeover Code requires copies of an offer document and certain other documents, announcements and information to be sent to the Panel.

Now, when sending a document to the Panel, a financial adviser will also have to submit the appropriate checklist or supplementary form at the same time. The Panel says that the purpose of the checklists and forms is to help parties to offers, their advisers and the Takeover Panel Executive decide whether the relevant documents comply with the Takeover Code.

Checklists A financial adviser must now submit a checklist when it sends the following documents to the Panel:

  • Firm offer announcement
  • Offer document or offeree board circular
  • Scheme circular
  • Rule 15 offer or proposal

Likewise, it must submit a supplementary form alongside the following documents:

  • Intention statements schedule
  • Profit forecast
  • Quantified financial benefits statement
  • Asset valuation
  • Partial offer

Links to the checklists and supplementary forms can be found on the Panel’s website here. The Panel’s statement (2016/9) can be found here.

Practical implications

Whilst at first these checklists may seem like an additional administrative burden, they are likely to be of tremendous use for offer parties and advisers in ensuring compliance with the Code. By drafting offer-related documents against the checklists, offer parties should be able to reduce discussions over content with the Panel and so minimise disruption to the takeover timeline. However, advisers must be wary of the temptation to use the checklists as a definitive guide to Code requirements. There may be provisions of the Code that are not set out in the checklists. In addition, offer-related documents may need to comply with requirements set out in other regulations, such as the Companies Act 2006, the FCA’s Prospectus Rules and financial promotions legislation. Offer parties will still need to bear these provisions, and the Takeover Code as a whole, in mind. 


The AIM Disciplinary Committee (“ADC”) has issued a private censure to an AIM company for breach of AIM Rule 31. This rule requires an AIM company to (among other things) provide its nominated adviser (nomad) with information reasonably required for the nomad to fulfil its duties to the Exchange. It also requires an AIM company to seek advice from its nomad on compliance with the AIM Rules.

In this case, the ADC found that the company in question should have informed its nomad about a series of business developments which may have been disclosable. AIM Rule 11 requires an AIM company to notify the market without delay of any new developments that are not public knowledge and which, if known, would likely lead to a significant movement on the price of the company’s shares.

Importantly, the ADC’s view was that an AIM company is required to consult its nomad on all developments, whether or not they might be disclosable under AIM Rule 11. The company should not be taking its own view on whether something is disclosable without speaking to its nomad.