On 24 July 2013, the Takeover Panel (‘the Panel’) published changes to the Takeover Code (‘the Code’) following its July 2012 consultation paper: Profit forecasts, quantified financial benefits statements, material changes in information and other amendments to the Takeover Code (PCP 2012/1). The changes, which will come into effect on 30 September 2013, introduce a new profit forecast regime, intended to make the regime less burdensome in certain situations, and expand the scope of the regime relating to merger benefit statements.

Profit forecasts

The key changes introduced by the new regime include:

  • new definitions of ‘profit forecast’ and ‘profit estimate’ to bring the Code’s definitions more closely in line with the definitions in the UKLA’s Prospectus Rules;
  • the Code will no longer require reports from the reporting accountant and financial adviser to be included in the offer document or target circular in respect of a profit forecast published before a takeover approach is made;
  • the Panel will also be able to give a dispensation from the profit forecast reporting requirements:
    • where a profit forecast issued after a takeover approach has been made is published in the ‘ordinary course’ of a company’s practice;
    • where the profit forecast is a long term profit forecast i.e. it relates to a period ending more than 15 months from the date of its first publication; and
    • on a securities exchange offer, where the value of the securities offered is not material in relation either to the enlarged share capital of the offeror or to the value of the offer.

Merger benefits statements/quantified financial benefits statements

The changes extend the application of the regime on merger benefit statements to recommended securities offers and to quantified statements made by a target during an offer period as to the financial benefits of the offer not succeeding. The new rules will be incorporated into Rule 28 of the Code and the term ‘merger benefit statements’ changed to ‘quantified financial benefits statement’.

Material changes in information

Other key changes to the Code coming into force at the end of September this year include a change to Rule 27 to require the parties to an offer to make prompt announcement of any material new information, as well as of any material changes to a published offer.

Further details of the changes are set out in the Takeover Panel publications referred to below.

Takeover Panel Response Statement RS 2012/1: Profit forecasts, quantified financial benefits statements and material changes in information available at:


Takeover Panel Instrument 2013/4: Profit forecasts, quantified financial benefits statements and material changes in information available at: