On 5 July 2012, the Takeover Panel (‘the Panel’) published three consultation papers containing proposed amendments to the Takeover Code (‘the Code’). Responses to all three consultations are requested by 28 September 2012. It is likely that the changes will come into effect by the end of the year. The consultation papers are as follows:

PCP 2012/1: Profit forecasts, quantified financial benefits statements, material changes in information and other amendments to the Takeover Code

The proposed amendments, which seek to make the Code more consistent with other requirements, will affect reporting on profit forecasts and merger benefit statements and would, for example, extend the existing exemptions for profit estimates to include preliminary estimates that comply with the Listing Rules. It is also proposed that the disclosure of material changes in information published in an offer document or target board circular be made promptly by means of announcement, and not only on the publication of a subsequent document.

Takeover Panel Consultation Paper PCP 2012/1: Profit forecasts, quantified financial benefits statements, material changes in information and other amendments to the Takeover Code available at:

http://www.thetakeoverpanel.org.uk/wp-content/uploads/2008/11/PCP201201.pdf

PCP 2012/2: Pension scheme trustee issues

In order to allow the pension scheme implications of a takeover to be discussed during the course of an offer, the Panel proposes to extend the existing provisions of the Code which benefit the target’s employee representatives to the trustees of the target’s pension scheme.

Takeover Panel Consultation Paper PCP 2012/2: Pension scheme trustee issues available at:

http://www.thetakeoverpanel.org.uk/wp-content/uploads/2008/11/PCP201202.pdf

PCP 2012/3: Companies subject to the Takeover Code

The proposals, which would extend the Panel’s jurisdictional reach, relate to companies with a registered office in the UK, the Channel Islands (‘CI’) or the Isle of Man (‘IOM’) but which are not listed on a regulated market in the UK or on a stock exchange in the CI or the IOM.

The Panel proposes that the current ‘residency’ test be abolished so that the application of the Code to such companies should not, for the future, depend on whether the Panel considers the company to have its place of central management and control, as well as its registered office, in one of those jurisdictions.

The Panel also aims to simplify and clarify the existing provisions of the Code relating to private companies which have their registered office in the UK, CI or IOM. It proposes that the Code should apply:

  • to offers for private companies if the company’s securities have been admitted to trading on a regulated market, or a multilateral trading facility, in the UK, the CI or IOM at any time during the previous 10 years; and
  • to private companies that have filed a prospectus for the issue of securities, or had a prospectus approved by the United Kingdom Listing Authority, during the previous 10 years.

Takeover Panel Consultation Paper PCP 2012/3: Companies subject to the Takeover Code available at:

http://www.thetakeoverpanel.org.uk/wp-content/uploads/2008/11/PCP201203.pdf