The Code Committee of the Takeover Panel has published a public consultation paper, PCP 2016/1, setting out proposed amendments to the Takeover Code (the “Code”) with regard to the communication and distribution of information and opinions during an offer by, or on behalf of, an offeror or the offeree company.
The Code Committee considers that rules governing the communication and distribution of information are an essential part of the orderly framework for the conduct of takeovers and that it is important that those requirements are clear, appropriate and reflect technological changes made over time.
Since 2009, when the Code was amended to enable electronic forms of communication to be used and to require a wider use of websites, there have been considerable advances in the use of the internet, social media and other forms of electronic communication. Consequently, a number of the amendments proposed in the PCP seek to bring the Code up-to-date in that regard.
The changes proposed by the Consultation Paper include the following:
- Panel power to require documents to be sent to offeree company shareholders: Introducing a new Rule 30.1(c) to give the Panel the general ability (currently limited to certain specific circumstances) to require that any announcement required to be published under the Code is also sent to the offeree company shareholders.
- Supervision of meetings and telephone calls: Deleting current Note 3 on Rule 20.1 and replacing it with a new Rule 20.2, which would require that, among other things and subject to certain exceptions, a financial adviser or corporate broker to the offeror or offeree will be required to supervise a meeting or telephone call, and subsequently to provide a written confirmation to the Panel that no material new information or significant new opinion was provided at that meeting or telephone call, where the meeting or call is held (1) prior to the offer period (but only if the meeting or call relates to a possible offer or would not be taking place but for the possible offer); (2) during the offer period but prior to announcement of a firm offer, and (3) after announcement of a firm offer, but normally only if the offer is not recommended by the offeree board or if there is a competitive situation.
- Use of video: Introducing a new Rule 20.3 to provide that any video published by an offeree or offeror company in connection with an offer must comprise only a director or senior executive reading from a script or participating in a scripted interview, and must only be published with the Panel’s prior consent.
- Use of social media: Introducing a new Rule 20.4 to provide that social media may only be used by or on behalf of an offeree or offeror to publish (1) the full text of an announcement which has been published via a RIS, (2) the full text of a document which has been published on a website, or (3) links to webpages where such announcement or document can be found.
Comments on the amendments to the Code proposed in the PCP should reach the Code Committee by 15 April 2016.