The Takeover Panel has published a consultation paper setting out proposed changes to the Takeover Code and its latest annual report.

Proposed changes to the Takeover Code

On 16 July 2009, the Panel published a consultation paper relating to certain proposed amendments to the Code. The proposed amendments are principally designed either to codify existing practice or to remove possible ambiguity in the application of the Code. The following aspects of the Code are dealt with by the consultation:

  • Note 8 on Rule 9.1 which sets out the limited circumstances in which an offeror may be required to make a mandatory bid for a company in which the offeree company has an interest in a controlling block of shares.
  • Note 6 on Rule 9.1 relating to the possible need by a purchaser of shares to make a mandatory bid for a company where the vendor retains an interest in the company but the purchaser effectively exercises a significant degree of control over the interest retained by the vendor.
  • Note 4 on Rule 16 which sets out, in the context of an offer, the requirement for an independent fair and reasonable opinion and, in certain cases, the sanction of an independent shareholder majority vote in relation to offeree management incentivisation arrangements.
  • Rule 26 regarding the need to put certain documents on public display.
  • Note on Rule 2.7 which specifies when an announced offeror need not proceed to make an offer.
  • Rule 12.2 setting out the obligations and restrictions applicable to an offeror whose offer is allowed to proceed following a competition referral.
  • Rule 31.3 which specifies there is no obligation to extend an offer whose conditions are not met by the first or any subsequent closing date.
  • Rule 25.3(a)(v) which requires directors of an offeree company to state their intentions relating to an offer with regard to their own beneficial shareholdings.
  • Rule 27.1 which requires documents sent by an offeror or offeree, following the offer document or first major offeree board circular, to state any material changes to information previously published by or on behalf of the relevant party during the offer period.
  • Rule 36 relating to partial offers implemented by means of a scheme of arrangement.

The Panel has requested responses to its consultation by 25 September 2009.

View the consultation paper (64 page pdf).

Annual report for year ended 31 March 2009 On 15 July 2009, the Panel published its annual report for the year ended 31 March 2009.

View the annual report (26 page pdf).