On December 14 2016 the UK Takeover Panel published Panel Statement 2016/9 prescribing new checklists and supplementary forms to be completed and submitted to the panel by the financial adviser to the bidder or the target (as appropriate), together with the documents required to be sent to the panel under Rule 30.5 of the Takeover Code.
Rule 30.5(a) relates to the distribution of documents, announcements and information to the panel. Specifically, it provides that before an offer document is published, a hard copy and electronic copy of such document must be sent to the panel.
In addition, Rule 30.5(b) states that copies of all other documents, announcements and information published in connection with an offer by (or on behalf of) the bidder or the target must, at the time of publication, be sent in hard copy and electronic form to the panel.
The Note on Rule 30.5 adds that where information is incorporated into such documents by reference to another source of information, a copy of the information so incorporated should be sent to the panel at the same time.
Panel Statement 2016/9 prescribes new checklists and supplementary forms to be completed and submitted to the panel by the financial adviser to the bidder or the target (as appropriate), together with the documents required to be sent to the Panel under Rule 30.5. The checklists relate to:
- firm offer announcements;
- offer documents and offeree board circulars;
- scheme circulars; and
- Rule 15 offers and proposals.
In addition, if an announcement or other relevant document includes a profit forecast, a qualified financial benefits statement, an asset valuation or a partial offer, a supplementary form must be completed by the target's financial adviser and attached to the relevant checklist to be submitted by the bidder's financial adviser.
Both the new checklists and supplementary forms can be downloaded at www.thetakeoverpanel.org.uk/checklists.
The panel has noted that:
- the checklists and forms require advisers to confirm and explain compliance with the relevant provisions of the code;
- they should be used with immediate effect;
- they are not intended to be used to 'pre-vet' announcements or documents; and
- it will continue its existing practice of only pre-vetting 'whitewash' circulars and documents sent to shareholders in relation to a proposed re-registration or code waiver.
Information on how to complete the checklists and supplementary forms and submit them to the panel is set out on the panel's website at www.thetakeoverpanel.org.uk/checklists/how-to-complete.
The panel has noted that:
- the checklists and forms should clearly identify where in the announcement or document the relevant information is located;
- if a code provision is not applicable, the comments column in the checklists and forms should be used to explain briefly why such provision is not applicable;
- the completed checklists must be approved (signed) by a representative of the relevant financial adviser before they are submitted to the panel;
- by signing the checklist, the financial adviser confirms that:
- the checklist (and the supplementary forms attached to it) has been completed in accordance with the panel's guidance on how to complete checklists and supplementary forms as set out on its website; and
- it is responsible for, and can be contacted in respect of, any aspect of the relevant section of the checklist for which it has approved.
The panel has also noted that in some instances (eg, where there is a joint offer document) a checklist may require the signature of the representatives of both the financial adviser to the bidder and the financial adviser to the target. If so, the panel expects that only one checklist will be submitted and it is up to the parties to coordinate how this is done.
Rule 30.5 documents, together with the checklists and forms, are to be emailed to firstname.lastname@example.org and hard copies sent to the panel as follows:
- offer document or scheme circular (recommended) – eight copies;
- offer document, offeree board circular or scheme circular (unilateral) – 12 copies; and
- revised offer document or offeree board circular – eight copies.
Paragraph 3(f) of the introduction to the code states that: "Financial advisers to whom the Code applies have a particular responsibility to comply with the Code and to ensure, so far as they are responsibly able, that their client and its directors are aware of their responsibilities under the Code and will comply with them."
Panel Statement 2016/9 makes it clear that such responsibility extends to ensuring that the checklists and forms for Rule 30.5 documents are completed in accordance with the panel's guidance on its website. By extension, financial advisers are also responsible for ensuring that the contents of the relevant announcement, document or information comply with the code. Financial advisers would therefore be well advised to review the panel's guidance on its checklists and forms to ensure that they properly discharge their duties under the code in such situations. Failure to do so may, depending on the nature of the breach, include the panel issuing a statement, censuring the financial advisers.
For further information on this topic please contact Will Pearce or William Tong at Davis Polk & Wardwell London LLP by telephone (+44 20 7418 1300) or email (email@example.com or firstname.lastname@example.org). The Davis Polk & Wardwell website can be accessed at www.davispolk.com.
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