The Takeover Panel (the Panel) is proposing to introduce three new presumptions to the definition of “acting in concert” in the Takeover Code (the Code). The proposals are set out in public consultation paper 2015/3 and are intended to codify existing practices of the Panel. The consultation closes on 11 September 2015.
The term “acting in concert” is fundamental to the application of the Code. In effect, persons who are acting in concert are treated as a single person so that, for example, their interests in shares are aggregated when considering the application of the mandatory offer requirement in Rule 9.1. Similarly, dealings by persons who are acting in concert with a bidder or the target are treated as equivalent to dealings by that bidder or target.
Currently, the definition contains six categories of person who are presumed to be acting in concert with other persons in the same category. These persons are presumed to have such a degree of common interest with one another that they should, in effect, be regarded as a single person. It is, however, possible for any of the presumptions to be rebutted in consultation with the Panel.
Over the years, it has become the Panel's practice to presume certain other persons to be acting in concert with each other even though they are not covered by the existing presumptions in the definition. These persons are:
- a person, the person’s close relatives, and the related trusts of any of them, all with each other,
- the close relatives of a founder of a company to which the Code applies, their close relatives, and the related trusts of any of them, all with each other, and
- shareholders in a private company who sell their shares in that company in consideration for the issue of new shares in a company to which the Code applies, or who, following the re-registration of that company as a public company in connection with an initial public offering or otherwise, become shareholders in a company to which the Code applies.
It is therefore proposed that new presumptions to cover these categories be added to the definition of acting in concert. As with the existing presumptions, it will be possible for any of the proposed presumptions to be rebutted in consultation with the Panel.
A new definition of "close relatives" is also proposed. This is mainly for use in connection with the first category mentioned above, but will also be used in some other provisions of the Code. The consultation paper also proposes some consequential amendments.
To view a copy of the consultation paper click here. Responses should be received by the Panel by 11 September 2015.