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On 4 March 2015, regulations were published that amend the UK Companies Act 2006 to prevent takeovers being effected by a cancellation scheme of arrangement.
On 4 March 2015, regulations were published that amend the UK
Companies Act 2006 to prevent takeovers being effected by a
cancellation scheme of arrangement. This thereby removes the stamp
duty saving which had been obtained by coupling the takeover scheme
of arrangement with a reduction and cancellation of the
target's share capital so as to avoid any transfer of shares
under the scheme.
However, the prohibition will not apply where the scheme amounts
to a restructuring that inserts a new holding company, provided
that "all or substantially all of the members of the company
become members of the parent undertaking".
There are transitional provisions aimed at excluding from this
prohibition takeovers which, before 4 March 2015, were either
"firm" Code offers or non-Code offers the terms of which
(including that they would be made by way of a scheme) had been
agreed between target and bidder.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.