In the October 2017 edition of Governance & Securities Law Focus, we discussed certain proposed changes to the Code that the U.K. Takeover Panel (the "Panel") was consulting on, with respect to, among other things:
- Stopping a bidder circumventing restrictions under the Code that would prevent it making or varying an offer, by instead purchasing "significant assets" of the target.
- Where a target, in competition with a
takeover offer for it, has agreed to the sale of all or
substantially all of its assets:
- requiring the target to make greater disclosure about any statements that it makes about the cash sum it would propose to return to shareholders as a result of the asset sale; and
- restricting a purchaser of those assets from acquiring shares in the target in certain circumstances.
- Requiring greater disclosure about transactions by targets which take place during offer periods (or when an offer may be imminent).
- Requiring greater disclosure by bidders of their future intentions with regard to the target and its operations, and requiring this to be made earlier in the bid process.
- Unless the target agrees otherwise, requiring a bidder to delay by 14 days the posting of its offer document following the announcement of its firm intention to make an offer.
On 11 December 2017, the Panel announced that it would be proceeding with these proposed changes with few relatively minor revisions to them and that they would take effect on 8 January 2018.
The Panel also announced the issue of a new Practice Statement (No. 32) dealing with the question of when a target will no longer be subject to the restrictions and prohibitions under Rule 21.1 of the Code on it taking potentially "frustrating action" (e.g., an asset disposal or acquisition) with respect to a potential bid. Practice Statements provide informal guidance as to how the Panel interprets and applies relevant provisions of the Code but are not binding on the Panel.
Our client publication about these changes to the Code and the new Practice Statement can be accessed here:
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