The chair of the Hearings Committee of the Takeover Panel has rejected an appeal (PS 2025/15) against a ruling by the Panel Executive which concluded that Third Point LLC was not required to make a mandatory offer for Third Point Investors Limited (TPIL) in light of a series of transactions which TPIL is undertaking.
The principal function of the Hearings Committee is to review rulings of the Panel Executive. It also hears disputed disciplinary proceedings instituted by the Executive when it considers that there has been a breach of the Code. It is rare to see Hearings Committee rulings – the Panel's annual report for 2024/2025 said that the Hearings Committee was not convened at all in that year. The chair of the Committee can refuse to convene the Committee to hear an appeal where there is no prospect of the appeal succeeding – as happened here.
In this note we look at:
- TPIL and its share capital
- The proposed transactions
- The issues raised with the Panel
- The Panel Executive's conclusions and
- The ruling of the Hearings Committee Chair
TPIL and its share capital
TPIL is a Guernsey closed-ended investment company traded on the London Stock Exchange. Its share capital comprises:
- ordinary shares, which entitle the holders to one vote per share and are listed on the Main Market of the London Stock Exchange; and
- redeemable B shares, which also carry one vote per share except on "Listing Rule reserved matters" – that is where the UK Listing Rules (UKLRs) stipulate that approval of the holders of the listed shares (in this case, the ordinary shares) is required. The B shares are not listed or traded on any stock exchange or market.
Under TPIL's articles of incorporation, the number of B shares in issue must, at all times, represent at least 40% of the aggregate issued number of ordinary shares and B shares. The B shares, which have no economic rights, are held by VoteCo – a Guernsey-based voting company which is mandated to exercise the voting rights attaching to the B shares in the best interests of TPIL and its shareholders as a whole. VoteCo's purpose is to ensure that TPIL retains foreign private issuer status under US securities regulation.
Third Point is TPIL's investment manager and, together with its concert parties, currently holds 15% of the total voting rights, and 25% of the economic rights, of TPIL.
The proposed transactions
TPIL is undertaking a series of transactions:
- Acquisition – TPIL has agreed to acquire Malibu Life Reinsurance (for share consideration). This will result in a fundamental change in business for TPIL, and so is a reverse takeover requiring shareholder approval under UKLR 7.5.1R(2). Malibu is currently owned by Third Point affiliates and so the transaction is also a related party transaction under the UKLRs (requiring an announcement and confirmation that the terms are fair and reasonable, but an independent shareholder vote is no longer required under the new UKLRs introduced in July 2024).
- Redomiciliation – TPIL is redomiciling from Guernsey to the Cayman Islands, again requiring shareholder approval, with the migration taking place at least two business days before completion of the acquisition of Malibu. Its shares will remain listed in London (although as the acquisition constitutes a reverse takeover, its listing in the Closed Ended Investment Funds category will be cancelled on completion of the acquisition and TPIL is applying for admission of its shares to the Equity Shares (Commercial Companies) category).
- Share redemption offer and subscription – TPIL is conducting a redemption offer under which shares worth up to $136 million will be redeemed from those shareholders who wish to exit their investment. Further ordinary shares will also be issued as part of subscription arrangements with, amongst others, certain Third Point affiliates.
Following completion of the transactions, the Third Point concert party is expected to be interested in ordinary shares comprising approximately 26.2% of the total voting rights of TPIL and approximately 43.7% of the economic rights of TPIL.
All requisite shareholder approvals were obtained at a shareholder meeting on 14 August 2025.
The issues raised with the Panel
An investor group including Asset Value Investors made submissions to the Panel Executive arguing that:
- Third Point (and, in turn, the Third Point concert party) is acquiring control of TPIL for the purposes of Rule 9 of the Takeover Code as a consequence of the transactions (on the basis that the B shares should not be considered voting securities for the purposes of Rule 9) and should therefore be required to make a mandatory offer pursuant to Rule 9; and
- whilst the transaction will complete following migration of TPIL from Guernsey (where it is subject to the jurisdiction of the Takeover Code) to the Cayman Islands (where the Takeover Code does not apply), because at the time the transactions were proposed to TPIL shareholdersthe Executive had jurisdiction in respect of TPIL, the Takeover Panel should be able to require that a mandatory offer be made, or that a waiver of the obligation to make a mandatory offer pursuant to Rule 9 be sought.
The Panel Executive's conclusions
The Panel Executive ruled as follows:
- Mandatory offer – The obligation to make a mandatory offer is triggered by the acquisition of an interest in shares which carry 30% or more of the voting rights of a company. Voting rights for these purposes mean all the voting rights attributable to the share capital which are currently exercisable at a general meeting. There is no reason to treat the B shares as not having voting rights, and so even after completion of the proposals, the Third Point concert party will not have acquired an interest in shares carrying 30% of the voting rights in TPIL. It is worth noting in this context that VoteCo is a long-standing arrangement put in place at the time of TPIL's IPO. The FCAdetermined that the B shares were not weighted voting rights for the purposes of the UKLR dual class share structure regime, and in the current Panel consultation paper on the treatment of dual class share structures under the Code (PCP 2025/1), the VoteCo B share structure – a structure also seen in other closed-ended investment funds – was not identified as falling in within the structures needing to be addressed.
- Jurisdiction – Even if that were not the case, the relevant time at which to consider whether a particular transaction is one governed by the Code, for the purpose of deciding whether an obligation to make a Rule 9 offer is triggered, is the point at which that transaction is carried out, and not at some earlier point where it is simply being proposed. While TPIL is currently a company to which the Code applies under section 3(a)(i) of the Introduction to the Code, a consequence of its proposed migration is that at the time of the acquisition, and so at the point at which the Third Point concert party acquires the additional shares, TPIL's domicile and registered office will be in the Cayman Islands. TPIL will not then be a company to which the Code applies.
The ruling of the Hearings Committee Chair
The investor group sought to appeal the Panel Executive ruling. The Executive submitted that the request should be rejected on the basis that the matter has no reasonable prospect of success. The chair of the Hearings Committee concurred, concluding that the Executive's Ruling was plainly correct and that any appeal against it lacked any reasonable prospect of success.
Herbert Smith Freehills Kramer are advising TPIL on the transactions and made submissions to the Panel in connection with these rulings.
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