Takeover Panel Bulletins - Timely reminders

The Takeover Panel Executive has started publishing bulletins which highlight issues that have been identified with specific provisions of the Takeover Code and as reminders of how those provisions should work in practice. See the Panel’s Bulletins page. They serve to highlight to practitioners the way the Rules work (and are not changes in practice or approach) in circumstances where people seem to have “forgotten” their application.

The reminders in Bulletins 1 and 2 (published on 11 October 2021) are:

Rule 20.2 - the Panel Executive has become aware of a small number of cases where meetings or calls have taken place between the management of a party to an offer with offeror or offeree company shareholders without arrangements having been put in place for the meetings or calls to be attended by an appropriate adviser or where confirmations have been given without due care and consideration.

The bulletin reminders are:

• the importance of ensuring equality of information to offeree company shareholders during the course of an offer;

• financial advisers and corporate brokers are responsible for ensuring that no material new information or significant new opinions are provided in meetings or calls with shareholders; and

• financial advisers have a particular responsibility for ensuring that their clients are appropriately briefed about the requirements of the Code.

Management buyouts – several provisions apply to management buy-outs or similar transactions (noted in the bulletin). Although there is no definition of those transactions, offeree company shareholders need to be able to rely on:

• there being a level playing field between different types of offeror;

• the offeree board having appropriate access to information (as set out in Rules 21.3 and 21.4); and

• the independence of those members of the offeree board who are providing the opinion required by Rule 25.2.

This bulletin reminds financial advisers of the importance of consulting the Panel Executive at an early stage in any situation where a transaction could be regarded as a management buy-out or similar transaction in order to agree the application of the relevant Rules.