Changes to the UK takeovers regime on 20 May.
Mondaq Business Briefing › Nbr. 2006, January 2006
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Summary
Acquisitions and mergers
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Extract
Changes to the UK takeovers regime on 20 May.
On 20 May important changes will be made to the UK takeovers regime. Principally these result from the implementation of the EU Takeovers Directive, but the Takeover Panel is also taking the opportunity to introduce various other unrelated changes on which it has been consulting.
In summary: For takeovers that fall within the scope of the Directive, the Panel will have greater powers to enforce Code Rules and it will be a criminal offence for an offer document or defence circular not to contain all the information required by certain Code Rules. A different statutory squeeze-out procedure will also apply to such bids. There will be tighter restrictions on a target taking action to frustrate a bid. Where an offer involves a 'special deal' with favourable conditions for some shareholders (such as target management in an MBO), target shareholders will have to vote on the arrangements at an EGM or waive the right to do so. In certain circumstances target employees will be able to submit a written opinion on the implications of an offer, and the target board will have to circulate this opinion to their shareholders with the offer document or defence circular. For financial years beginning on or after 20th May 2006, UK companies with shares quoted on an EU regulated market (in the UK this means the Official List, but not AIM or Ofex) will have to include in their directors' report information about their share structure, the rights attaching to shares, and any rules or arrangements which could affect the success of a takeover bid. I...See the full content of this document
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