The UK public M&A market entered the second half of 2026 on a firmer footing. While deal volumes remained below the exceptional levels seen in previous years, transaction values increased materially, overseas bidders continued to dominate UK takeovers, and both bidders and targets became increasingly sophisticated in managing execution risks relating to regulatory approvals.
Against this backdrop, on 9 July 2026 the Takeover Panel (the Panel) published a Public Consultation Paper (PCP 2026/1), proposing a further package of amendments to the Takeover Code (the Code). The consultation follows the recent changes to the Code that came into force on 4 February 2026. Rather than introducing another round of substantive policy reform, the July consultation focuses on refining the operation of the Code by clarifying existing practice, codifying the Panel Executive’s (Executive) established approach, and updating provisions that no longer fully reflect current market practice or the UK’s evolving regulatory framework. Together, these amendments illustrate the Panel’s continued commitment to keeping the Code clear, proportionate, and responsive to developments in the UK public M&A landscape.
Acting in concert
Note 5
The Panel proposes to amend Note 5 on the definition of “acting in concert” to clarify that only agreements restricting a shareholder from reducing its interest in shares (rather than broader standstill arrangements) will normally give rise to an “acting in concert” presumption. The Panel also clarifies that where a shareholder remains free to accept, or agree to accept, an offer, it will no longer be presumed to be acting in concert with the directors.
The amendment codifies the Executive’s long-standing practice that concerns are less acute where a shareholder is only restricted from increasing its shareholding beyond agreed thresholds or from making an offer for the company. This reflects the view that only restrictions preventing a shareholder from reducing its interest help directors preserve the status quo by limiting shares from passing into “unfriendly” hands, and therefore justify an “acting in concert” presumption.
Voting arrangements
It also clarifies that agreements (even where the arrangement is part of a relationship agreement or settlement agreement with a shareholder) requiring shareholders to vote in line with board recommendations on the appointment or removal of directors will normally result in the shareholder and the directors being treated as “acting in concert”. Although largely codifying existing practice, the amendments provide greater certainty for shareholder arrangements.
Reverse takeovers and equality of information (Rule 21.3)
The current definition of a reverse takeover applies where a Code company issues more than 100% of its voting equity share capital. While the definition makes clear that the offeror needs to be a Code company, it does not specify whether the target needs to be a Code company. The consultation proposes to clarify this definition so that the target can be a Code company, a private company, or a business or assets. However, this change will not affect how the Code operates in practice, but will provide clarity as to how the provisions of the Code that refer to reverse takeovers are applied. This is because the relevant Code rules, including Rule 3.2 and Rules 21.1, 21.2, and 21.3, apply only to a reverse takeover that involves an offer by a Code company for another Code company. In other cases, the Executive already applies existing guidance under Note 2(a)(iii) to Rule 2.8 and Note 1(c) to Rule 35.1 to any acquisitions (not only to a reverse takeover that involves an offer by a Code company for another Code company).
The consultation also expands the equality of information principle in Rule 21.3. It will apply where, as an alternative to an offer, an offeree company intends to acquire a non-Code company, or a business or assets, in consideration for the issue of more than 100% of its voting equity share capital, in the same way that Rule 21.3 applies where the offeree company is in discussions in relation to the sale of all or substantially all of the offeree company’s assets under Note 4 to Rule 21.3.
This reflects the increasingly sophisticated range of strategic options available to boards in today’s market. As competitive processes become more common and boards consider alternatives beyond traditional takeover offers, the Panel is seeking to ensure that all bidders continue to compete on an equal informational footing.
PUSU deadline extensions (Rule 2.6(c))
The “put up or shut up” (PUSU) regime (Rule 2.6(c)) is now well established. The consultation proposes to delete the prescribed list of factors the Panel considers when granting an extension and to remove the requirement for the offeree board to comment on those factors in the extension announcement. The rationale is straightforward: the process is now settled practice and the existing procedural requirements are no longer considered necessary.
Mandatory offer guidance (Rule 9)
The consultation also includes a comprehensive review of the Notes to Rule 9, which govern the mandatory offer regime. Rather than altering the mandatory bid thresholds themselves, the Panel proposes simplifying, shortening, or removing a number of explanatory Notes, while transferring certain guidance on collective shareholder action (Note 2) into Practice Statement 26.
For investors, the significance lies less in any substantive change to the mandatory offer regime and more in making the Code easier to navigate. By separating legal requirements from practical guidance, the Panel aims to improve accessibility without changing the policy that underpins shareholder protection.
“Fair and reasonable” opinions on special deals and management incentivisation (Rule 16)
Where an independent adviser must confirm that special deal terms or management incentivisation arrangements are “fair and reasonable”, the consultation proposes that the opinion must expressly state this is “so far as shareholders are concerned”.
The amendment reinforces that these opinions exist to protect shareholders rather than management or other transaction parties.
Frustrating action restrictions after rejection (Rule 21.1)
Under the current Code, an offeree board is generally restricted from taking actions that could frustrate a takeover offer without shareholder approval or the consent of the Panel. Where a potential offeror has not been publicly identified, however, the point at which those restrictions come to an end has not been expressly addressed during an offer period. The consultation proposes to clarify that, in these circumstances, the restrictions will cease to apply at 5:00 p.m. on the seventh day after the offeree board unequivocally rejects the approach. By aligning the position with the existing regime outside an offer period, the amendment provides greater certainty for boards while ensuring companies are not unnecessarily constrained once an approach has come to an end.
Investment research during offer periods (Rule 28.7)
If a company or bidder publishes profit forecasts on its website during a takeover, the Code currently requires it to remove any forecast written by an analyst connected to a party in the deal as soon as the offer period begins, even if that forecast was already public beforehand.
Instead, the consultation would permit those forecasts to remain available provided any connection between the analyst and a party is disclosed. This strikes a balance between transparency and the reduction of administrative burden during offer periods.
Post-offer asset purchase restrictions (Rule 35.1)
The consultation proposes to clarify Note 1(a) to Rule 35.1, confirming that a former offeror that made an unqualified “no increase” or acceleration statement will not normally be permitted to purchase significant assets from the offeree within three months of the offer lapsing or being withdrawn. This aligns Rule 35.1 with the analogous position under Rule 2.8 (following a “no intention to bid” statement), bringing consistency to the regime even if it temporarily constrains the former offeror’s flexibility.
Other proposed changes
The existing definitions of “UK multilateral trading facility” and “AIM and the AQSE Growth Market” would be replaced with a new “UK primary MTF” definition referencing the Public Offers and Admissions to Trading Regulations 2024.
Two minor changes are also proposed: deleting the redundant requirement in Rule 30.5(c) to separately inform advisers of “out of hours” publications (since electronic distribution under Rule 30.5(b) already ensures immediate receipt), and adding a cross-reference in Rule 32.1(c) to clarify that an offer may be revised after “Day 46” in certain circumstances. Both are aimed at improving clarity and removing procedural duplication.
What’s next?
The outlook for UK public M&A during the remainder of 2026 remains cautiously optimistic. In keeping with this outlook, the consultation represents a refinement rather than a change in regulatory direction. The proposals are intended to improve clarity, consistency, and accessibility while leaving the Code’s core principles unchanged. The consultation closes on Friday, 2 October 2026, giving market participants an opportunity to comment before the amendments are finalised.
Client Alert 2026-153