Reed Smith Client Alerts

The UK Takeover Panel has published important changes to its rules governing takeovers of public companies in the UK. The most significant changes continue the ongoing theme since 2011 of rebalancing the Takeover Code more in favour of target companies, as well as other stakeholders, such as employees. These amendments will require a bidder to provide more information on its intentions for the target business (and at an earlier stage), will give target boards more time to respond with their views on the bid and will oblige a bidder to report publicly on commitments and statements of intent it makes during the course of a bid. There are also separate changes intended to prevent a bidder circumventing key Code provisions by purchasing a target company's assets after a failed bid, as well as other changes in the detail of the Code. The new rules come into effect on 8 January.

Bidder statements of intention and related matters

The Panel consulted on these changes in PCP 2017/2 in September 2017 and the new rules are contained in RS 2017/2. In the main, the Panel has adopted the amendments as proposed in the consultation, with some modification to the detail. In summary, these are as follows:

  • In addition to stating their intentions about the business, employees, places of business and pension schemes of the target company, bidders must also make specific statements of their intentions for any research and development functions of the target, the location of its headquarters and headquarters functions and any material change in the balance of the skills and functions of the target's employees and management.