Davis Polk & Wardwell LLP


Davis Polk has practiced in London for over 40 years, advising on the majority of marquee capital markets transactions in Europe including the UK Government’s privatisations in the 1980s, technology-related IPOs in the 1990s and recapitalizations of numerous financial institutions in the 2000s. 

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Capital Markets

New prospectus regime – content requirements for equity capital market transactions
European Union | 29 January 2019

The EU Prospectus Regulation's provisions concerning the format and content requirements for prospectuses will come into force on 1 July 2019. Ahead of the provisions, the European Securities and Markets Association intends to publish final draft guidelines on risk factors in early 2019. Issuers and their advisers will then need to ensure that they comply with the new regime in respect of any prospectuses to be published on or after 21 July 2019.

New IPO process in practice: emerging trends?
United Kingdom | 20 November 2018

The Financial Conduct Authority recently implemented changes to the initial public offer (IPO) regime that have had a fundamental impact on the process of conducting an IPO in the United Kingdom. Companies including Aston Martin and Funding Circle have had to negotiate these new rules in practice over the past few months and certain trends are now beginning to emerge.

Corporate Finance/M&A

Public M&A on trial: contested takeover schemes
United Kingdom | 29 January 2020

UK public takeovers can be structured either as a court-approved scheme of arrangement under the Companies Act 2006 or a contractual offer. This article examines two cases which highlight the types of objection raised by shareholders and provide an understanding of the approach taken by the English courts in applying their judicial discretion to sanction a scheme.

Takeover Panel imposes 'cold-shouldering'
United Kingdom | 04 December 2019

The Takeover Panel recently published a panel statement which provides helpful guidance on the factors that it will take into consideration when determining whether a person should be cold-shouldered. Cold-shouldering is the most serious disciplinary power available to the panel and has rarely been used – until now.

Private M&A on trial: interpreting private M&A sale and purchase provisions
United Kingdom | 11 September 2019

Two recent High Court of Justice decisions provide guidance on the interpretation of provisions customarily included in sale and purchase agreements for the acquisition of private companies or businesses. In the first decision, the court considered whether the provisions of a purchase price procedure were conditions precedent. In the second decision, the court considered the scope of a restrictive covenant in an employment agreement and its impact on sale and purchase agreements.

Private M&A on trial: damages for breach of private M&A accounting warranty
United Kingdom | 04 September 2019

The High Court of Justice recently considered two disputes regarding breaches of warranties arising from the acquisitions of private companies. The decisions affirm the orthodoxy that the measure of damages for breach of warranty included in a sale and purchase agreement for the sale of shares is the diminution in the value of the shares purchased but also sound a warning to sellers that have struck a poor economic bargain.

KCOM takeover – Takeover Code default auction process
United Kingdom | 14 August 2019

Since June 2019, Universities Superannuation Scheme and Macquarie have been engaged in a competitive takeover battle for KCOM (a telecoms company). As was the case for the recent Sky takeover, it proceeded to an auction. However, instead of the parties agreeing to their own set of rules for the auction, the Takeover Panel's default auction rules were used, making it the first time that they have been used for a UK takeover.

Takeover Panel: roundup of recent panel statements
United Kingdom | 24 April 2019

The Takeover Panel recently published a revised version of the Takeover Code to reflect amendments relating to the response statement to its October 2018 consultation on asset valuations and the Financial Conduct Authority's announcement that it will phase out the United Kingdom Listing Authority name. In addition, the panel recently published a rule-making instrument concerning the response statement to its consultation on the United Kingdom's withdrawal from the European Union.

Sky takeover – post-offer undertakings
United Kingdom | 06 February 2019

One of the highest profile public M&A transactions of 2018 was the competitive takeover battle between Comcast and Fox for control of Sky, against the backdrop of Disney's proposed merger with Fox. This article looks at the post-offer commitments given by each of the bidders in connection with their competing offers.

Sky takeover – regulating an auction process
United Kingdom | 30 January 2019

One of the highest profile public M&A transactions of 2018 was the competitive takeover battle between Comcast and Fox for control of Sky, against the backdrop of Disney's proposed merger with Fox. As the first competitive process to proceed to an auction since the introduction of the default auction rules into Appendix 8 of the Takeover Code in 2015, the auction for Sky has been watched closely by public M&A practitioners.

Sky takeover – applying the chain principle
United Kingdom | 23 January 2019

One of the highest profile public M&A transactions of 2018 was the competitive takeover battle between Comcast and Fox for the control of Sky, against the backdrop of Disney's proposed merger with Fox. As Disney was proposing to merge with Fox and one of Fox's assets was a 39% stake in Sky (which is subject to the Takeover Code), the Takeover Panel Executive had to consider whether to apply the chain principle to Disney if it successfully acquired Fox.

Takeover Panel seeks to clarify rules on asset valuations
United Kingdom | 14 November 2018

The UK Takeover Panel recently published Public Consultation Paper 2018/1, which sets out several proposed amendments to Rule 29 of the Takeover Code relating to asset valuations. Given that the consultation paper largely seeks to codify current market practice and the approach of the panel to asset valuations, if the code is amended in line with the proposals, such amendments are unlikely to have a material impact on transactions.

Private M&A trends: earn-outs
United Kingdom | 26 September 2018

It is not always possible for a buyer to meet a seller's valuation, especially where the seller is seeking upfront value for expected rather than actual revenue or profit. In these circumstances, the buyer and seller may attempt to bridge the gap and agree the terms of an earn-out. Under a typical earn-out structure for a private M&A transaction, the buyer will make an initial payment of consideration at completion and one or more deferred contingent payments over a specified period following completion.

Private M&A trends: the use of a 'locked box' pricing mechanism
United Kingdom | 12 September 2018

For the sale of a company using a European-style share purchase agreement governed by English law, the use of a 'locked box' as the seller's preferred pricing mechanism is now more commonplace than the traditionally popular closing accounts. The 'locked box' is an alternative pricing mechanism to closing accounts, under which the parties agree a price payable for the target based on a balance sheet that is drawn up and settled between the parties on an agreed date in advance of signing.

Private M&A trends: use of warranty and indemnity insurance
United Kingdom | 05 September 2018

Driven by private equity sellers seeking a clean break and no post-closing liability for a breach of business warranties or under a tax covenant, and by buyers requiring a source of meaningful financial recourse, warranty and indemnity insurance is now a common feature of most private M&A transactions governed by English law. Cover is available for up to the full amount of consideration under a share purchase agreement if required.

Cross-border mergers: recent case law upholding freedom of establishment
United Kingdom | 07 March 2018

The Court of Appeal recently confirmed that a company was entitled to use and benefit from the EU cross-border merger regime for its corporate reorganisation, even though the only cross-border element was the inclusion of a single, dormant foreign entity solely to allow the otherwise domestic reorganisation to benefit from the cross-border rules. The court's purposive approach to the interpretation of the rules may be relevant in a broader context when determining the effectiveness of corporate actions.

Takeover Panel updates rules governing bidder's intentions for target and its business
United Kingdom | 21 February 2018

The existing framework for the regulation of statements governing a bidder's intentions for a target and its business was introduced to the City Code on Takeovers and Mergers in January 2015. The panel recently published Response Statement 2017/2 to its September 2017 consultation on statements of intention and post-offer undertakings. The resulting amendments to the code set out in this response statement took effect on January 8 2018.

Takeover Panel introduces new rules on asset sales
United Kingdom | 14 February 2018

The Takeover Panel recently published Response Statement 2017/1 to its July 2017 consultation on the sale of a target's assets in competition with a takeover offer and related matters. The amendments to the Takeover Code set out in the response statement took effect on January 8 2018 and include measures to prevent a bidder from circumventing the application of the Takeover Code by purchasing a target's significant assets and a target's board from taking any action which may result in an offer being frustrated.

Proposals for tighter rules on foreign investments
United Kingdom | 01 November 2017

The Department for Business, Energy and Industrial Strategy recently published a green paper setting out the government's proposals to reform and strengthen its powers to scrutinise investments in critical businesses and infrastructure which could provide opportunities for foreign investors to "undertake espionage, sabotage or exert inappropriate leverage". The proposals aim to ensure that any national security issues can be considered in a clear, consistent and proportionate way.

Life after Brexit: redomiciling in the European Union
United Kingdom | 16 August 2017

UK groups with members in at least two member states of the European Economic Area can use Societas Europaea or cross-border mergers to redomicile to another European jurisdiction. Both regimes may be helpful to a group looking to redomicile entities to other parts of Europe in the context of Brexit, although both have been the subject of recent judicial decisions regarding the form of transactions which are considered permissible.

Cross-border mergers involving UK companies: recent case law
United Kingdom | 02 August 2017

The EU Directive on Cross-Border Mergers of Limited Liability Companies, implemented by the Companies (Cross-Border Mergers) Regulations 2007 (as amended), has proven to be a popular means of reorganising European group structures and has been occasionally used in arm's-length cross-border transactions. However, recent transactions have tested the boundaries of the sorts of structure that may be permitted under the regulations, which could reduce the popularity of the procedure.

Cross-border mergers involving UK companies: some key questions and answers
United Kingdom | 26 July 2017

A cross-border merger is a transaction involving a true merger of European entities, in which one or more of the participants ceases to exist. In the United Kingdom, cross-border mergers are governed by the Companies (Cross-Border Mergers) Regulations 2007. The procedure has been frequently implemented in connection with solvent reorganisations of group structures. Arm's-length cross-border transactions involving UK companies have also incorporated cross-border mergers.

Public M&A: significant transactions by public companies with a premium listing
United Kingdom | 22 March 2017

For a public company with a premium listing in the United Kingdom, certain M&A transactions – including acquisitions and disposals of shares, businesses or assets – may be subject to Listing Rule 10 and ultimately require prior shareholder approval. In 2016 over 15 acquisitions or disposals where the consideration was £100 million or more were announced by premium listed companies and required shareholder approval under Listing Rule 10.

Takeover panel imposes 'cold shouldering'
United Kingdom | 08 February 2017

The UK Takeover Panel recently published Panel Statement 2017/1, in which it declared the 'cold shouldering' of two defendants to be a breach of the Takeover Code. The statement is helpful in understanding the panel's approach to 'cold shouldering', as the penalty has been imposed on only two previous occasions. Further, the statement is a helpful reminder of the need for thorough and robust 'concert party' analysis in relation to the Takeover Code.

Takeover Panel publishes new checklists and supplementary forms
United Kingdom | 25 January 2017

The UK Takeover Panel recently published Panel Statement 2016/9 prescribing new checklists and supplementary forms to be completed and submitted to the panel by the financial adviser to the bidder or the target (as appropriate), together with the documents required to be sent to the panel under Rule 30.5 of the Takeover Code.

Takeover Panel publishes new edition of Takeover Code
United Kingdom | 19 October 2016

The Takeover Panel recently published the 12th edition of the Takeover Code, replacing in its entirety the previous edition published in the wake of Kraft's takeover of Cadbury. The new edition includes the final text of the amendments that took effect in September 2016 relating to the communication and distribution of information during an offer, including in regards to the equality of information, advertisements and the use of videos and social media and the chaperoning of meetings and communications.

MAC conditions in private M&A transactions
United Kingdom | 03 August 2016

Recent English case law regarding material adverse change (MAC) conditions suggests that parties to acquisition agreements governed by English law should expect provisions to be construed narrowly and as a backstop against significant unforeseen events. A buyer's prospects of protection from adverse changes should be increased if specific and objectively quantifiable criteria are included in the MAC definition.

Brexit: legal implications and potential impact on M&A activity
United Kingdom | 27 July 2016

As a result of ongoing uncertainty around the future of the United Kingdom's relationship with the European Union, a number of M&A transactions with a UK nexus may be affected pending Brexit negotiations. However, with significant fluctuations in exchange rates and share prices, the dislocation in the markets may encourage both opportunistic and defensive M&A transactions.

Takeover Panel consults on communication and distribution of information
United Kingdom | 16 March 2016

The UK Takeover Panel has published a number of proposed amendments to the Takeover Code relating to the communication and distribution of information during an offer by a bidder or target. The purpose of these proposals is to provide greater clarity on the rules governing equality of information to shareholders, and to update the code to reflect developments in the use of social media and other forms of electronic communication.

Private M&A on trial: penalty clauses and indemnities
United Kingdom | 09 March 2016

Two recent decisions are helpful in understanding the English courts' approach to the interpretation of provisions in share purchase agreements. In one, the Supreme Court considered whether certain clauses in a share purchase agreement were unenforceable penalty clauses. In the other, the Court of Appeal ruled on two different interpretations of an indemnity in a share purchase agreement.

Amendments to Takeover Code: dividends, acting in concert and voting rights
United Kingdom | 06 January 2016

The Takeover Panel has confirmed a number of amendments to the Takeover Code in three response statements to 2015 public consultations. The amendments – which relate to the treatment of dividends, the definition of 'acting in concert' and the use of restrictions and suspensions of voting rights to avoid the normal application of Rule 9 – came into effect on November 23 2015.

New guidance on offer-related arrangements and access to information for antitrust analysis
United Kingdom | 28 October 2015

The Takeover Panel has published new guidance explaining its approach to offer-related arrangements, and when a target may provide sensitive information to a bidder's advisers on an 'outside counsel only' basis to assist the bidder in determining whether regulatory consents are required without having to provide such information to a competing bidder in accordance with the principle of equality of treatment of competing bidders.

Private M&A on trial: recent court decisions
United Kingdom | 22 July 2015

The English courts have considered a number of recent cases concerning the interpretation of share purchase agreements, shareholders' agreements and articles of association in the context of private M&A transactions. These cases serve as a useful reminder that the courts will adopt a strict interpretation of contractual provisions on the basis that they have been commercially negotiated between sophisticated parties.

Prohibiting use of cancellation schemes to effect takeovers
United Kingdom | 13 May 2015

New regulations recently came into force which prohibit the use of cancellation schemes to effect public takeovers. A cancellation scheme involves the cancellation of the target's shares by way of a reduction of capital, the application of the reserve arising from such cancellation in paying up a number of new shares in the target and the issue and allotment of such new shares to the bidder.

UK Takeover Code: post-offer statements and miscellaneous changes
United Kingdom | 28 January 2015

A number of changes to the UK takeover regime recently became effective. The first set of changes comprises amendments to the Takeover Code intended to clarify areas of uncertainty and codify current market practice. More significant changes relate to statements made by the parties to an offer relating to a particular course of action which they commit or intend to take after the end of an offer period.

Practice Statement 28 and changes to Takeover Code
United Kingdom | 17 December 2014

The Takeover Panel has published new guidance explaining when a bidder may be permitted to approach a target to reopen takeover talks where it would otherwise be prohibited from doing so. The panel also published a response to its consultation on changes to the Takeover Code, which confirms changes reflecting the development of market practice and tightening the operation of the rules.

Takeover Panel proposes amendments to Takeover Code
United Kingdom | 10 September 2014

Following the 2011 amendments to the Takeover Code, the Takeover Panel has kept further changes to a minimum in order to assess the effect of the reforms, which it believes are working satisfactorily. However, the panel recently published a public consultation paper setting out a number of new changes which largely reflect the development of market practice and tighten the operation of the rules in some cases.

Takeover Panel: real enforcement powers?
United Kingdom | 13 August 2014

The UK Takeover Panel's rules and enforcement powers have once again been in the spotlight recently, following the AbbVie/Shire and Pfizer/AstraZeneca takeover battles. In both cases, the Takeover Code rules concerning statements made by a bidder during the course of the offer – and the panel's ability to enforce the rules and hold a bidder to the statements that it makes – were the subject of extensive public scrutiny.

Takeover Panel issues guidance on directors' irrevocable commitments
United Kingdom | 21 May 2014

The Takeover Panel recently published a practice statement on irrevocable commitments and letters of intent. The practice statement reminds bidders that including any provisions in irrevocable commitments given by directors of the target that are not directed solely at securing that individual's commitment to accept an offer risks breaching the Takeover Code.

Takeover Panel amends profit forecast regime
United Kingdom | 20 November 2013

The UK Takeover Panel recently amended its requirements for profit forecasts and quantified financial benefits statements in the context of transactions governed by the Takeover Code, in some cases relaxing the rules where the forecast is less contentious, but in other respects broadening them. The changes will reduce the burden on parties to an offer where forecasts are less contentious.

Takeover Panel expands scope of Takeover Code
United Kingdom | 06 November 2013

The UK Takeover Panel recently expanded the scope of the UK Takeover Code with the effect of bringing certain companies that were not subject to the code within its jurisdiction. It is still too early to assess whether the code's application will encourage or hinder mergers and acquisitions, but ahead of any possible transaction companies should now consider these amendments.