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19 October 2016
On September 12 2016 the Takeover Panel published the 12th edition of the Takeover Code, replacing in its entirety the previous edition published in September 2011 in the wake of Kraft's takeover of Cadbury.
Over the past five years, the code and the panel's practice statements have been amended on a number of occasions. While not as far-reaching as the amendments that were introduced in September 2011, amendments to the 11th edition of the code have focused on:
The amendments also included a number of miscellaneous changes to reflect customary panel practice and interpretations of the code.
The new 12th edition of the code includes the final text of the amendments that came into effect on September 12 2016 relating to the communication and distribution of information during an offer. The panel published a consultation paper (PCP 2016/1) on the proposed changes in February 2016 and confirmed the proposed adoption of the changes, subject to certain modifications, in a response statement (RS 2016/1) published in July 2016. The key elements of the new rules are summarised below.
Following the panel's February 2016 consultation, the code now provides as follows:
In PCP 2016/1, the panel recognised that in certain circumstances it would be appropriate for information or opinions to be provided in confidence by a party to an offer to a relevant person. The code now provides as follows:
The rules on the publication of advertisements have been amended in the code. Specifically, the panel has:
The code also provides that videos, webcasts and audio-only communications published by the bidder or the target which include information or opinions relating to an offer or to the financial performance of a party to an offer must comprise only a director or senior executive reading from a script or participating in a scripted interview. Any such video, webcast or communication may be published only with the panel's consent and must be published on a website.
In addition, the code now states that any information or opinions relating to an offer published by the bidder or the target via social media should be limited to the information and opinions which have been published via an RIS announcement or on its website. Such information or opinions must be prepared with the highest standards of care and accuracy, and must be adequately and fairly presented.
The panel has amended the code requirements that meetings (whether physical or virtual) between the bidder or the target and a relevant person be attended by the financial adviser or corporate broker to the bidder or the target (as appropriate), and that such adviser or broker confirm in writing to the panel that no material new information was provided and no significant new opinions were expressed during such a meeting. Specifically, the code now provides that:
For further information on this topic please contact Will Pearce or William Tong at Davis Polk & Wardwell London LLP by telephone (+44 20 7418 1300) or email (firstname.lastname@example.org or email@example.com). The Davis Polk & Wardwell website can be accessed at www.davispolk.com.
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