Corporate weekly highlights—18 October 2018

Corporate weekly highlights—18 October 2018

This week’s edition of Corporate highlights includes news of a Code Committee consultation on proposed changes to Rule 29 of the Takeover Code and a Department for Business, Energy and Industrial Strategy consultation on proposed ethnicity pay reporting, plus our research on which corporate governance code AIM companies are choosing to follow.

In this issue:

Public company takeovers

Code Committee issues public consultation on proposed changes to Rule 29 (asset valuations)

The Code Committee of the Takeover Panel (Code Committee) has published a consultation on proposed amendments to Rule 29 of the Takeover Code (Code) which relates to asset valuations (PCP 2018/1). The deadline for sending comments is 7 December 2018.

Rule 29 requires that when a valuation of assets is given by a party to an offer ‘in connection with an offer’ an independent valuer’s opinion must be provided in support of that valuation. The proposals follow on from the Panel Executive’s review of the purpose and operation of Rule 29. Although the Code Committee agrees with the way that Rule 29 is applied in practice by the Executive, certain aspects of the Executive’s practice are not currently reflected in Rule 29.

The Code Committee proposes deleting the current Rule and replacing it with one which has been drafted broadly so that it is clear that in addition to applying to property valuations it also applies to valuations of other classes of assets, in particular to mineral, oil and gas reserves and unquoted investments.

The proposals include:

  1. that, unless the Panel considers the valuation is not material to the offeree shareholders making a properly formed decision on the merits and demerits of the offer, Rule 29 should apply

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