Recent changes to the Takeover Code

Recent changes to the Takeover Code

Kavita Bassan and Darius Lewington, solicitors in the Lexis®PSLCorporate team, outline what corporate lawyers need to know about the recent changes to the City Code on Takeovers and Mergers introduced by the Code Committee’s latest instrument.

Original news

Takeover Panel published Response Statements on three consultations, LNB News 23/10/2015 126
The Takeover Panel has published amendments to the City Code on Takeovers and Mergers (the Code

), following consultations on dividends, restrictions and suspensions of voting rights and the inclusion of additional presumptions in the definition of ‘acting in concert’. The amendments will take effect on 23 November 2015.

What is the background to the proposed changes?

The Code Committee (the Committee) issued three public consultation papers earlier this year with the aim of amending the Code to clarify the application of certain provisions and codify the existing practice of the Panel Executive (the Executive), in relation to the treatment of dividends, restrictions and suspensions of voting rights and the inclusion of additional presumptions in the definition of 'acting in concert'.
The Executive has adopted the substance of the amendments proposed in the consultations (with some alterations in light of comments from respondents).
The full text of the amendments to the Code are set out in Instrument 2015/3 and a summary of responses and background to the proposed changes are set out in Response Statement 2015/1 (Dividends), Response Statement 2015/2 (Restriction and suspensions of voting rights) and Response Statement 2015/3 (Additional presumptions to the definition of acting in concert)


What are the main changes to the treatment of dividends?

The principal changes are in relation to:

  • requiring certain offer documentation to include a statement of the offeror's rights to reduce the offer consideration by the amount

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About the author:
Jenisa is Head of Market Tracker, a transaction analysis product that sits within Lexis®PSL Corporate. She has over 13 years of legal publishing experience, with a focus on researching and reporting on trends and developments in the corporate and commercial legal market. Previous roles include content developer for Lexis®PSL, Legal Podcaster at Informa, and Research Editor at Practical Law Company where she specialised in reporting on cross-border corporate and commercial developments from the firm’s New York office.