GLOSSARY

Recommended offer definition

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What does Recommended offer mean?

An offer which is recommended to offeree shareholders by the board of directors of the offeree.

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Stakebuilding, irrevocable commitments and letters of intent

Stakebuilding, irrevocable commitments and letters of intent Stakebuilding This Practice Note is part of the Corporate toolkit for public company takeovers. For a more detailed Practice Note on the issues involved in stakebuilding on a takeover, see Practice Note: Dealings in shares—prior to and during an offer. For further information on irrevocable undertakings and letters of intent, see Practice Note: Irrevocable commitments and letters of intent. An offeror may seek to acquire an initial stake in the offeree before the announcement of an offer in order to increase the chances of securing ultimate control of the offeree and deter a competing bid. However, these perceived advantages will need to be weighed against the risk that stakebuilding may cause rumour or speculation in the market and/or an upward movement in the offeree's share price, which may trigger an announcement obligation. In addition, acquiring securities in the offeree may have the following consequences: • acquisitions may establish a minimum offer price or lead to a requirement to offer a specific form of consideration • acquisitions of 30% or more of the voting rights in an offeree may lead to an obligation to make an mandatory offer (see Practice Note: Mandatory offers) • if the bid is structured as a general offer, any shares held by the offeror will not count towards the 90% threshold needed for a successful offeror to exercise its rights

Break fees, deal protection measures and other offer-related arrangements

Break fees, deal protection measures and other offer-related arrangements This Practice Note considers the prohibition on break fees and other deal protection measures (or ‘offer-related arrangements’) under Rule 21.2 of the City Code on Takeovers and Mergers (Code) and the application of Rule 21.2 to schemes of arrangement as established by Appendix 7. Exemptions from the general prohibition are considered, as are circumstances in which dispensations may be granted by the Takeover Panel (Panel), such as those in relation to competing offers or a formal sale process. Background—Takeover Panel consultations Since 11 September 2011 the Code has generally prohibited break fees and other deal protection measures in public takeovers, subject to some specific exceptions. The prohibition was introduced in response to the Panel’s concerns that the increasing use of inducement fee arrangements and other deal protection measures was discouraging potential competing offerors and leaving offeree boards with limited room to facilitate or recommend a competing offer. Rule 21.2—general prohibition on offer-related arrangements Rule 21.2 states that, except with the consent of the Panel, neither the offeree nor any person acting in concert with it may enter into any ‘offer-related arrangement’ with either the offeror or any person acting in concert with it during an offer period or when an offer is reasonably in contemplation. An ‘offer-related arrangement’ is any agreement, arrangement or commitment in connection with an offer, including any break

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Confidentiality and standstill agreement—public company takeover

Confidentiality and standstill agreement—public company takeover [TO BE TYPED ON OFFEROR LETTERHEAD] Strictly private and confidential The Directors [insert offeree name] plc [insert offeree address] Date: [insert date] Dear Directors Confidential supply of information 1 Introduction 1.1 We (the Recipient or we) have expressed an interest in receiving certain information relating to[ the company code-named ][insert offeree name] plc (the Company or you).[ We confirm that we are aware of the identity of the Company and that the use of a code-name in this letter shall not affect its enforceability.] Other defined words and expressions used in this letter are set out in paragraph 2 below. 1.2 This letter, which shall be effective from the date signed by us and the Company, sets out the terms on which the Company is prepared to disclose to us Confidential Information for the purpose of evaluating a possible recommended offer by us for the entire issued and to be issued share capital of the Company (the Proposal). 1.3 We acknowledge that the Company shall be entitled at any time to decline to provide any Confidential Information to the Recipient and may at any time terminate discussions and negotiations with us without incurring any liability to us. 2 Definitions 2.1 In this letter: Advisers • means in relation to any person, the professional advisers and bankers and brokers advising them in relation to the Proposal, including (unless the context requires otherwise) partners in,

Board minutes—takeover—Rule 2.7 (‘firm intention’)—offeror

Board minutes—takeover—Rule 2.7 (‘firm intention’)—offeror [insert company name][ LIMITED OR PLC ] Minutes of a meeting of the board of directors of [insert full name of company] (the Company) held at [insert place of meeting] on [insert date of meeting] at [insert time of meeting][am OR pm] Present: [Insert names of the director(s) physically present][[Insert names of any directors present by telephone as permitted by the Company’s articles of association] (by telephone)] [[Insert names of any directors present by other means permitted by the Company’s articles of association] (by [insert other means])] [ In attendance: ] [[Insert name of anyone in attendance, who does not count towards the quorum for the meeting (eg the company secretary, any legal advisers) (if any)]] [ Apologies: ] [[Insert names of any directors who are unable to attend the meeting (if any)]] 1 Chair, notice and quorum [Insert name] was appointed Chair of the meeting. It was reported that proper notice of the meeting had been given in accordance with the Company’s articles of association (the Articles) and that a quorum was present. Accordingly, the Chair declared the meeting open. 2 Business of the meeting 2.1 The Chair reported that the purpose of the meeting was: 2.1.1 to consider the making of a recommended offer (the Offer) for the issued [ordinary] share capital of [name of offeree company] (the Offeree)[ to be implemented by means of a scheme of arrangement

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In-House weekly highlights—29 April 2021

Welcome to this week’s edition of the In-house weekly highlights, a curated summary of news analysis and new content from across the legal landscape. These highlights focus on key risk & compliance, commercial, corporate, information law and employment developments that will be relevant to most in-house lawyers.

Corporate weekly highlights—29 April 2021

This week’s edition of Corporate weekly highlights includes the approval by the European Parliament of the EU-UK Trade and Co-Operation Agreement, updated guidance from Companies House on its same day services, the publication of a new edition of the Corporate Governance Guidance and Principles for Unlisted Companies in Europe by ecoDa, and an HM Treasury strategic review of the effectiveness of guidance and reduced reporting measures introduced to account preparers in 2020 in response to the coronavirus (COVID-19) pandemic.

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