Amendments to the Takeover Code (September 2011) [Archived]
Amendments to the Takeover Code (September 2011) [Archived]

The following Corporate guidance note provides comprehensive and up to date legal information covering:

  • Amendments to the Takeover Code (September 2011) [Archived]
  • Implementation and transitional arrangements
  • Protection for offerees against protracted 'virtual bid' periods
  • Prohibition on break fees and other offer-related arrangements
  • Disclosure of offer-related fees
  • Financial disclosures
  • Documents on display
  • Offeree board views
  • Disclosure of offeror intentions regarding the offeree's business and its employees
  • Publication of information to employees, and of their views concerning an offer

This Practice Note summarises the important amendments made to the City Code on Takeovers and Mergers (Code) in September 2011. The changes were principally intended to reduce the tactical advantages which some hostile (unrecommended) offerors were felt to have, and to improve the bid process by taking more account of those (other than offeree shareholders) who may be affected by the takeover, such as employees.

This Practice Note focuses on the key changes made to the Code in September 2011. It does not discuss or consider any subsequent amendments to the Code.

Important amendments were made to Code with effect from Monday, 19 September 2011 (Implementation Date). Implementation of these changes, involving the publication of a revised edition of the Code (the tenth edition), followed an extensive consultation exercise instigated by The Panel on Takeovers and Mergers (Panel) in response to concerns raised as to the way in which the Code had been operating. These concerns were given public expression as a result of the manner in which several high profile bids (including Kraft's bid for Cadbury in 2009/10) were conducted.

The amendments (which were more limited in scope than those at one time contemplated), were in principle intended:

  1. to reduce the tactical advantages which it was felt some hostile (unrecommended) offerors had in the bid process over the offeree company and its shareholders,