Conditions, pre-conditions and terms to an offer
Conditions, pre-conditions and terms to an offer

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

  • Conditions, pre-conditions and terms to an offer
  • Changes to the Code
  • Introduction
  • Pre-conditions in possible offer announcements
  • Pre-conditions in firm offer announcements
  • Conditions
  • Restrictions on subjective conditions and pre-conditions
  • Financing conditions and pre-conditions
  • The acceptance condition
  • Scheme conditions
  • More...

Conditions, pre-conditions and terms to an offer

This Practice Note looks at conditions, pre-conditions and terms typically included in public company takeover offers. It focuses on the most common of these conditions, including the acceptance condition, scheme conditions and commercial and financial conditions, and explains the limitations under the City Code on Takeovers and Mergers (Code) on including, invoking and waiving such conditions. This note also discusses the further terms that are typically included in the offer document, including the availability of withdrawal rights for accepting shareholders.

This Practice Note also includes a high level summary of the treatment of competition references and regulatory clearances under the Code. However, for more detailed guidance on this, see Practice Note: Merger control and the Takeover Code.

Changes to the Code

When consulting on proposed changes to the Code in the light of Brexit, the Panel on Takeovers and Mergers (Panel) decided against amending the Code to align the treatment of European Commission clearances with that of other overseas official authorisations and clearances. However, it said it would be keeping this under review and in October 2020 it published a consultation paper on proposed amendments to the Code, one of which was to apply consistent treatment to all conditions and preconditions relating to official authorisations and clearances. The Panel also published an updated draft Practice Statement 5, which provides guidance on

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