This Practice Note is part of the Corporate toolkit for public company takeovers. For a more detailed Practice Note on hostile takeovers, see Practice Note: Hostile takeovers and defence tactics—the legal and regulatory restrictions.
When a company is, or predicts that it may be, subject to a takeover offer which is, or may become, hostile, it is likely to seek to employ a number of defensive tactics to either see off the offeror altogether or to encourage the offeror to increase its offer.
Such defensive tactics or frustrating actions are limited by both law and the provisions of the Code.
Panel consultation on Rule 21
In October 2023 the Takeover Panel (Panel) published a consultation paper, RS 2023/1, which confirmed that the Panel would be proceeding with various amendments to Rule 21 of the Code set out in its May 2023 consultation paper.
The Panel confirmed amendments to Rule 21.1, which restricts an offeree board from taking any action which may result in an offer or bona fide possible offer being frustrated and from taking certain other specified actions. The
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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Defensive definition
What does Defensive mean?
An investment strategy is ‘defensive’ if it is designed to have a low level of risk (and probably will therefore also have a low expected return).
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