Disclosure of interests and dealings in shares prior to and during a takeover
Disclosure of interests and dealings in shares prior to and during a takeover

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

  • Disclosure of interests and dealings in shares prior to and during a takeover
  • Brexit impact
  • Disclosure of interests and dealings
  • Applicable law and regulation
  • Disclosure Guidance and Transparency Rules—DTR 5
  • The Companies Act 2006—sections 791–828
  • The Code—Rule 8
  • Other disclosures or announcements under the Code

Brexit impact

The operation of the UK takeovers regime may be affected by Brexit. For further details of its impact, see Practice Note: Brexit—UK takeover regime. For the purposes of this note, the principal change relates to the companies to which DTR 5 applies. For further details, see: Disclosure Guidance and Transparency Rules—DTR 5 below.

Disclosure of interests and dealings

The disclosure of shareholdings and dealings prior to and during a takeover offer is the subject of substantial and overlapping statute and regulation. The Panel on Takeovers and Mergers (Panel) describes such disclosure as necessary to uphold the General Principle under the Takeover Code (Code) that all parties to an offer must avoid the creation of false markets in the securities of an offeror or offeree.

In practice, the requirement to disclose interests and dealings during a takeover bid primarily seeks to deter the practice of stakebuilding, whereby a person accumulates and warehouses, without public disclosure, a significant shareholding in another company. Building a substantial stake in an offeree in this manner may deprive:

  1. the offeree board of appropriate opportunities to prepare a defence or manage their relationship with a new major shareholder

  2. offeree shareholders of the opportunity to receive an appropriate bid premium on the sale of their shares on a change of control

  3. market participants of relevant