Due diligence and disclosure phase on takeover transactions
Due diligence and disclosure phase on takeover transactions

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

  • Due diligence and disclosure phase on takeover transactions
  • Timing
  • What happens during this phase?
  • Due diligence
  • Disclosure
  • Key tasks for lawyers during this phase
  • Who does what?
  • Offeror-controlled due diligence process
  • Offeree-controlled due diligence process

Timing

This Practice Note is part of the Corporate toolkit for public company takeovers. For a more detailed Practice Note on the due diligence process on takeovers, see Practice Note: Due diligence on takeovers.

It is a fundamental concept of the Code that an offeror should announce a firm intention to make an offer only after the most careful and responsible consideration and when it has every reason to believe that it can and will continue to be able to implement the offer, including ensuring that it can fulfil in full any cash consideration.

In addition, although it is common for extensive conditions to be included in takeover documents, an offeror will not be permitted to invoke any condition unless the circumstances giving rise to the right to invoke the condition are of material significance to the offeror in the context of the offer. This is a high threshold and in practice the UK Panel on Takeovers and Mergers (Panel) will only permit an offeror to invoke a condition in exceptional circumstances.

For further details, see Practice Note: Conditions, pre-conditions and terms to an offer—Invoking or waiving conditions.

For these reasons it is important that the due diligence exercise is completed before the offeror announces a firm intention to make an offer.

What happens during this phase?

Due diligence

The due diligence exercise on a public takeover is usually more limited than

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