The following Corporate practice note provides comprehensive and up to date legal information covering:
This Practice Note, produced with input from Rebecca Cousin of Slaughter and May on market practice, discusses some of the main defensive tactics an offeree might seek to deploy when facing an imminent or actual unwelcome takeover offer and looks at the legal and regulatory restrictions on the taking of defensive action.
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 City Code on Takeovers and Mergers (Code).
The Code contains restrictions on frustrating action, which limit the extent to which an offeree may take action which may frustrate an offer without the consent of its shareholders, and which have particular application in the context of an unwelcome takeover offer. Frustrating action can take many forms, but is generally action which reduces the value of the offeree to the offeror in some way, or makes the offeree more expensive or difficult to acquire.
General Principle 3, of the Code states that:
‘the board of directors of an offeree company must act in the interests of the company as a
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On 29 August 2015, the Prudential Regulation Authority (PRA) published the PRA Rulebook (Rulebook). The transition from the Handbook to the Rulebook was intended to benefit PRA-authorised firms, to access clearer and more concise rules. Alongside the Rulebook, supervisory statements and statements
Tipping off and prejudicing an investigationIt would undermine the benefit to the authorities if, a suspicious activity report (SAR) having been made, the alleged offender were to be made aware of the interest in their activities so that they could take steps to cover up their misdeeds or disappear.
What is a res judicata?A res judicata is a decision given by a judge or tribunal with jurisdiction over the cause of action and the parties, which disposes, with finality, of a matter decided so that it cannot be re-litigated by those bound by the judgment, except on appeal.Final judgments by
For guidance on the basic features of the doctrine of estoppel and the different classifications it has been subject to, see Practice Note: Estoppel—what, when and how to plead and related content.Promissory estoppel—what is it?Where A has, by words or conduct, made to B a clear and unequivocal
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