Private equity (transactions)—United Kingdom—Q&A guide

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

  • Private equity (transactions)—United Kingdom—Q&A guide
  • 1. What different types of private equity transactions occur in your jurisdiction? What structures are commonly used in private equity investments and acquisitions?
  • 2. What are the implications of corporate governance rules for private equity transactions? Are there any advantages to going private in leveraged buyout or similar transactions? What are the effects of corporate governance rules on companies that, following a private equity transaction, remain or later become public companies?
  • 3. What are some of the issues facing boards of directors of public companies considering entering into a going-private or other private equity transaction? What procedural safeguards, if any, may boards of directors of public companies use when considering such a transaction? What is the role of a special committee in such a transaction where senior management, members of the board or significant shareholders are participating or have an interest in the transaction?
  • 4. Are there heightened disclosure issues in connection with going-private transactions or other private equity transactions?
  • 5. What are the timing considerations for negotiating and completing a going-private or other private equity transaction?
  • 6. What rights do shareholders of a target have to dissent or object to a going-private transaction? How do acquirers address the risks associated with shareholder dissent?
  • 7. What notable purchase agreement provisions are specific to private equity transactions?
  • 8. How can management of the target company participate in a going-private transaction? What are the principal executive compensation issues? Are there timing considerations for when a private equity acquirer should discuss management participation following the completion of a going-private transaction?
  • 9. What are some of the basic tax issues involved in private equity transactions? Give details regarding the tax status of a target, deductibility of interest based on the form of financing and tax issues related to executive compensation. Can share acquisitions be classified as asset acquisitions for tax purposes?
  • More...

Private equity (transactions)—United Kingdom—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to private equity (transactions) in United Kingdom published as part of the Lexology Getting the Deal Through series by Law Business Research (published: February 2021).

Authors: Simpson Thacher & Bartlett LLP—Clare Gaskell; Amy Mahon; Yash Rupal; Kate Sinclair

1. What different types of private equity transactions occur in your jurisdiction? What structures are commonly used in private equity investments and acquisitions?

By 'private equity transaction', we mean an acquisition or disposal whether the buyer or the seller is owned and controlled by a private equity fund.

Most private equity acquisitions are governed by a private sale and purchase agreement, pursuant to which the buyer acquires the holding company of the group. Asset sales are less common: typically, a pre-sale reorganisation would be carried out to ensure all the assets of the target business are housed in a single corporate structure.

Public to private transactions can be effected by a bidder making an offer for the listed company (usually under the City Code on Takeovers and Mergers (the Code), which applies to a UK target whose securities are admitted to trading on a regulated market (eg, the London Stock Exchange) or a multilateral trading facility in the UK (eg, AIM)). An alternative very commonly used in the UK is a scheme of arrangement, which is a statutory procedure

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