The following Corporate guidance note provides comprehensive and up to date legal information covering:
Rule 28 of the City Code on Takeovers and Mergers (Code) deals with profit forecasts.
The operation of the UK takeover regime may be affected by Brexit, although none of the government’s or Takeover Panel’s proposals directly impact the Takeover Code requirements relating to profit forecasts and quantified financial benefits statements.
For further details, see Practice Note: Brexit—UK takeover regime.
The Code defines 'profit forecast' as a form of words which expressly states or by implication indicates a figure or a minimum or maximum figure for the likely level of profits or losses for the current financial period and/or subsequent financial periods, or contains data from which a calculation of such a figure for future profits or losses may be made, even if no particular figure is mentioned and the word 'profit' is not used. A 'financial period' for these purposes may not necessarily be a specific accounting period.
A statement described as a 'target', 'budget' or similar will normally be treated as a profit forecast, even if it is stated that it is not an indication of the likely level of profits, unless it is clear that the statement is no more than aspirational.
A new Rule 28 was introduced into the Code on 30 September 2013 to achieve greater consistency with other legislation and guidance, and to
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