The following Corporate guidance note provides comprehensive and up to date legal information covering:
Produced with input from Rebecca Cousin of Slaughter and May on market practice.
This Practice Note explains the nature of a scheme of arrangement in a takeover context, describing its statutory basis under the Companies Act 2006 (CA 2006), the various forms of scheme traditionally used and the key requirements for implementing a scheme in relation to a takeover.
There are two primary methods of implementing a takeover of a UK public company:
by way of a contractual takeover offer under CA 2006, s 974 (offer)
by way of a scheme of arrangement under CA 2006, Pt 26 (scheme)
The two structures possess some fundamentally different characteristics and there are advantages and disadvantages to each. See Practice Note: Structuring a takeover—offers vs schemes of arrangement which compares and contrasts the principal features, and advantages and disadvantages, of each structure. Further information on the nature and structure of a contractual takeover offer is set out in Practice Note: Voluntary and partial offers.
Takeovers of a UK public company, whether implemented by way of offer or scheme of arrangement, are usually governed by the City Code on Takeovers and Mergers (Code). For details of how the Code applies to takeovers proceeding as schemes of arrangement rather than offers, see Practice Note: Schemes of arrangement—application of the Takeover Code.
While the acquisition of a UK private or unquoted company
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