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 looks at the detailed procedures to be followed to implement the acquisition by a buyer (offeror) of all the shares, or one or more classes of shares, in a company (offeree) which it does not already own under a scheme of arrangement made under Part 26 of the Companies Act 2006 (CA 2006) (scheme).
Unlike a takeover offer, a scheme involves no contract between the offeror and offeree shareholders. Instead, it is a statutory mechanism used to implement a range of corporate transactions. In a takeover context, a scheme is put forward by the offeree to its shareholders, or to the holders of the relevant class of shares. The involvement, and cooperation, of the offeree's board of directors is therefore usually required. A scheme is typified by certain essential characteristics, most significantly that it will require both offeree shareholder approval at a court-convened meeting and sanction by the court itself.
For an explanation of the nature of schemes of arrangement, how they are structured and the key statutory requirements, see Practice Note: Schemes of arrangement—nature and key statutory requirements.
This Practice Note assumes:
that the offeree is subject to the City Code on Takeovers and Mergers (Code)
that there is no requirement to consult with or obtain the consent
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