Structuring a takeover—offers vs schemes of arrangement
Produced in partnership with Julian Henwood of Gowling WLG
Structuring a takeover—offers vs schemes of arrangement

The following Corporate practice note produced in partnership with Julian Henwood of Gowling WLG provides comprehensive and up to date legal information covering:

  • Structuring a takeover—offers vs schemes of arrangement
  • Brexit impact
  • Offers and schemes
  • Offers
  • Schemes
  • Types of scheme
  • Which structure is most commonly used?
  • The basic differences
  • 1. Who leads the process ?
  • 2. Documentation
  • More...

This Practice Note contrasts and compares the principal features of the two most commonly utilised transaction structures for the acquisition of a UK public limited company (or any other company governed by the City Code on Takeovers and Mergers (Code)), ie takeover offers and schemes of arrangement, and examines the key differences between the structures. This Practice Note includes a summary table: Key advantages and disadvantages of offers and schemes, but for a more detailed look at the advantages and disadvantages, from the offeror’s perspective, of effecting a takeover by way of a scheme of arrangement, see Practice Note: Schemes of arrangement—advantages and disadvantages.

Brexit impact

The operation of the UK takeover regime has been affected by Brexit. For the purposes of this Practice Note, the key change is the removal of the ability to passport a prospectus from the UK to the EEA, which may make schemes of arrangement more popular on securities exchange offers where there are offeree shareholders in the EEA. This is because it is generally accepted that the issue of new securities pursuant to a scheme of arrangement under the Companies Act 2006 will not constitute a public offer requiring a prospectus.

For further details on these and other issues, see Practice Note: Brexit—UK takeover regime.

Offers and schemes

There are two primary methods of implementing a takeover of a UK public company:

  1. by

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