Structuring issues on takeover transactions
Structuring issues on takeover transactions

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

  • Structuring issues on takeover transactions
  • Offer vs scheme
  • Mandatory offers
  • Forms of consideration
  • Tax
  • Accounting

Structuring issues on takeover transactions

Offer vs scheme

This Practice Note is part of the Corporate toolkit for public company takeovers.

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

  1. by way of a contractual takeover offer under section 974 of the Companies Act 2006 (CA 2006) (offer)

  2. by way of a scheme of arrangement under CA 2006, Pt 26 (scheme)

Offers and schemes are both subject to the Code, although the two processes differ in some fundamental respects. For a comparison of offers and schemes, including their key advantages and disadvantages, see Practice Note: Structuring a takeover—offers vs schemes of arrangement and Checklist: Key advantages and disadvantages of offers and schemes.

An offer is a contractual proposal made by the offeror to the shareholders of the offeree to acquire their shares in return for consideration paid by the offeror (which may be cash, shares, loan notes, a combination, or other consideration).

An offer is made in an offer document issued by the offeror. If the offer becomes or is declared fully unconditional in accordance with its terms, then the

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