Takeover Code—Rule 3—Independent advice
Takeover Code—Rule 3—Independent advice

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

  • Takeover Code—Rule 3—Independent advice
  • Brexit impact
  • Mini-index
  • Rule 3—Setting the scene
  • Rule 3.1—Board of the offeree company
  • Rule 3.3—Disqualified advisers
  • Note 1 on Rule 3.3—Independence of adviser
  • Rule 3—Related Code Rules, Notes and Appendices

This Resource Note outlines the main provisions of Rule 3 of The City Code on Takeovers and Mergers (Code), which deals with the requirement for the board of the offeree (and in certain circumstances the offeror) to obtain competent independent advice on the financial terms of an offer. It highlights relevant materials, commentary and guidance from the Panel on Takeovers and Mergers (Panel), as well as Lexis®PSL analysis and resources, to give practical guidance on the interpretation and application of Rule 3.

Materials covered in this Resource Note include:

  1. detailed notes accompanying the Code (Notes), which expand on the intended manner of the implementation of the Rules and relevant Appendices dealing with specific issues

  2. Practice Statements issued by the Panel Executive (the body that carries out the day-to-day work of takeover supervision and regulation) (Executive) to provide informal guidance as to how the Executive normally interprets and applies the Code

  3. Panel Statements published by the Panel (P/S) and Panel Instruments

  4. Public Consultation Papers (PCP) and Response Statements (RS) published by the Code Committee

  5. Annual Reports published by the Panel containing discussion of general issues (Annual Reports)

  6. relevant Lexis®PSL and LexisLibrary resources

Brexit impact

In November 2018 the Panel published a consultation paper, PCP 2018/2, which proposed a number of changes to the Code arising from the UK’s withdrawal from the EU.