The Takeover Code, or more formally The City Code on Takeovers and Mergers, is a binding set of rules that apply to listed companies in the United Kingdom, such as those trading on the
London Stock Exchange
London Stock Exchange (LSE) is a stock exchange in the City of London, England, United Kingdom. , the total market value of all companies trading on LSE was £3.9 trillion. Its current premises are situated in Paternoster Square close to St Pa ...
. Many of its provisions are mirrored in the
EU Takeover Directive.
2004/25/EC
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Contents
The code is designed principally to ensure that shareholders are treated fairly and are not denied an opportunity to decide on the merits of a takeover and that shareholders of the same class are afforded equivalent treatment by an offeror. The code also provides an orderly framework within which takeovers are conducted.
*Rule 3, who may advise shareholders on offers or approaches
*Rule 6, acquisitions requiring offer of a minimum level of consideration
*Rule 9, when a mandatory offer is required, and who is responsible to make it
*Rule 10, offer can be declared unconditional once the offeror holds over 50% of the voting shares of the offeree
*Rule 11, when cash or securities are required as the offer
*Rule 14, where there is more than one share capital class
*Rule 16, special deals with favourable conditions
*Rule 21, actions that could have the effect of frustrating a takeover bid require shareholder approval
*Rule 21.3, information provided by the board of the offeree to the recommended offeror must be available to a competing offeror (if one approaches)
*Rule 31.4, offer to remain open for 14 days after unconditional as to acceptances
*Rule 32.3, if the offer is revised all shareholders are entitled to reconsider
*Rule 33.2, shutting off cash underwritten alternatives
*Rule 36, for partial offers, the panel's consent is required
*Rule 37, regulating a company's purchase of own securities
Links
* Rule 3 adviser
* Designated Professional Body
See also
*Mergers and acquisitions in United Kingdom law
Mergers and acquisitions in United Kingdom law refers to a body of law that covers companies, labour, and competition, which is engaged when firms restructure their affairs in the course of business.
Company law
In company law, there are three ma ...
* Takeover Panel
*''Hogg v Cramphorn Ltd
''Hogg v Cramphorn Ltd'' 967Ch 254 is a famous UK company law case on director liability. The Court held that corporate directors who dilute the value of the stock in order to prevent a hostile takeover (the poison pill) are breaching their fidu ...
'' 967
Year 967 ( CMLXVII) was a common year starting on Tuesday (link will display the full calendar) of the Julian calendar.
Events
By place
Europe
* Spring – Emperor Otto I (the Great) calls for a council at Rome, to present the ne ...
Ch 254
*'' Howard Smith Ltd v Ampol Petroleum Ltd'' 974AC 821
*'' Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd'' 99111 ILRM 66, poison pill defence
*'' R v Panel for Takeovers and Mergers Ex p Datafin'' 987
Year 987 ( CMLXXXVII) was a common year starting on Saturday (link will display the full calendar) of the Julian calendar.
Events
By place
Byzantine Empire
* February 7 – Bardas Phokas (the Younger) and Bardas Skleros, two membe ...
QB 815
References
* PL Davies, E Schuster and E Van de Walle de Ghelcke, 'The Takeover Directive as a Protectionist Tool?' (2010
EGCI Working Paper
*D Kershaw, 'The Illusion of Importance' (2007
56 ICLQ 267
*Richard Wachmann,
CBI argues for takeover code to be tightened
(27 July 2010) The Guardian
External links
City Code on Takeovers and MergersThe Takeover Panel website
{{DEFAULTSORT:City Code on Takeovers And Mergers
Economy of the City of London
Mergers and acquisitions
Corporate governance in the United Kingdom