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
The London Stock Exchange (LSE) is a stock exchange based in London, England. the total market value of all companies trading on the LSE stood at US$3.42 trillion. Its current premises are situated in Paternoster Square close to St Paul's Cath ...
. Many of its provisions are mirrored in the
EU Takeover Directive.
2004/25/EC
/ref> The Code is administered by the Panel on Takeovers and Mergers, which has the authority to enforce compliance and provide guidance on the interpretation of its rules.
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
* Takeover Panel
*'' Hogg v Cramphorn Ltd'' 967Ch 254
*'' Howard Smith Ltd v Ampol Petroleum Ltd'' 974AC 821
*'' Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd'' 991
Year 991 (Roman numerals, CMXCI) was a common year starting on Thursday of the Julian calendar.
Events
* March 1: In Rouen, Pope John XV ratifies the first Peace and Truce of God, Truce of God, between Æthelred the Unready and Richard I o ...
11 ILRM 66, poison pill defence
*'' R v Panel for Takeovers and Mergers Ex p Datafin'' 987QB 815
References
*PL Davies
Paul Lyndon Davies King's Counsel, KC (Hon), British Academy, FBA (born 24 September 1944) is Allen & Overy Professor of Corporate law, Corporate Law Emeritus at the University of Oxford, Emeritus Fellow of Balliol College, Oxford, Emeritus Fello ...
, 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