The London Takeover Panel has relinquished its right to regulate
offers for Irish companies in favour of the new Irish Takeover
Panel
"Directors of Irish companies involved in takeovers
may need to become more conscious of their fiduciary duties and
responsibilities in takeover situations ..."
As a consequence of the formal separation of the
Irish Stock Exchange from the London Stock Exchange in December
1995, the Irish Dail has enacted the Irish Takeover Panel Act 1997
(the "Act"). The Act, provides for the formation of a statutory
Irish Takeover Panel ("Panel") to monitor and supervise takeovers
of certain Irish companies. Broadly speaking, these are defined as
companies whose shares are listed on "prescribed exchanges": the
Irish Stock Exchange, the new Developing Company Market and the
Exploration Market, as well as companies whose shares are traded on
a prescribed exchange during the five year period preceding the
date of the offer. The Panel commenced operations on 1 July
1997.
The Panel's responsibilities will include
supervision of takeovers, partial offers, substantial acquisitions
of shares, and other transactions where "control" of a company (a
holding of 30% or more of the voting rights in that company) is
acquired.
The London Takeover Panel announced on 27 June 1997
that, unless a firm intention to make an offer for a relevant Irish
company was published by midnight on 30 June 1997, the London
Takeover Panel would thereafter cease to be the regulatory
authority in respect of offers for Irish companies.
Directors of Irish companies involved in takeovers
may need to become more conscious of their fiduciary duties and
responsibilities in takeover situations, as shareholders may rely
on the Act to establish that there has been a breach of the duties
owed to them, and maybe seek personal redress from the
directors.
It is interesting to note that the placing of the
London Takeover Panel's functions on a statutory footing is widely
opposed in the City. This is on the basis that incorporating
general principles designed to be interpreted in a purposive and
flexible manner in a statute would require them to be interpreted
and applied strictly. This would enable bidders and targets to seek
judicial review of the London Takeover Panel's decisions with
greater ease than they currently do, thereby making takeovers more
lengthy, costly and their outcome more uncertain.