On 7 January 2003 the Takeover Panel published a Consultation Paper
(PCP12) setting out its proposals to amend Rule 31.9 of the
Takeover Code. The Rule prohibits a target company, without the
consent of the Panel, making announcements about certain
significant matters after Day 39 in the offer timetable, and is
designed to ensure that the bidder and the target shareholders have
available to them at an appropriate time all relevant information
about the target.
During an offer period announcements by the target
of certain positive results or developments in its business could
have the effect of increasing the perceived value of the target's
business, and could therefore cause the bidder and the target
shareholders to change their views of the merits of the offer.
Announcements of relevant information after Day 39 are therefore
discouraged (although they can be made in exceptional
circumstances), in order to ensure that the bidder has time to
consider whether to make a revised offer, and that target
shareholders have time to consider whether to accept the original
offer. The bidder can normally revise its offer up to Day 46 to
take account of such developments.
At present, the matters which are deemed to be
price sensitive and prohibited by Rule 31.9 are announcements of
trading results, profit or dividend forecasts, asset valuations and
proposals for dividend payments. From time to time the Panel has
had to consider whether the list of prohibited matters should be
treated as exhaustive or interpreted more widely to cover other
matters which could also have an effect on the perceived value of
the target. The Panel is therefore consulting on whether the list
should be extended to include announcements of any "material new
information" (such as material acquisitions and disposals) about
the target, and on various consequential amendments that it
believes should follow from such a change. These include changing
Rules 31.5 (no extension statements) and 32.2 (no increase
statements) to allow a bidder to reserve the right not to be bound
by a no extension or no increase statement if the target announces
material new information with the Panel's consent after Day 39; and
allowing the Panel discretion to re-set Day 46 to seven days after
an announcement which is made (with the Panel's consent) after Day
39. Similarly, it is proposed that in a share for share offer the
bidder should not be permitted, without the Panel's consent, to
announce any material new information (which could increase the
value of the securities offered as consideration) after Day 46.
The consultation period closes on 17 February 2003.
Following this, the Panel will publish a Response Statement
containing details of the responses received, the Panel's
conclusions, and any amendments to be made to the Code. The
Consultation Paper can be found on the Panel's website at
http://www.thetakeoverpanel.org.uk/
For further information please contact:
Michael Draper
Corporate Partner
Tel: +44 (0)20 7367 2068
e-mail: [email protected]
Peter Bateman
Corporate Professional Support Lawyer
Tel: +44 (0)20 7367 3145
e-mail: [email protected]