A reminder for all of you who are involved with acquisitions or disposals that are governed by the Takeover Code.

The Takeover Panel has been in touch with us to say that they have, on reviewing Rule 15 letters, had a number of cases recently where the description of the target board’s views of the Rule 15 proposal (required to be included by Rule 15(b) of the Takeover Code) has not complied with that Rule.

In those case the reference to competent independent advice has been framed to refer to ‘the directors of [the offeree company], which have been so advised by [financial adviser] as to the financial terms of the Offer/Acquisition, consider the proposals described in the letter to be fair and reasonable’. This is not in accordance with the Takeover Code because it needs to be clear that the adviser provides advice on the financial terms of the proposal made to share plan participants under Rule 15, not of the Offer/Acquisition itself.

The Share Plan Lawyers group agreed model wording with the Takeover Panel at the end of last year. That is set out (along with details of some other points of interest for those involved in public takeovers) in the attached paper.

The Takeover Panel is very keen to ensure that all Rule 15 letters include appropriate wording in relation to the target directors’ views.

I would be grateful if you could pass this message on to any other members of your team who deal with takeover matters.

Jonathan Fenn

Chairman

Share Plan Lawyers

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