UK: Takeover Panel consults on Code amendments

The Takeover Panel Code Committee has published a consultation paper - see here (pdf) - setting out proposed amendments to the Takeover Code based on the conclusions reached last year following its review of certain aspects of the takeover process (about which see here, pdf). The proposed amendments are intended to:

• Increase the protection for offeree companies against protracted “virtual bid” periods by requiring potential offerors to clarify their position within a short period of time;
• Strengthen the position of the offeree company by [i] prohibiting deal protection measures and inducement fees other than in certain limited cases; and [ii] clarifying that offeree company boards are not limited in the factors that they may take into account in giving their opinion and recommendation on an offer;
• Increase transparency and improve the quality of disclosure by [i] requiring the disclosure of offer-related fees; and [ii] requiring the disclosure of the same financial information in relation to an offeror and the financing of an offer irrespective of the nature of the offer;
• Provide greater recognition of the interests of offeree company employees by [i] improving the quality of disclosure by offerors and offeree companies in relation to the offeror’s intentions regarding the offeree company and its employees; and [ii] improving the ability of employee representatives to make their views known.