UK: shareholder voting rights and takeovers

In 2010 the Takeover Panel Code Committee conducted a review of certain aspects of the regulation of takeovers (here, pdf). One of the questions posed by the Code Committee in its review was whether shares acquired during the course of an offer period should be disenfranchised. In its response to the consultation (here, pdf) the Committee noted that most respondents were against this suggestion and changes to the Takeover Code were not proposed. However, the Code Committee stated that it would be logically consistent for the Code to be amended if qualifying periods (or weighted voting rights) were introduced through company law, thereby leaving the issue in the hands of Government.

It's possible, although probably unlikely, that specific proposals regarding voting rights will be published in July this year when the Government publishes the final report as part of its short-termism review. Meanwhile, in today's Financial Times newspaper, the Labour Party leader, the Rt Hon Ed Miliband, writes that he is considering a proposal to limit shareholders' voting rights during takeovers as well as increasing the threshold required for shareholder approval of a takeover.