Takeover Panel publishes miscellaneous amendments to the Takeover Code

The Takeover Panel's Statement 2022/9 announced certain changes to be made following the publication and consultation of Public Consultation Paper 2021/1. The amendments concern in particular: 1) announcing a minimum level that a potential offeror is obliged to offer; 2) restricting a mandatory offeror from obtaining additional interests in shares in the offeree company; and 3) clarifying the application of the "look-back period". For some of the feedback received from the QCA and CLLS on the changes, see our ECM Hub Insight published earlier this year, in March.

These amendments were adopted with clarificatory drafting amendments, mainly relating to the first proposal, requiring the disclosure of any floor price in the announcement that starts the offer period. As the bidder may not have the necessary information to be aware whether a concert party has acquired an interest in the target shares which might trigger a requirement to offer a minimum price, Rule 2.4 of the Code now sets out that the bidder, should he find himself in such a position, shall state this in the announcement and disclose any floor price as soon as practicable.

In February 2022, the Code Committee in Response Statement 2022/1 also proposed amending Rule 4.2(b) of the Code, which underpins Rule 38.2 and lays down a specific prohibition on an offeror dealing in offeree shares with a connected exempt principal trader. The amendment will remove restrictions on an offeror purchasing shares in an offeree company through anonymous order books. For further information on the rationale for implementing these changes and a fuller discussion of its merits, see our ECM Hub Insight published in February this year.

These changes will apply to all companies and transactions from 13 June 2022 onwards, save for any transactions where the amendments would have a retroactive effect.