Preliminary Observations Regarding Recent Changes to the UK Takeover Regime
By Ronan O'Sullivan, Matthew Poxon & Rebecca Brown
The outcomes of The UK Takeover Panels (the Panel) review of the regulation of takeover bids were implemented and came into effect on 19 September 2011. These changes followed the Panel's review last year of certain fundamental aspects of the UK takeover regime, which in turn followed the highly politicised debates arising out of Kraft's takeover of Cadbury in early 2010. With the possible exception of the prohibition of deal protections (such as break fees), the most significant change to the UK takeover regime is the new requirement that an announcement of a possible offer released by a target must, subject to limited exceptions, identify all offerors who have made an approach and not been rejected.
The rule changes reinforce the importance of secrecy at the initial stages of a potential public acquisition governed by the UK takeover code and appear to be forcing offerors to be more prepared before making their approaches, which may have the unintended consequence of catching potential targets unaware, but does support the stated objective to prevent target companies being under siege for long periods.