Client Alert

Proposed Changes to the UK Takeover Regime

March 28, 2011

Ronan OSullivan & Ross McNaughton

The Takeover Panel (the Panel) has issued its eagerly-awaited consultation paper setting out the details of its proposed changes to the UK takeover regime.

The paper follows the Panels review last year of certain fundamental aspects of the UK takeover regime, which in turn followed the highly politicised debates arising out of Krafts takeover of Cadbury in early 2010. Whilst some of the more controversial proposals initially put forward in the original consultation (such as disenfranchisement of certain shareholdings and raising the offer acceptance threshold) are not being taken forward, the changes arising out of that review and as now set out in detail in the recent paper will significantly alter many aspects of UK market practice once introduced.

Although the paper that has been released is a consultation paper, we do not expect that there will be any significant changes or deviations from the position now proposed by the Panel, other than points of drafting or detail. The consultation period ends on 27 May 2011 and we expect the changes will take effect in the second half of 2011.

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