Takeover Panel announces launch of periodic Panel Bulletins
On 11 October 2021, the Takeover Panel (the "Panel") announced that, in addition to its Practice Statements (which provide informal guidance as to the interpretation and application of the Takeover Code (the "Code")), the Panel Executive will publish 'Panel Bulletins' from time to time going forwards. The purpose of these publications will be to remind practitioners and market participants of the operation of specific provisions of the Code and will reflect issues addressed by the Panel on transactions. Importantly (and distinct from its Practice Statements, for example), the Panel has made clear that these bulletins do not entail amendments to the interpretation or application of the Code itself.
The Panel Executive published its first two Panel Bulletins on 11 October, further details of which are below.
Panel Bulletin 1
The first Bulletin focusses on the requirements in relation to meetings and telephone calls with shareholders; this was prompted following recent cases where the Panel became aware that meetings or calls had taken place between the management of a party to an offer and the offeror (or offeree shareholders) without appropriate arrangements in place, such as the attendance of appropriate advisers, or where Rule 20.2 confirmations were given without due care and consideration.
In this regard, the Bulletin re-iterates that:
- parties to offers must ensure equality of information to offeree company shareholders during the offer period;
- financial advisers and corporate brokers are responsible for ensuring that no material new information or significant new opinions are provided in meetings or calls with shareholders; and
- financial advisers are responsible for ensuring that their clients are appropriately briefed about the requirements of the Takeover Code.
Panel Bulletin 2
The second Bulletin focuses on management buy-outs or similar transactions. Financial advisers are reminded of the importance of consulting the Panel Executive at an early stage in any situation where a transaction could be regarded as a management buy-out or similar transaction, so that an agreement can be reached on which Code rules will apply. This will help to ensure:
- that offeree company shareholders are able to rely on there being a level playing field between different types of offerors;
- that the offeree board has appropriate access to information (as set out in Rules 21.3 and 21.4 of the Code) during the offer period; and
- the independence of the members of the offeree board who provide the required Rule 25.2 opinion on the offer.