The Sunday Telegraph reports today that the Takeover Panel is to consider amending the Takeover Code so that it applies to all companies admitted to trading on the AIM market. At the moment, AIM companies are only subject to the Code – and so their shareholders are only receive the protections that the Code offers – if their place of central management and control (see section 3(a)(ii) of the Introduction to the Code) is in the United Kingdom.
The result is that takeovers of many non-UK AIM companies – including mineral resources companies – are not governed by the Code – although many AIM companies to which the Code does not apply do in fact build equivalent protections into their articles of association or other constitutive documents, as a matter of governance best practice and to reflect investor expectations.
The Sunday Telegraph states that the Panel is intending to consult on this change “early next year” and notes that the Panel declined to comment.
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