Putting companies under siege is a thing of the past
On 17 February 2012 – following a rise in its share price - Bowleven plc made an announcement (under Rule 2.4 of the Takeover Code) stating that Dragon Oil plc was in the early stages of evaluating an offer for its entire issued share capital. That announcement triggered the start of the 28 day period in which Dragon Oil had to either make an offer or announce that it did not intend to do so.
The introduction of Rule 2.6 – requiring a bid either be made within 28 days of an offer period starting or not be made at all – was one of the principal changes to the Takeover Code that were introduced in September 2011.
Today Dragon Oil made an announcement under Rule 2.8 of the Code, stating that it does not intend to make a bid for Bowleven. Dragon Oil is, as a result, prohibited from making another approach for six months.
This quick outcome to a prospective bid is a far cry from the pre-September 2011 position, where companies could be under siege for months.
Bowleven also made a statement today, clarifying rather brusquely that it didn’t get too far down the aisle with Dragon:
“Bowleven notes the announcement made by Dragon Oil today and confirms that no detailed discussions were held with Dragon Oil and that no due diligence information was provided by Bowleven to Dragon Oil.”
See also: Takeovers: Accidentally triggering the 30% mandatory offer requirement in Rule 9
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