A NOTEPAD ON COMPANY AND FINANCIAL LAW, NEWS AND REGULATION
On 22 April 2013 the Code Committee of the Takeover Panel published Response Statement 2012/2 on pension scheme issues, confirming the changes that will be made to the Code with effect from 20 May 2013.
A good note by Freshfields summarising those changes is here.
A detailed account from the New York Times of the provisions in the Dell acquisition agreement that seek to encourage a competing bid and to avoid the impression that this is an MBO “on the cheap”,
Following HP’s allegations of “serious accounting improprieties, misrepresentation and disclosure failures” at its recently-acquired Autonomy business (which, together with Autonomy’s founder’s rebuttal, we reported on here), the Financial Reporting Council today launched an investigation:
“into the published financial reporting of Autonomy for the period between 1 January 2009 and 30 June 2011″.
The FRC’s press release is here. Autonony was traded on the London Stock Exchange throughout the period under investigation.
Overview of current position from the NYT. Excerpt:
read more »
A concert party exists, aggregate voting interests of the party must be reduced to less than 30% by disposal, and pending disposal voting rights must be restricted to 29.9% of all rights exercisable.
Panel Executive ruling of 19 December 2012 here.
The Code Committee of the Takeover Panel published on 26 November 2012 its review of the 2011 amendments to the Takeover Code. (We covered those amendments in this post.) The review concludes that:
“The Code Committee believes that, to date, the 2011 Amendments have operated satisfactorily…the Code Committee has asked the Executive to continue to monitor certain areas of practice and to keep a number of the provisions of the Code under review. However, the Code Committee does not intend to propose any immediate changes to the Code as a result of its review of the 2011 Amendments and any future proposals will be brought forward in accordance with the Code Committee’s usual procedures for amending the Code.”
See also: Takeover Code: impact of the reforms, one year on – Clifford Chance analysis
In July 2012 the Code Committee started three consultations on possible changes to the Takeover Code, as we reported here.
The Takeovers Joint Working Party of the City of London Law Society Company Law Sub-Committee and the Law Society of England and Wales’ Standing Committee on Company Law have published their responses to these consultations:
1. Profit forecasts, quantified financial benefits statements, material changes in information and other changes to the Code, PCP2012/1 – response here.
2. Pension scheme trustee issues, PCP 2012/2 – response here.
3. Companies subject to the Takeover Code, PCP 2012/3 – response here.
The review by Lord Heseltine, “No stone left unturned in pursuit of growth”, contains amongst its 89 recommendations the suggestion that the UK Government should make use of its powers under the Enterprise Act 2002 to intervene in mergers raising “public interest considerations”. The Heseltine Review is here (pdf) and the accompanying BIS press release is here. From the Review:
read more »
The Daily Telegraph reports today that the Takeover Panel is to review the rule requiring that a formal takeover be either launched or scrubbed within 28 days of a potential bidder being publicly identified.
A year after fundamental changes to the Takeover Code came into force, aimed at reducing the “siege” of target companies and correcting the balance of power between bidders and targets, Clifford Chance has produced a good overview of the impact of the reforms, which can be downloaded here. Headline points:
read more »
The NYT’s DealBook’s has a useful analysis of why BAE Systems and EADS are pursuing a DLC structure for their proposed merger. Excerpts:
read more »
Goals Soccer Centres plc - the subject of a recommended takeover offer from a newco formed by the Ontario Teachers’ Pension Plan Board – has lost the shareholder vote held at the court meeting to approve the takeover.
Losing a shareholder vote on a recommended takeover effected by scheme of arrangement is very rare; we can’t remember the last time it happened.
Goals Soccer Centres’ announcement is here. The bidder now cannot return for 12 months, or 6 months with the approval of the GSC board and the Takeover Panel (Rule 35 of the Takeover Code).
Follow us on Twitter @CoFinLaw
In July 2010 the Takeover Appeal Board confirmed the Takeover Panel’s three year ”cold-shouldering” of Brian Myerson, Brian Padgett and Daniel Posen. This, only the second “cold-shoulder” in 40 years, triggered MAR 4.3 (Support of the Takeover Panel’s Functions) of the FSA Handbook, which requires that FSA-authorised firms:
“must not act, or continue to act, for any person in connection with a transaction to which the Code applies if the firm has reasonable grounds for believing that the person in question, or his principal, is not complying or is not likely to comply with the Code”.
The effect is that no authorised firm can act for the three individuals on any transaction falling within the Code.
Without any comment or explanation, this reminder appeared on the FSA website on 31 July 2012:
“On 31 July 2012, the Market Monitoring department sent a reminder to all FSA authorised firms setting out key elements of the ‘cold-shouldering’ requirement imposed by the Panel on Takeovers and Mergers in respect of Brian Myerson, Brian Padgett and Daniel Posen in 2010.”
One can only guess at the reason for the reminder…
Follow us on Twitter @CoFinLaw
The Code Committee of the Takeover Panel has today issued three consultation papers:
1. Profit forecasts, quantified financial benefits statements, material changes in information and other changes to the Code, PCP2012/1 – amendments to Code provisions.
2. Pension scheme trustee issues, PCP 2012/2 – proposing to extend the provisions of the Code which apply to employee representatives to apply also to the trustees of the offeree company’s pension schemes.
3. Companies subject to the Takeover Code, PCP 2012/3 – proposing to remove the “residency test” for whether the Code applies to an offer.
The consultations close on 28 September 2012.
On 2 May 2012 it was announced that London-listed Kewill plc had accepted a takeover offer from Kinetic Bidco Limited, a newco vehicle owned by Francisco Fund Partners. The takeover was to be effected by scheme of arrangement, and the Scheme Court Meeting and the General Meeting were held on 25 May 2012, with the Kinetic takeover being approved by Kewill shareholders at those meetings.
The Scheme Court Hearing was duly scheduled for 13 June 2012 (today), which would have completed the scheme of arrangement and the takeover by Kinetic.
However,
read more »
Clifford Change has published a statistical survey on the “Impact of UK Takeover Code – Seven Months On“, looking at how the 56 announced deals since the changes of September 2011 reflect the new features of the Code.
See also: Takeover Code proposed changes: Making hostile offers more difficult
Clinton Cards plc this morning had dealings in its shares suspended on the London Stock Exchange following an overnight coup by American Greetings Corporation – a move which may see AGC acquire some of the Clintons business via a pre-pack administration.
read more »
Gulf Keystone Petroleum’s cash settled scheme to incentivise the directors to sell the company
Government consultation on bringing “the Competition Commission and the OFT’s competition functions into a single organisation and to modernise its competition toolkit”
Report emphasises that the solution to Uniq’s defined benefit scheme deficit will not be appropriate in most cases
AIM company director buys shares a month before possible takeover announced – and three weeks after bidder first made indicative offer
Putting companies under siege is a thing of the past
Invesco let off by the Takeover Panel after accidentally acquiring more than 30% of the voting rights in Chemring Group plc
A fundamental tenet of takeover regulation in the UK is that once a person acquires an interest in shares which carry 30% or more of the voting rights in a company, that person must make an offer for all of the equity share capital of that company. This is the “mandatory offer requirement” contained in Rule 9 of the Takeover Code.
How easy it can be accidentally to stray into Rule 9 mandatory offer territory is illustrated by yesterday’s announcement from Chemring Group plc that Invesco’s holding in Chemring exceeded 30% on 25 November 2011 ”as a result of a purchase coinciding with a share buyback”. I.e., Chemring’s buyback of its own shares, together with Invesco’s purchase in the market, meant that Invesco’s holding went over 30% – and so theoretically triggered the requirement for Invesco to make a mandatory offer.
Fortunately for Invesco, the Panel let them off – as it has discretion to do. From Chemring’s announcement of 30 November 2011:
“This was an inadvertent mistake. Following discussions, the Takeover Panel has confirmed that no mandatory bid under Rule 9 of the Takeover Code for Chemring Group plc is required by Invesco Ltd. Invesco Ltd has taken immediate steps to correct the position by effecting a sale of shares such that its holding in Chemring Group plc decreases to below 30%.”
The problem was already apparent to the market, as on 29 November 2011 this TR-1 (Notificaton of major interest in shares) was released, showing at box 8A that Invesco now had a holding of 30.05% of Chemring’s issued share capital.
Friendly Corporate PSL
To subscribe for our free weekly update e-mail, click here.
Sunday Telegraph reports that the Takeover Panel will consult early next year on extending the Code’s remit to all AIM companies
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.
read more »
Changes to the Takeover Code will come into force on 19 September 2011
Potential offerors will have 28 days to make a bid once changes to the Takeover Code are implemented
Innovative approach to chronic defined benefit pension deficit sees AIM-listed Uniq sold by its 90.2% shareholder, Angel Street, to Greencore in agreed takeover
Takeover Panel guidance on the publication and implementation of Code amendments; expected to come into force on 19 September 2011
Concern over Panel proposal that all potential offerors should be named when an offer period commences
Takeover Panel rules that no reduction in price is allowed even after Fukushima nuclear disaster changes the economics of the deal
Lookers plc ruling anticipates the introduction of the 28 day period in which a potential offeror must make an offer
Government will announce the next steps in its review of corporate governance and economic short-termism in summer 2011
UPDATE September 2011: BIS has now announced that the Kay Review will constitute the continuation of its work on “A Long-Term Focus for Corporate Britain”. The Kay Review will publish an interim report in February 2012 and a final report in July 2012. See this post for details of the Kay Review.
In October 2010 the Department for Business, Innovation and Skills (BIS) launched a review of “corporate governance and economic short-termism” by issuing a call for evidence. In the words of BIS, this review
read more »
Redressing the balance in favour of the offeree company, and improving the offer process
UPDATE 22 July 2011: The changes to the Takeover Code will come into force on 19 September 2011 - see this post.
Sherborne and F&C Asset Management: Requisitioning an EGM and removing directors
Sherborne and F&C Asset Management: Impact of the Takeover Code on shareholder activism
