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The Uk Takeover Panel & Vince Become Outrageous

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The UK Takeover Panel finally published its proposed changes to the Takeover Code on Tuesday — and perhaps suitably for the post-Kraft era, they’re rather stringent.

Lord Mandelson, the former Business Secretary who inspired them, would be proud.

If he hadn’t been kicked out of office in the meantime, that is.

Nevertheless, it looks like we can still expect a fair old consultative ding-dong fight for the soul of British takeover law. After all, this is the first proposal on offer:


whether the “50% plus one” minimum acceptance condition threshold for a takeover offer should be raised;

. . . an idea which attracted not a little criticism from City deal-makers when it was trial-ballooned a few weeks ago.

Other proposals are fairly hard-hitting:

· whether voting rights should be withheld from shares in an offeree company acquired during the course of an offer period;

So long, top-slicers, hedge funds and arbitrageurs . . .

· whether the 1% trigger threshold for the disclosure of dealings and positions in relevant securities under the Takeover Code’s disclosure regime should be reduced;

· whether offerors should be required to provide more information in relation to the financing of takeover bids and their implications and effects and, as a separate matter, whether the boards of offeree companies should be required to set out their views on an offeror’s intentions for the offeree company in greater detail;

We’re looking at you, Kraft-Cadbury merger-makers . . .

· whether shareholders in an offeree company should be given independent advice on an offer, whether “success fees” should be restricted, and whether details of the fees payable to advisers, and costs generally, in relation to a takeover bid should be disclosed publicly;

· whether some protections similar to those afforded to offeree company shareholders should be afforded to shareholders in an offeror company;

· whether the “put up or shut up” regime should be re-examined and whether the 28 day period between the announcement of a firm intention to make an offer and the publication of the offer document should be reduced;

We’re still looking at you, Kraft-Cadbury merger-makers . . .

· the extent to which inducement fee arrangements and other deal protection measures should be restricted; and

· whether safeguards should be reintroduced in relation to substantial acquisitions of shares.

And that last bit also looks like bad news for arbitrage.

And there’s much, much more to chew on in the full discussion paper.

Have at it, M&A barbarians. At any rate, this is what Vince Cable, the new and sadly not-very-Mandy Business Secretary, had to say on the proposals:

This is not about economic nationalism. Open markets have made a huge contribution to growth in the UK over the past 30 years and must continue to do so in the future. We welcome foreign investors but we want all shareholders to be empowered, the takeover process to be more transparent, directors to think about their wider long term legal duties, and takeovers to be decided on the basis of long term shareholder value rather than short-term speculation.

Now steady on Vince. Empower the minions just because the directors got rich going public? - I'm shocked. It will never happen. Or it will, then get dumped.

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