May 11, 2011

The Proposed Amendment of the UK Takeover Code

Here’s news culled from this Cleary Gottlieb memo:

On March 21st, the UK Takeover Panel published detailed proposed amendments to the UK Takeover Code. The amendments, which are designed to address concerns that bidders in UK takeovers have achieved a tactical advantage over targets, are expected to be implemented in the second half of 2011. Key proposed amendments include: (i) the banning of break fees, implementation agreements, exclusivity undertakings and other bid related commitments given by target companies; (ii) a requirement for all potential bidders who have approached a target company (and have not been rebuffed) to be publicly identified in possible offer announcements made by a target company at the start of a takeover transaction and (iii) the imposition of a fixed 4 week “put up or shut up” regime to potential bidders who have been publicly identified. The amendments are likely to strengthen the position of target companies in UK takeovers.