The City Code on Takeovers and Mergers 2010

30 September 2010

Key Issues to be addressed

· The Takeover Panel - Current issues
· The approach, the announcements and independent advice
· Companies and transactions to which the Code applies
· Share dealings, restrictions and disclosure requirements
· Mandatory and voluntary offers and their terms
· Provisions applicable to all offers
· Documents from the offeror and offeree board
· Conduct during the offer
· Contested takeovers

Open Letter from Philip Remnant, Director General, The Panel on Takeovers and Mergers

The essential characteristics of the Panel's system of regulation are flexibility, certainty and speed. The principles-based philosophy which underpins the City Code on Takeovers and Mergers (the "Code") enables the Panel to deal rapidly with new situations and to give the parties to takeovers, and other transactions which are subject to the Code, guidance on a real-time basis. This enables those parties to know how the Code will apply in their particular circumstances in a timely fashion. In the 42 years since its inception, the Code has changed and expanded considerably to take account of changes in market practice. However, the basic principles of the Code, and its ability to react flexibly and promptly to changing circumstances, remain essentially unchanged.

Although the number of firm offers announced during 2009-2010 was relatively low compared to previous years, the regulation of offers for UK companies has been the subject of widespread commentary and public discussion. In the light of this, in June 2010, the Code Committee published a consultation paper on certain aspects of the regulation of takeover offers. If, following this consultation, the Code Committee considers there to be a case for changing the Code, detailed proposals for amendments to the Code will be published in due course.

In addition, the Code Committee proposed and, in some cases, made a number of significant amendments to the Code during 2009-2010. These included:

  • amendments to the disclosure regime to increase transparency by requiring certain new disclosures at the start of offer periods and extending the information required to be given in disclosures; and

  • amendments to relax Code reporting requirements in respect of 'normal course' profit forecasts and asset valuations but to extend such requirements to profit forecasts for part of a business and to statements about the financial effects of certain courses of action.

The Executive also published new practice statements in relation to the syndication of debt during offer periods and shareholder activism.

City & Financial's conference "The City Code on Takeovers and Mergers 2010" will provide a forum for a searching examination of some of the principal elements of the Code and the way in which it is applied. It will also explain the impact of recent changes to the Code and consider those aspects of the Code where further change is currently under contemplation. In doing so, the conference will assist practitioners in keeping up to date with the latest developments in the regulation of takeovers in the UK and other matters that are subject to the Code.

Philip Remnant

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