Applies once a bid believed to be imminent
Panel consent required for:
- prior decisions fully implemented
- prior decision not fully implemented but in ordinary course of business
- fulfilment of prior obligations
PARTICULAR APPLICATIONS OF R 21
INDUCEMENT FEES (R 21.2)
LITIGATION
INTERIM DIVIDENDS
REFUSING TO OPEN THE COMPANY’S BOOKS
ARTICLE 11
OPTED OUT
IRRATIONAL?
MANAGERIAL DECISIONS – Proper Purposes Rule
VOTING AND TRANSFER RESTRICTIONS – Leave to the Market
ART 11: OPTING BACK IN
RESTRICTIONS IN THE ARTICLES: PUT THE BURDEN ON THE COMPANY
- NO COMPENSATION
- ROLE OF CLASS RIGHTS
CONTRACTUAL RESTRICTIONS
RECIPROCITY: ART 12(3)
REJECTED BY UK
WILL UK COMPANIES OPT INTO ART 11 TO AVOID RECIPROCITY BY FOREIGN TARGETS?
MANDATORY BID: R 9 The longest rule in the Code
Applies at 30% level
Applies to any further acquisition in 30 – 50% range
Price highest paid in 12 months prior to the bid or during the bid period (subject to Panel consent for a different level)
Offer to be in cash/cash alternative
Offer to all classes of equity security, even if non-voting
Conditional only on 50% result
CONCERT PARTIES Longest definition in the Code
Six presumptions of concerted action (which may be relaxed by the Panel)
Group and associated companies
Company and its directors
Company and pension fund
Fund manager and discretionary clients
Advisers and clients
Directors of a target company
INTER-RELATIONSHIP WITH SHAREHOLDER ACTIVISM
RULES APPLY TO ACQUISITIONS OF INTERESTS IN SHARES AS WELL AS THE ACQUISITION OF SHARES
- THIS INCLUDES LONG ECONOMIC EXPOSURES TO SHARES EVEN THOUGH THERE IS NO OWNERSHIP OF THEM (CONTRACTS FOR DIFFERENCES)
PANEL RELAXATIONS
Rule not normally applied to ‘chain acquisitions’
New issues (with shareholder approval)
Rescue operations (with shareholder protection)
Enforcement of security
Enfranchisement
Mistake
THE PANEL AND ART 4
PANEL SHOULD MAKE, INTERPRET, AND APPLY RULES AND HEAR APPEALS WITHOUT EXTERNAL CONTROL
KEEPING THE COURTS OUT AND JUDICIAL REVIEW
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