UK Public M&A – Navigating the UK Takeover Regime – Early Stage Considerations & Guidance for International Bidders

October 20, 2015

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The UK has and continues to be an open market for international buyers (whether unsolicited or recommended).  Between 2013 and H1 2015, an average of 65% of firm takeover offers for UK listed companies were made by international bidders.  Data from the past decade shows that over half of hostile takeovers result in success for bidders.  Notwithstanding these encouraging statistics, the rules governing UK takeovers, particularly for international acquirers, can appear opaque and a challenge to navigate.  Reports in the press of parties being outed and subject to the "put up or shut up" regime, "being held to statements" or being required to issue "clarificatory statements" can deter the misinformed bidder.  In this Alert we seek to unveil some of the "mythinformation" around UK takeover rules in 10 key areas of particular relevance during the early stages of considering a bid for a UK target.

1.   "It’s good to Talk" – Should we consult the Panel?

Key Points

• The UK Panel on Takeovers and Mergers is responsible for administering the Takeover Code, the statutory-based rules which govern takeovers of UK companies.  The Panel Executive (the Panel), which is primarily staffed by current or former corporate finance practitioners, regulates bids on a day-to-day basis.
• The UK system of takeover regulation is principles-based. The Panel will seek to ensure that the six General Principles which form the cornerstone of the Code are respected in all cases, and an understanding of the principles is essential to deftly navigate the regime.
• Consultation with regulators on takeover bids is not typical nor always helpful under many regulatory regimes. In the UK by contrast, consultation often will prove to be helpful. Derogations, dispensations and waivers are possible from many Code rules subject to consultation with the Panel. The Panel responds on a timely basis to queries and is available for consultation on an "out of office hours" emergency basis.

Guidance/Practical Tips

• In some cases, consultation with the Panel is mandatory.
• Early (and sometimes pre-emptive) consultation with the Panel on certain issues (for example the announcement regime) is recommended. 
• Disciplinary action can follow if bidder fails to consult on a timely basis.
• If there is any doubt as to whether any proposed conduct is in accordance with the Code, consult.

2.   Triggering the Announcement Regime – Can we be prematurely outed?

Key Points

Bidders are typically concerned with the seemingly "fine hair-trigger" into making a public announcement about their intention to make a bid for a UK target.  The commercial consequences of being outed prematurely (e.g. reputational issues in the event of a failed bid, encouraging early competitive tension) is a challenge that bidders need to navigate.  The announcement regime has a number of different layers and elements, and advice from experienced UK public M&A practitioners is advisable.  These are the key questions to consider in determining whether an announcement obligation has been triggered and, if so, the possible consequences.

Q:  When is a bidder or target subject to the leak announcement regime under the Code?

A:  A bidder will be subject to the regime once it starts "actively considering" an offer for the target.  The regime will not apply if the bidder has stopped actively considering an offer.

Q:  Who is responsible – the bidder or target for consulting the Panel and/or making an announcement?

A:  If the bidder has not approached the target, responsibility for consulting the Panel and/or making an announcement will rest with the bidder.  After an approach has been made to the target (assuming the target has not unequivocally rejected the approach), responsibility for consulting the Panel and/or making an announcement will rest with the target.

Q:  What is the trigger for consulting the Panel or making an announcement?

A: Either rumour or speculation about a possible offer for the target (whether or not it names the bidder) or an "untoward movement" in the target’s share price (5% in a single day or 10% since the bidder started "actively considering" or the approach) will trigger a mandatory requirement to consult with the Panel.

Q:  If a bidder’s advisers consult the Panel, what are the possible outcomes a bidder can expect?

A:  There are four possible outcomes: (1) no announcement may be required under the rules following an assessment of the facts; or if an announcement is required, (2) a bidder can make a "possible offer" announcement; or (3) a "no current intention to bid" announcement; or (4) if the Panel agrees, a bidder may be granted a dispensation from making an announcement but will be required to "down tools" on its bid preparation.

Taking these in turn, the Panel may agree with a bidder that no announcement is required under the Code rules.  This would for example be in the case where (pre-approach) the Panel was satisfied that any rumour/speculation or untoward movement in the share price was not as a result of the bidder’s actions in failing to maintain secrecy about its intentions to made a bid.  If the Panel determines that an announcement obligation has been triggered, a bidder has two choices. It can decide that it wishes to make a possible offer announcement, upon which it will become subject to the "put up or shut up" (PUSU) regime. Under the PUSU regime, the bidder will be given 28 calendar days (which can be extended only with both target and Panel consent) to announce a firm intention to make an offer or state that it has no intention to make an offer.  Alternatively, the bidder can walk away by announcing that it has "no current intention of making an offer". In some cases, following an assessment of the facts by the Panel, a bidder may be permitted to stay silent about its intentions but will be required to "down tools" and not actively consider any offer for the target for three months.  In both of the last two scenarios, unless the target consents or a third party makes a firm intention offer announcement, the bidder will be prohibited for a period of six months from: announcing an offer; making any statement raising the possibility of making an offer; or taking any steps in connection with a possible offer which could result in a leak.

Guidance/Practical Tips

• The burden of proof in demonstrating that the rumour/speculation or untoward share price movement is not as a result of the bidder’s actions, rests with the bidder. Bidders need to be able to point to a clear and unequivocal public statement which provides a credible alternative explanation for the rumour or share price movement.
• Practical steps that a bidder should take to help discharge this burden include demonstrating that a robust secrecy protocol is in place and has been adhered to covering, for example, requiring third parties to enter into confidentiality agreements,  use of code names, documentary privacy settings, and running small deal teams.
• Prior to an approach, the bidder and/or its advisers should have systems in place to monitor press and share price of the target in order to determine whether or not a mandatory requirement to consult the Panel has been triggered.
• The Panel interprets the term "approach" broadly and will determine each case on its own facts.  There is no requirement for an "approach" to be made in writing or for any indicative offer price or terms or conditions to be specified to constitute an approach.
• The Code does not define when a bidder will be treated as "actively considering" an offer for the target.  This will be determined on its facts; the Panel has identified certain factors as indicative of active consideration, including whether the offer has been considered by the board, investment committee or senior management of the bidder; whether work has been undertaken by external advisers; and whether any external parties (such as financiers) have been approached about the offer.
• The Panel has provided specific written guidance for bidders, targets and their advisers navigating the announcement regime as set out in one of its Practice Statements.[1]

3.   Due Diligence – How much information about the target can we get/expect?

Key Points

• International bidders are often stumped by the stance taken by UK public companies when requests for due diligence information are made.  Market practice in the UK (at least in the early stages of bid discussions) is to limit the amount of non-public information due diligence information provided to bidders. 
• There is no legal or regulatory prohibition on what information can be provided to the bidder. Equally, there is no requirement to provide a minimum amount of information – disclosure obligations on UK listed companies means that in practice a considerable amount of information is publicly available. Nonetheless, this may not suffice, particularly for PE buyers and bidder financing banks.
• The Code requires information given to one bidder (or potential bidder) to be given equally and promptly, upon request, to bona fide potential bidder(s) even if the other bidder(s) is less welcome. 
• The above "equality of information" rule results in the reluctance of targets to provide information even to a welcome bidder, which can be lawfully demanded by any less welcome or hostile "bona fide potential offeror". The Panel has made it clear that the threshold to pass to qualify as a bona fide possible bidder is set very low.

Guidance/Practical Tips

• In a friendly bid situation, particularly in the latter stages (when the risk of an interloper or competing bidder diminishes), bidders should be robust in their requests for further specific due diligence information about the target.
• In order to facilitate access to commercially sensitive information of the target which may be needed for example by a bidder to consider the need for and, where necessary, obtain the consent of a competition authority or other regulatory body, flexibility may be possible.  The Panel may consent to a "locked box" mechanism through which the target can pass on information to lawyers or economists in order to undertake this type of regulatory analysis, for example, on the basis that that information is not then passed on to the bidder.  It may also be possible to use this mechanism to access other sensitive information such as material, proprietary intellectual property or technology.
• Bidders can utilise the "equality of information" rule to its favour to request access to all information provided to other bidders. In this regard, note that "information" is broad enough to include site meetings and meetings with management and requests of the target should be both specific yet sufficiently broad in scope to capture information provided (both initially and iteratively) to any competing bidders.

4.   Deal Protection – What deal protections can we secure from the Target and its Directors?

Key Points

• The Code contains a broad prohibition on the target entering into any "offer-related arrangements". 
• Contractual protections which a bidder may typically secure on deals in other jurisdictions, such as inducement or break fees, work fees and the "shopping-list" of other protections typically found in merger agreements entered into by US companies (such as matching rights, no-shops, no solicitation of competing bidders, exclusivity, warranties/representations about the target) are therefore generally prohibited in UK bids. 
• The prohibition extends to contractual arrangements with directors of the target and accordingly commitments to make recommendations or change recommendations, convene board meetings, provide notice of competing bidders, assist with preparation of any of the bid documentation or agree to restrictions on the conduct of the target business pending completion of the bid are also prohibited. 

Guidance/Practical Tips

• The prohibition does not preclude a bidder seeking certain limited contractual comforts from the target to secure: confidentiality; undertakings not to solicit employees or customers; or information and assistance to secure regulatory approvals.  Bidders are also permitted to enter into arrangements with the pension trustees of the target regarding future funding of the target pension and with the target itself as to how existing awards under a target’s employee incentive arrangements will be treated in connection with the offer. 
• Directors of the target are allowed to enter into plain vanilla irrevocable commitments or letters of intent with respect to their shareholdings (i.e. to commit to accept the offer or vote in favour of a scheme of arrangement).
• Companies are allowed to enter into de minimis inducement or break fees with a "white knight" bidder or in favour of a first bidder on an auction or formal sale process. 
• Bidders should actively consider seeking other forms of deal protection from non-director shareholders of the target.  Since the prohibition on offer-related arrangements was introduced in 2011, bidders have in some cases  managed to secure protections (e.g. inducement fees and other contractual support) from significant shareholders in the target.
• The Panel has recently clarified[2] that whilst the Code prevents the target from entering into "Bid Conduct Agreements" relating to the conduct, implementation and/or terms of the offer in the form of contractual commitments, the rule does not prohibit the target company from actually providing assistance to the bidder in relation to the implementation of an offer.
• Bidders had routinely (until the prohibition in 2011) sought and secured comprehensive contractual comfort from the target where they were seeking to implement their bid by way of a scheme of arrangement; the driver being re-balance of control in a largely target-controlled acquisition structure. The Panel has sought to provide some comfort to bidders by strengthening the Code rules to require the target to implement the scheme in accordance with the expected published timetable, save where the target has changed its recommendation and in a handful of other specific cases.

5.   Approaching Financiers and other Stakeholders – Who can we speak to before announcing our bid?

Key Points

• The Code restricts bidders from extending negotiations or discussions about a possible offer prior to any announcement, to include no more than a "very restricted number of people" (outside those who need to know and the parties concerned and their needed advisers)".  
• In practice, this rule is applied to limit the number of live discussions or negotiations with third parties to six (groups of) persons; the rule is therefore sometimes referred to as the ‘Rule of 6’.
• If a party wishes to extend discussions beyond this number, it will be required to issue an announcement about its intentions regarding a possible offer or make a firm intention offer announcement.  This restriction can give rise to major obstacles in bid preparation and/or managing deal risk as pre-announcement discussions with the following groups of persons fall within the rule – potential consortium members, lending banks, non-director shareholders (to gauge and if possible seek contractual support for an offer), anti-trust regulators, employees or management of the target or pension trustees of the target pension scheme

Guidance/Practical Tips

• The rule bites on "live" or active discussions and is aimed at minimising the risk of leaks and resulting market distortion.  Accordingly, if the Panel can be satisfied that secrecy has and will continue to be maintained, it may grant a dispensation and permit discussions beyond the initial group of six persons.
• In particular, where discussions or negotiations about the possible offer have come to an end or terminated (e.g. with a possible bid financing bank that is not chosen or able to provide the relevant finance), that party will no longer count towards the Rule of 6 and the bidder may be permitted to approach another person(s) up to the maximum of six.
• The bidder and its advisers should take particular care to ensure that robust secrecy protocols are in place and maintained. Pre-planning of pre-announcement approaches involving the identification and prioritisation of key stakeholders is essential to ensure an effective pre-approach campaign and no "wasted" discussions which count to the Rule of 6.
• Early and pre-emptive consultation with the Panel to agree the framework for application of the Rule of 6 and the criteria for dispensations (if needed) in the specific offer situation is advisable.

6.   Stakebuilding – What limits on stakebuilding apply pre and post announcement?

Key Points

• Some bidders may contemplate acquiring a stake in the target company in order to manage deal risk. 
• Aside from the legal and regulatory issues which arise, careful commercial consideration should be given to stakebuilding.  It can be challenging to acquire a meaningful stake in a target without increasing a chance of a leak (pre-announcement), triggering a disclosure requirement and/or hitting a price ceiling before a meaningful stake is achieved.  Stakebuilding is often regarded as aggressive action by targets which will need to be factored into the commercial assessment of its efficacy on any bid. 
• In common with most other regulatory regimes, a bidder will need to consider if it is in possession of inside information (other than its own intention to bid) and if so, whether dealings by it or its concert parties would breach any applicable criminal and/or civil rules pertaining to insider dealing or market abuse.
• Bidders will also need to take care where the proposed transaction is one to which EU merger regulations apply to ensure that no such market purchases will be treated as giving the bidder "control" for these purposes and therefore requiring clearance. 
• Acquisitions over a certain stake and size may also trigger a Hart-Scott-Rodino wait period under US regulations which can impact the ability and speed of the bidder to acquire a meaningful stake in the target. 
• Under the Code, a bidder needs to ensure that its acquisition of securities in the Target will not (when taken together with any other voting rights held by it or any of its concert parties) exceed 30% of the voting rights in the target and trigger a "mandatory" bid for the entire share capital of the target.

Guidance/Practical Tips

• Stakebuilding exercises are often most effective when launched with speed immediately following the first announcement of the offer. Plan well ahead (including identifying relevant regulatory issues, having financing ready and engaging third party bank to undertake the dealing) in order to be ready to launch at this time.
• If a bidder is launching a contractual takeover offer, it needs to bear in mind that shares acquired in advance of the offer being made will not count towards the "squeeze-out" level at which it can compulsorily buy out any minorities to achieve 100% control.
• If the bidder is undertaking a proposed offer by way of a court-approved scheme of arrangement, shares held by the bidder in the target (whether acquired in advance or during the offer) will be treated as a separate class of shares and will not count towards reaching the requisite threshold levels for shareholder approval.
• Share buying during an offer period when in contemplation of an offer or during an offer period sets a floor on the offer price level and at certain levels can trip the bidder into making a mandatory cash offer or cash alternative offer to all target shareholders.

7.   Conditionality – Can we walk away once the bid has been announced?

Key Points

• One of the cornerstones of takeover regulation in the UK is certainty and the Panel is the gatekeeper of market stability during a takeover. These objectives lay the foundation upon which other rules, for example, the need for a bidder to have all the cash needed to satisfy its offer at the time of a firm intention offer announcement is made, and the prescriptive rules regarding the conditions that a bidder can include in its offer and importantly, the ability to invoke any such permitted conditions to withdraw a bid. Generally, a bidder can only lapse a bid if the circumstances which give rise to the right to invoke the condition or pre-condition are "of material significance to the offeror in the context of the offer".
• Bidders therefore need to be aware that once they make a firm intention offer announcement and indeed once it is made, it will be very difficult for a bidder to lapse its bid.  Specifically bidders should note the following:
• Pre-conditions in a possible offer announcement: These preconditions (such as satisfactory due diligence or obtaining regulatory consents) are not uncommon and satisfaction (or waiver) will determine if and when a bidder will be required to make a firm intention offer announcement. These are generally permitted in the context of a possible offer announcement though prior consultation with the Panel is required.
• Pre-conditions in firm intention offer announcements: Panel consent is also required for the inclusion of any pre-conditions in a firm intention offer and typically permission is rarely granted unless they relate to regulatory conditions regarding possible UK Competition Commission or European Commission referral or (in limited cases) to some other material official authorisation. The Panel will also seek to ensure that any such pre-conditions are objectively framed.
• Financing pre-conditions or conditions: There is a general prohibition on financing conditions or pre-conditions in a firm intention offer announcement.  In exceptional cases, the Panel may be prepared to allow a financing pre-condition if there is a lengthy period to secure regulatory clearance and it is not reasonable for a bidder to maintain committed financing during this period.
• Other general conditions on UK bids: These are largely standardised and include a fairly typical shopping list of generic conditions which are triggered at a high materiality threshold.  Note however that to date, although there have been a number of attempts[3], no bidder has succeeded in invoking a general condition to lapse or withdraw from a bid.
• Anti-trust/competition conditions: UK and EU anti-trust/competition conditions are treated differently by the Panel.  The materiality and objectivity tests referred to above do not apply in the same manner and thus, generally, it will be possible for a bidder to lapse its bid if the offer is referred to the UK Competition Commission or there is a European Commission referral.

Guidance/Practical Tips

• Bespoke conditions: A bidder may be able to improve its ability to invoke a general condition if the condition is a negotiated, bespoke and/or tailored condition specific to the target and/or its business. In a friendly situation, when conducting due diligence on the target, a bidder should give consideration to the relevance and need for any specific or bespoke conditions and should elevate this quickly to the target for discussion/negotiation.
• Acceptance condition: In the case of a contractual offer, a bidder should seek to include a high acceptance condition level (with an ability to waive the level down its sole discretion).  A 90% acceptance condition is not unusual and is justifiable by reference to the level at which the squeeze out of any non-accepting shareholders can be undertaken. Thus, if the bidder does not attain 90% acceptances, it can withdraw or lapse its offer.[4]
• Bidder/shareholder approval: To the extent that the bidder itself requires shareholder approval in order to acquire the target, it should include this as a specific and clear condition to its offer.[5] 

8.   Communications – What do we need to be aware of when communicating to shareholders, employees, the market?

Key Points

• Consistent with its approach to upholding an orderly market and the importance placed on the quality (and timeliness) of information provided to shareholders and the market, the Panel is zealous in its regulation of statements made by parties to a bid during the course of an offer. 
• The general rule is that a party will be held to any public statement (made by or on its behalf) about the bid.  If the bidder is not able to stand behind its statement, if permitted by the Panel, it will be required to immediately withdraw or clarify the statement that it has made in public. 
• All parties to an offer need to ensure that statements made during the offer period are not false or misleading and will create any uncertainty in the market. 
• The Panel implements a broad interpretation to "statements" which can cover oral and written communications across a range of media including social media, statements made in hearings or before tribunals.  
• Bidders need to take particular care of the following:

o    Price: Statements or communications regarding the offer price are considered particularly sacrosanct. In particular care is required with statements which suggest that a bidder may or may not improve its offer.  For example, statements which suggest that the bidder has fixed the mix or split of its offer consideration or set a ceiling on its offer price will generally not be capable of retraction and will bind a bidder.  Bidders who wish to reserve the right to reduce their offer price if the target declares a dividend subsequent to a bidder offer announcement must specifically reserve this flexibility at the outset and will not be permitted from amending its headline offer price to take account of any newly declared target dividend.

o    Advertisements: Advertisements about an offer are generally prohibited unless they fall within a specific list of exceptions (which includes product information and corporate image advertisements not bearing on any offer or potential offer). Panel clearance is required for any advertisement which is not within its "white list".

o    Telephone campaigns: There are strict rules regarding information which can be passed on to shareholders during any telephone campaign.  In addition, financial advisers "fully conversant with . . . the requirements of . . . the Code" must oversee a target shareholder telephone campaign and the Panel will require satisfactory evidence of the same.

o    Interviews and debates: The Code specifically discourages parties from being involved in any form of confrontation between bidder and target on television or similar media. 

o    Statements of support: A number of bidders have inadvertently contravened the Code rules regarding making public statements about the level of support that their bid has secured.  Generally, parties should avoid making any statement about the existence or level of shareholder support unless these statements can be specifically verified and the relevant ‘supporting’ party has clearly conveyed its intention regarding support to the bidder.  Statements of support which are not capable of satisfying these criteria will be required to be withdrawn and immediately clarified.

o    Profit forecasts, asset valuations, quantified financial benefit statements: Statements which constitute profit forecasts,[6] statements as to the value of key assets or quantified financial benefit statements should not be made without due care and consideration.  If they are made, they may in certain circumstances need to be formally reported on – for example in the case of profit forecasts, by that party’s reporting accountant and financial adviser(s).  This can give rise to both practical and substantive hurdles which has resulted, in some cases, to parties being forced to withdraw such statements and being subject to disciplinary action.

Guidance/Practical Tips

• As communications are an area keenly regulated by the Panel, the best advice is generally to adhere closely ‘to the script’, that is, to statements which have been properly verified and are already reflected in formal bidder documentation or communications.
• Intentions of a bidder about the future business the target, its employees and management, strategic post deal plans for integration and cost rationalisation, should be formed and formalised with utmost care, particularly in the absence of adequate access to detailed information from the target about such matters.  Bidders should be aware that any such intentions will need to be publicly disclosed and they will generally be held to these statements for a period of 12 months from the date on which the offer period ends.
• Unless it is absolutely necessary, bidders should avoid making any statements which would constitute a post-offer "undertaking".  The Panel recently introduced a new regime to draw a distinction between post offer statements of intention and post-offer undertakings.  Whist both types of statement should only ever be made after careful consideration and only in circumstances where the bidder reasonably believes it can fulfil them, bidders have greater flexibility with intention statements (e.g. with respect to caveats and qualifications) in contrast to undertakings which, if made, carry much greater weight and burden on the bidder to discharge.  Compliance with post-offer undertaking for example, may be subject to formal monitoring procedures by the Panel and the ability to include qualifications or caveats is substantially restricted beyond specific, objectively framed and clear conditions.

9.   Frustration & Litigation – How easy is it for target companies and/or their shareholders to derail a bid process?

Key Points

• In furtherance of certainty, one of the other key attractions of the UK takeover regime for bidders and targets alike is the non-existence of shareholder or other tactical litigation in the course of an offer.
• The Code was placed on statutory footing in 2005 pursuant to implementing legislation which effectively excludes all rights of action for breaches of statutory duty. 
• Accordingly, the risk of a bid being derailed due to defensive actions taken by a target company is virtually eliminated on a UK takeover.  The Code prohibits any action by the target company which has or may have, as its effect the frustration of a bid by a bidder unless Panel and shareholder consent has been obtained. This broad rule means that the target will not, on the one hand be permitted to issue a single share during an offer period (without the requisite consents), alter its share capital structure or introduce any other form of ‘poison pill’ during the course of an offer or event before that date, if the target board reasonably believed an offer was imminent.

Guidance/Practical Tips

• Take advantage of the system – the level playing field is one which a well-advised bidder can effectively leverage.

10.   Timetable – How much time do we have?

Key Points

• If managing uncertainty is one of the key objectives of a bidder in managing deal risk on a public bid, the takeover regime in the UK is one of the most favourable. The Code takeover timetable is strict and relatively short.
• On a contractual takeover offer, some of the key dates are as follows: (1) from the date of issuing its announcement of a firm intention to make a bid, a bidder has 28 calendar days within which to post its offer document (Day 0); (2) the shortest time period within which the bidder can close its offer is 21 days from Day 0 (Day 21 or the First Closing Date); (3) the bidder must have satisfied its acceptance condition within 60 days from Day 0 (Day 60); (4) all other conditions to the offer must have been satisfied (or waived) within the later of 21 days of the First Closing Date or Day 60; and (5) the offer consideration must be settled within 14 days of the later of the First Closing Date and the offer becoming being declared wholly unconditional.
• Whilst there is scope for some deviation from this strict contractual offer timetable with Panel consent, it is exceptional and is generally limited to relatively short extensions of "Day 81" where a modest extension may be required to fulfil a material official authorization or regulatory consent. The other situation where the offer timetable is altered is in the event of a competing bid, in which case the timetable will typically "switch" to the timetable of the subsequent competing bidder(s).

Guidance/Practical Tips

• If there is an expectation that material regulatory consents will not be forthcoming during the Code timetable, bidders should consider making a pre-conditional possible offer or if possible (with Panel consent) making a pre-conditional firm intention offer announcement. 
• There is more flexibility with timing in the context of takeovers by way of scheme of arrangement – the Panel will adapt the Code timetable to meet the timetable set by the court. Schemes of arrangement are the preferred route for bidders on larger (higher value) complex bids.

   [1]   Practice Statement 20: "Rule 2 – Secrecy, possible offer announcements and pre-announcement responsibilities" (http://www.thetakeoverpanel.org.uk/wp-content/uploads/2008/11/PS-20-New.pdf)

   [2]   Practice Statement 29 – "Rule 21.2 – Offer-related arrangements" (http://www.thetakeoverpanel.org.uk/wp-content/uploads/2008/11/PS-29-New.pdf)

   [3]   See for example the case of  WPP v Tempus (2001) where WPP sought to lapse its bid due to material market changes in the wake of ‘9/11’ (http://www.thetakeoverpanel.org.uk/wp-content/uploads/2008/12/2001-14.pdf)

   [4]   In Trafalgar House’s hostile bid for Northern Electric (1996), Trafalgar House secured 76.5% acceptances but withdrew its bid in reliance on an unsatisfied acceptance condition following a substantial fall in the market value of the regional electricity company.

   [5]   In AbbVie v Shire (2014), AbbVie required shareholder approval to consummate the offer.  For commercial reasons (in particular the impact of tax law change in the US), it wanted to walk away from its offer. It was able to achieve this by changing the recommendation to its own shareholders to vote in favour of the offer and failed to satisfy its shareholder approval condition.

   [6]   These are defined broadly under the Code and capture any statement which expressly or by implication (with or without reference to figures) indicate a minimum or maximum figure for the forecast of profits or losses, or, contains data from which calculation of such figure(s) may be made.  

Should you have any questions relating to takeovers of UK companies, please feel free to contact the author of this article, Selina Sagayam, the Gibson Dunn lawyer with whom you normally work, or one of the lawyers listed below.  We would be pleased to assist you.

Charlie Geffen (Chair, London Corporate)
DD: +44 (0) 20 7071 4225
Email: [email protected]

Nigel Stacey (Partner, Corporate)
DD: +44 (0) 20 7071 4201
Email: [email protected]

Jonathan Earle (Partner, Corporate)
DD: +44 (0) 20 7071 4211
Email: [email protected]

Selina Sagayam (Head of Practice Development, Transactional)
DD:+44 (0) 20 7071 4263
Email: [email protected] 

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