Overview

The Takeover Panel has finally produced draft proposals to implement the Code Committee’s recommendations from October 2010, which largely reflect and expand on the previous conclusions (despite some last minute lobbying from the private equity industry in particular).

Many of the amendments are driven by a desire to shift the balance of power and to give targets more control over unwanted approaches.

• Offerors to be held to account for statements of intention: statements as to future intentions regarding the offeree company and as to the effect on their existing businesses are expected to hold good for at least 12 months (or longer).

• An end to break fees and exclusivity: despite concerns about the death of public-to-private transactions, the proposals outlaw exclusivity, implementation and break fee arrangements in most cases.

• Visibility on adviser pricing: disclosure of fee levels will give companies and advisers increased visibility as to market rates.

• Increased employee involvement: a new concept, offeree companies must pay the costs of advisers to employee representatives.

Nabarro looks into the key changes.

To read more click ‘view briefing’.