Transcription of The Takeover Code
1 The Takeover code The Panel on takeovers and MergersAll rights reservedISBN 0 9500466 6 3 PFBPHT ypeset and printed by Bowne International WITH THE PANELP ostal communications should be addressed to the Secretary, Panel onTakeovers and mergers , 10 Paternoster Square, London EC4M 7DY. Byhand items should also be delivered there. The telephone number is020 7382 9026; facsimile 020 7236 telephone number of the Panel s Market Surveillance Unit is020 7638 0129; facsimile 020 7236 THIS VOLUME UP-TO-DATEF uture amendments or additions will be made by the issue of replacement ornew and when amendments or additions are published they will beaccompanied by an updated checklist of page references (see inside backcover).
2 In this way it will be possible to be sure that the volume is copies may be obtained from the Secretary, Panel on takeovers andMergers, at a price of 50 each. There is an annual charge of 25 for theamendments DATESF irst edition in loose-leaf format19 April 1985 Second edition26 January 1988 Third edition25 October 1990 Fourth edition8 July 1993 Fifth edition16 December 1996 Sixth edition12 July 2000 Seventh edition1 May 2002 Eighth edition20 May 2006(From time to time amendments are issued.) SummaryTHE city code ON takeovers AND mergers (THE code )SECTIONINTRODUCTIONAGENERAL PRINCIPLESBDEFINITIONSCTHE APPROACH, ANNOUNCEMENTS ANDINDEPENDENT ADVICEDRESTRICTIONS ON DEALINGSETHE MANDATORY OFFER AND ITS TERMSFTHE VOLUNTARY OFFER AND ITS TERMSGPROVISIONS APPLICABLE TO ALL OFFERSHCONDUCT DURING THE OFFERIDOCUMENTS FROM THE OFFEROR AND THE OFFEREEBOARDJPROFIT FORECASTSKASSET VALUATIONSLTIMING AND REVISIONMRESTRICTIONS FOLLOWING OFFERS AND POSSIBLEOFFERSNPARTIAL OFFERSOREDEMPTION OR PURCHASE BY A COMPANY OF ITSOWN SECURITIESPDEALINGS BY CONNECTED EXEMPT PRINCIPALTRADERSQWHITEWASH GUIDANCE NOTEAPPENDIX 1 FORMULA OFFERS GUIDANCE NOTEAPPENDIX 2 DIRECTORS RESPONSIBILITIES AND CONFLICTS OFINTEREST GUIDANCE NOTEAPPENDIX 3 RECEIVING AGENTS code OF PRACTICEAPPENDIX 4 TENDER OFFERSAPPENDIX 5 BID DOCUMENTATION RULES FOR THE PURPOSES
3 OFREGULATION 10 OF THE takeovers DIRECTIVE(INTERIM IMPLEMENTATION) REGULATIONS 2006 APPENDIX 6 DOCUMENT city code ON takeovers ANDMERGERSC ontentspageINTRODUCTION1 OVERVIEWA12 THE CODEA13 COMPANIES, TRANSACTIONS AND PERSONS SUBJECT TOTHE CODEA24 THE PANEL AND ITS COMMITTEESA75 THE EXECUTIVEA106 INTERPRETING THE CODEA107 HEARINGS COMMITTEEA128 Takeover APPEAL BOARDA159 PROVIDING INFORMATION AND ASSISTANCE TO THE PANELAND THE PANEL S POWERS TO REQUIRE DOCUMENTS ANDINFORMATIONA1710 ENFORCING THE CODEA1811 DISCIPLINARY POWERSA1912CO-OPERATION AND INFORMATION SHARINGA2113 FEES AND CHARGESA22 GENERAL CONTINUEDRULESSECTION D. THE APPROACH, ANNOUNCEMENTS ANDINDEPENDENT ADVICERULE APPROACHD1 RULE BEFORE ANNOUNCEMENTS; THE TIMINGAND CONTENTS OF on Rule Warning clientsD22.
4 Proof an announcement is requiredD2 Notes on Rule Panel to be consultedD32. Clear of offerors and the offeree announcement of a possible offerD4 Notes on Rule Pre-conditionsD52. Announcement of a potential competing offerD63. Period for clarificationD64. Extension of time limitD65. Reservation of right to set statements asideD66. Duration of restrictionD67. Statements by the offeree announcement of a firm intention to make an offerD7 Notes on Rule Unambiguous languageD82. Interests of a group of which an adviser is amemberD83. Subjective conditionsD94. New conditions for increased or improved offersD95. Pre-conditionsD96. Financing conditions and on the offeror and the offeree company tocirculate announcementsD9 Notes on Rule Full text of announcement under Rule to bemade availableD102.
5 Shareholders, employee representatives andemployees outside the of a firm announcement D10 Note on Rule there is no need to of intention not to make an offerD10 Notes on Rule Prior consultationD112. Rule (b)D113. Concert partiesD114. Media of an announcement about an offer or possibleofferD12 Notes on Rule Distribution and availability of announcementsD122. Rules 6, 7, 9, 11, 17, 30, 31, 32, Appendix andAppendix of numbers of relevant securities in issueD13 Notes on Rule Options to subscribeD132. Treasury sharesD13 RULE of the offeree companyD14 Notes on Rule Management buy-outs and offers by controllersD142. When there is uncertainty about financialinformationD143.
6 When no recommendation is given or there is adivergence of of an offeror companyD14 Notes on Rule GeneralD152. Reverse takeoversD153. Conflicts of advisersD15 Notes on Rule Independence of adviserD152. Investment trustsD153. Success CONTINUEDSECTION E. RESTRICTIONS ON DEALINGSRULE dealings by persons other than the on dealings by the offeror and concert partiesE1 Notes on Rules and Other circumstances in which dealings may not takeplaceE22. Consortium offers and joint offerorsE23. No-profit arrangementsE24. When an offer will not proceedE35. No dealing contrary to published adviceE36. Discretionary fund managers and principal of irrevocable commitmentsE3 Note on Rule in offeree securities by certain offeree companyassociatesE3 Note on Rule commitments and letters of on the offeree company accepting an offer inrespect of treasury on securities borrowing and lendingtransactions by offerors, the offeree company and certainother partiesE4 Notes on Rule Return of borrowed relevant securitiesE52.
7 Pension fundsE53. Disclosure or notice where consent is givenE54. Discretionary fund managers and principal tradersE5 RULE RESTRICTIONS ON on Rule When more than 50% is heldE62. New shares, subscription rights, convertibles andoptionsE63. Allotted but unissued sharesE64. Whitewashes E75. Maintenance of the percentage of the shares inwhich a person is interestedE76. Discretionary fund managers and principal tradersE77. to restrictionsE7 Notes on Rule Single shareholderE82. Rule 9E93. RevisionE94. After an offer from a single shareholder consequencesE9 Notes on Rule If a person s interests are reducedE92. Rights or scrip issues and whitewashes from a single shareholder disclosureE9 Note on Rule of the identity of the person dealingE10 RULE RESULTING IN AN OBLIGATION TOOFFER A MINIMUM LEVEL OF before a Rule after a Rule announcementE11 Notes on Rule 61.
8 Adjusted termsE122. Acquisitions prior to the three month periodE123. No less favourable termsE124. Highest price paidE135. Cum dividendE146. Convertible securities, warrants and optionsE147. Unlisted securitiesE148. Discretionary fund managers and principal tradersE149. Offer periodE1410. Competition reference periodE14 RULE OF CERTAIN announcement required if the offer has to beamendedE15 Note on Rule by connected discretionary fund managers andprincipal tradersE15 Notes on Rule Dealings prior to a concert party relationship arisingE162. QualificationsE173. Dealings by principal tradersE174. Dealings by discretionary fund managersE185. Rule CONTINUED6. Disclosure of dealings in offer documentationE187.
9 Consortium offers and whitewashes E19 RULE OF DEALINGS DURING THE OFFERPERIOD; ALSO INDEMNITY AND by parties and by associates for themselves orfor discretionary by parties and by associates for non-discretionary by persons with interests in securitiesrepresenting 1% or commitments and letters of intentE21 Notes on Rule 81. Consultation with the PanelE212. Dealings in relevant securities of the offerorE223. Timing of disclosureE224. Method of disclosure (public or private)E225. Details to be included in disclosures (public orprivate)E226. Indemnity and other arrangementsE257. Time for calculating a person s interestsE268. Discretionary fund managersE269. Recognised intermediariesE2710.
10 Responsibilities of intermediariesE2711. Unquoted public companies and relevant privatecompaniesE2712. Potential offerorsE2813. Companies Act 1985E2814. Irrevocable commitments and letters of intentE28 SECTION F. THE MANDATORY OFFER AND ITS TERMSRULE a mandatory offer is required and who is primarilyresponsible for making itF1 Notes on Rule acting in concert1. Coming together to act in concertF22. Collective shareholder actionF23. Directors of a CONTINUED4. Acquisition of interests in shares by members of agroup acting in concertF55. Employee Benefit TrustsF6 Other general interpretations6. Vendor of part only of an interest in sharesF77. Placings and other arrangementsF78. The chain principleF89.
