Acting in concert

Also known as concert party arrangements. A group acting together in a takeover situation. As defined in the City Code on Takeovers and Mergers ( www.practicallaw.com/A34660) (the Code), persons acting in concert are persons who, pursuant to an agreement or understanding (whether formal or informal), co-operate to obtain or consolidate control of a company or to frustrate the successful outcome of an offer for a company. A person and each of its affiliated persons will be deemed to be acting in concert with each other. Control in this context means 30% of the voting rights in the target company. The Code presumes that certain categories of person will be acting in concert unless the contrary is shown. Under the Disclosure Guidance and Transparency Rules (DTR) ( www.practicallaw.com/8-209-4955) a person will also be an indirect holder of shares held by a third party where they agree that they should adopt, by concerted exercise of the voting rights they hold, a lasting common policy towards the management of the company in question. (DTR 5.2.1R(a)).

For further information, see Practice notes, Stakebuilding ( www.practicallaw.com/0-107-3608) and Takeover Code know-how: Rule 9: Notes on Rule 9.1: Persons acting in concert ( www.practicallaw.com/5-500-6792) .

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