Public Mergers and Acquisitions

The Code Committee of the Takeover Panel has published its response statement 2012/3 setting out amendments to the Takeover Code following its consultation on companies subject to the Code.

The Code Committee of the Takeover Panel has published its response statement setting out amendments to the Takeover Code following its consultation on extending certain rights of employee representatives to the trustees of offeree company pension schemes.

We have added terms for F and G in our A to Z of key terms used in takeovers and the Takeover Code.

A round up of UK takeover deals added to What's Market for 2012.

In Re ITAU BBA International Ltd [2012] EWHC 1783 (Ch), the High Court held that the definition of existing transferee company in the Companies (Cross-Border Mergers) Regulations 2007 had to be read as "a transferee company other than one formed for the purposes of, or in connection with, a cross-border merger by formation of a new company".

The Takeover Panel has published statement 2012/4 giving details of the auction procedure established in relation to competing offers for Cove Energy plc.

The Code Committee of the Takeover Panel has published PCP 2012/2: Pension scheme trustee issues.

A round up of UK takeover deals added to What's Market for the first six months of 2012.

HMRC has revised its Capital Gains Manual guidance on the treatment of depositary receipts following the First-tier Tribunal's decision in HSBC Holdings PLC and The Bank of New York Mellon Corporation v HMRC [2012] UKFTT 163 (TC).

A round-up of some recent developments in public M&A deals summarised in What's Market.

BIS has announced reforms to the UK competition regime, including changes to the current merger regime. 

An ask the team about the disguised remuneration rules.

The Takeover Panel Executive has published amended versions of a number of its Practice Statements, which have been updated principally to reflect the Takeover Code changes that came into effect on 19 September 2011.

On 25 July 2011, the Competition Commission announced that it has formally cancelled its inquiry into the proposed acquisition by News Corporation (News Corp) of the 60.9% shares in British Sky Broadcasting plc (BSkyB) that it does not already own.

The Code Committee of the Takeover Panel has published its response statement setting out the amendments to the Takeover Code following its review of certain aspects of the regulation of takeover bids.

The Companies (Reporting Requirements in Mergers and Divisions) Regulations 2011 have been made and laid before Parliament.

PLC Cross-border has updated the Mergers and Acquisitions multi-jurisdictional guide, which answers key questions on public mergers and acquisitions law from the perspective of practitioners in 33 jurisdictions.

PLC Corporate has published further notes in our series of notes, to provide fast access to know-how on Rules 8 and 38 of the Takeover Code, the Introduction to the Code and Appendices 1, 5 and 7 to the Code.

The City of London Law Society has published a note on the admission condition wording to be used in takeover documents. The note also addresses a possible, associated amendment to Rule 24.9 of the Takeover Code.

Our summary of the key business tax announcements in the 23 March 2011 Budget. 70 leading tax practitioners told us what they thought of the Budget. We have published an article incorporating their views: 2011 Budget: Keep calm and carry on.

The government has announced that it has decided to materially simplify narrative reporting for quoted companies, and will consult further with business in the summer. It also announced that it would publish the next steps of its wider review of corporate governance and economic short-termism in the summer.

The Code Committee of the Takeover Panel has published PCP 2011/1 seeking views on its proposed amendments to implement its review of certain aspects of the regulation of takeover bids.

BIS has published the draft Companies (Reporting Requirements in Mergers and Divisions) Regulations 2011 and has invited comments by 13 March 2011.

A round up of the UK takeover deals added to What's Market  for 2010. (free access.)

On 19 November 2010, HMRC announced that the High Court granted a group litigation order, on 21 October 2010, concerning stamp duty and SDRT on the transfer and issue of securities into clearing and depositary services.

BIS has published a call for evidence, "A Long-Term Focus for Corporate Britain", seeking views on corporate governance and capital markets.

The UKLA has published a number of technical notes to bring together currently applicable articles that previously appeared in List! issues 1 to 25.

International approaches to employee information and consultation rights on takeover offers, drawn from the PLC Cross-border Mergers and Acquisitions Handbook 2010/11, which answers key questions on public mergers and acquisitions law from the perspective of practitioners in 31 jurisdictions.

PLC Tax has published a checklist on international share sales.

A legal update about the First-tier Tribunal's decision in Williamson Tea Holdings Ltd v HMRC [2010] UKFTT 301 (TC). (Free access.) 

The government has published a Command Paper in response to the report by the BIS Committee on issues relating to mergers, acquisitions and takeovers in relation to the takeover of Cadbury by Kraft.

The Takeover Panel has published its annual report and accounts for the financial year ending 31 March 2010.

An update on international approaches to hostile bids and bid defences, drawn from the PLC Cross-border Mergers and Acquisitions Handbook 2010/11, which answers key questions on public mergers and acquisitions law from the perspective of practitioners in 30 jurisdictions.

The Takeover Appeal Board has affirmed the Hearing Committee's decision to impose a three year cold-shouldering sanction on Brian Myerson, Brian Padgett and Daniel Posen.

An update on international approaches to stakebuilding, drawn from the PLC Cross-border Mergers and Acquisitions Handbook 2010/11, which answers key questions on public mergers and acquisitions law from the perspective of practitioners in 30 jurisdictions.

PLC Corporate has published further notes in our series of notes to provide fast access to know-how on Rules 21 to 26 of the Takeover Code. We plan to publish notes on the other Code Rules in due course.

An update on the publication of the PLC Cross-border Mergers and Acquisitions Handbook 2010/11, which answers key questions on public mergers and acquisitions law from the perspective of practitioners in 30 key jurisdictions.

The Takeover Panel Executive has issued a statement of public criticism of Kraft Foods Inc. for failing to meet the standards required by Rule 19.1 of the Takeover Code during the course of its offer for Cadbury in respect of statements made about Cadbury's Somerdale facility.

Our summary of the key business tax announcements in the 24 March 2010 Budget. See what other tax practitioners thought were the highlights of the Budget: Article, March 2010: When is a Budget not a Budget? Tax practitioners comment.

The Code Committee of the Takeover Panel has published PCP 2010/1: consultation on profit forecasts, asset valuations and merger benefits statements.

On 24 February 2010, the Code Committee of the Takeover Panel issued statement 2010/6: Consultation on aspects of the Takeover Code.

On 16 December 2009, the Code Committee of the Takeover Panel published Response Statement RS 2009/1 on extending the Code's disclosure regime.

Round up of the public M&A deals added to What's Market for 2009.

Publication of Public Consultation Paper 2009/3 by the Code Committee of the Takeover Panel, proposing amendments to Rule 5.2(c)(iii) of the Takeover Code.

The Takeover Panel has announced amendments to the Takeover Code to reflect the commencement of the final provisions of the Companies Act 2006.

The Code Committee of the Takeover Panel is consulting on amendments to the Takeover Code.

The Takeover Panel has published its annual report and accounts for the financial year ending 31 March 2009.

The Panel Executive has published a practice statement on debt syndication during offer periods.

The Code Committee of the Takeover Panel is consulting on its proposals to extend the Takeover Code's disclosure regime.

The Code Committee has published a consultation paper seeking comments on its proposals to extend the Code's disclosure regime.

On 22 April 2009, the European Parliament adopted a legislative resolution on the proposal for a directive of the European Parliament and of the Council amending Council Directives 77/91/EEC, 78/855/EEC and 82/891/EEC and Directive 2005/56/EC as regards reporting and documentation requirements in the case of merger and divisions.

An update on Takeover Panel Statements 2009/4 and 2009/5 announcing the release of a new version of the Takeover Code and minor amendments to Practice Statements respectively, published 30 March 2009.

Panel Instrument 2009/1 and Panel Statement 2009/2 published on 27 February 2009.

The Code Committee of the Takeover Panel has issued a response to its consultation on proposed changes to the Takeover Code relating to electronic communications.

On 19 December 2008 the Code Committee of the Takeover Panel issued Response Statement 2008/2: Miscellaneous Code Amendments.

The Companies Act 2006 (Extension of Takeover Panel Provisions) (Isle of Man) Order 2008 (SI 2008/3122) was made on 10 December 2008, published on 16 December 2008 and takes effect from 1 March 2009.

Offer by Jarpeno Limited for Imperial Energy Corporation plc: The Takeover Panel Hearings Committee publishes holding announcement.

The Takeover Panel has published Statement 2008/44 on BHP Billiton PLC's offer for Rio Tinto PLC.

The Code Committee of the Takeover Panel is consulting on proposed changes to the Takeover Code to enable electronic forms of communication to be used to send documents and information to shareholders and certain other relevant persons.

The Takeover Panel Executive has published Practice Statement No. 24 on the interpretation and application of certain provisions of Rule 15 of the Takeover Code.

The Takeover Panel Executive has published Statement 2008/31, which includes Practice Statement No. 22 on its interpretation and application of certain provisions of the Takeover Code to irrevocable commitments to accept an offer which include an undertaking to vote the shares in a particular way.

On 18 July 2008 the Takeover Panel Code Committee issued consultation paper Miscellaneous Code Amendments (PCP 2008/2).The stated purposes of the amendments are:- To clarify the application of existing Code provisions.- To codify existing practice in relation to matters which are not currently covered by the Code.The Code Committee proposes substantial changes to the following Rules:Rule 2: Secrecy before announcementsThis addresses concerns as to the risk of leaks. See Legal update, Takeover Panel Executive Practice Statement No. 20: secrecy, possible offer announcements and pre-announcement responsibilities (Rule 2).Rule 9.7: Requirement to seek the consent of the Panel to board appointments of nomineesThe Executive's policy has been generally to give its consent to requests for appointments to the board prior to the posting of the mandatory offer document. As the Executive does not need the Rule to encourage compliance with Rule 9 obligations the Committee proposes deleting the clause.Rule 9: Voting restrictionsThe Committee has concluded that, in general, it is not necessary or appropriate to restrict Rule 9 offerors and persons with whom they are acting in concert from exercising, or procuring the exercise of, the votes attaching to all the shares in which they are interested.Rule 9.1: Note 11The Executive advised the Committee that it considers the final sentence of the final paragraph of Note 11 to be redundant. The Committee proposes to delete it.Minor chan

On 15 July 2008 the Code Committee of the Takeover Panel published:- Response Statement (RS) 2008/1 the response to Public Consultation Paper (PCP) 2008/1 on the Rules applying to competition reference periods.- Instrument 2008/2 setting out the text of the amendments to the Code included in RS 2008/1.- Instrument 2008/3 setting out other amendments to the Code.The amendments proposed in PCP 2008/1 will be incorporated into the Code: see Legal Update, Takeover Code consultation: Competition Reference Periods (PCP 2008/1). Minor amendments are also made to a number of Rule Notes to reflect these changes. For background information see Practice note, Failed Bid.The amendments to the Code set out in Instrument 2008/3:- Reword Note 3 of Rule 2.8 to improve clarity: Appendix A.- Add new Note 8 to Rule 2.4 to refer to the Rule 7.1 obligation, amend Rule 7.1 for clarity and cross reference Rules 6, 9 and 11 to it: Appendix B.- Amend references to "all persons under the same control" in Note 1(c) of Rule 7.2 and Note 16 of Rule 9.1 to refer to "any person and all persons controlling, controlled by or under the same control as that person": Appendix C.- Insert sub-headings to Note 5(a) of Rule 8 for added clarity: Appendix D.- Amend Rule 29.1 to reflect the repeal of provisions of the Companies Act 1985 and their replacement by regulations: Appendix E.The Committee undertook no formal consultation because it concluded that the amendments do not materially alter the effect o

On 10 July 2008, the Takeover Panel Executive published Practice Statement No. 24 setting out the Executive's interpretation and application of certain provisions of Rule 15 of the Takeover Code. Rule 15 requires that, when an offer is made for voting equity share capital or for other transferable securities carrying voting rights and the target has any outstanding securities which are convertible into, or which comprise options or other rights to subscribe for, securities to which the voting equity offer relates (Rule 15 securities), the bidder must make an appropriate offer or proposal to the holders of those Rule 15 securities.

On 24 June 2008 the Takeover Panel published statement 2008/26 giving details of an auction procedure established in relation to competing offers for Enodis PLC made by MTW County Limited and FNI Limited.

In the 2007 Budget, Gordon Brown, then Chancellor, announced that the 10% starting rate of income tax would be abolished for earnings and pensions income with effect from 6 April 2008 (see Legal update, Budget 2007: Income tax allowances, rates and bands). However, this proved very unpopular as the effect would be to make the poorest members of society worse off. There were calls for the government to take action to counteract this effect (see Legal update, 10% starting rate: backbenchers withdraw Finance Bill amendment after Chancellor promises help).In response to this, on 13 May 2008, the current Chancellor, Alistair Darling, announced the following amendments to the income tax regime:1. Increasing the personal allowance for 2008/09 by £600, to £6,035, with effect from September 2008 but backdated to 6 April 2008.2. Reducing the higher-rate income tax threshold by £600 (presumably, also backdated to 6 April 2008). HMRC explained on its website that the higher-rate threshold is the total of the personal allowance and the basic rate limit, meaning that the basic rate limit (the level of taxable earnings, after the personal allowance is applied, from which higher-rate tax applies) would be decreased by £1,200 in total, to £34,800. The idea is to ensure that higher-rate taxpayers, who would be largely unaffected by the abolition of the starting rate, do not benefit from increased personal allowances.Draft legislation effecting these changes is to be included in

The Finance Bill 2008 received its second reading in the House of Commons on 21 April 2008. For the Hansard transcript of the debate, see Second reading. As expected, much of the debate focused on the withdrawal of the 10% starting rate (clause 3 of the Finance Bill 2008). John McFall (Chairman of the Treasury Committee) offered to ask the Treasury Committee to explore measures with the government that would compensate for the withdrawal of the 10% starting rate with a view to reporting in June or July. While the Chief Secretary to the Treasury welcomed the offer, she indicated that it would be with a view to reporting back in advance of the Pre-Budget Report. Labour backbenchers have tabled an amendment seeking to defer the introduction of clause 3. The opposition are expected to table further amendments on Monday. A new early day motion was also lodged by the opposition. Clauses 3, 5, 6, 15, 21, 49, 90 and 117 and new Clauses amending section 74 of the Finance Act 2003 were committed to a Committee of the whole House (to be debated on 28 and 29 April 2008) with the remainder of the Bill committed to a Public Bill Committee (dates to be announced).For links to the debates and amendments tabled, see Finance Bill 2007-2008.

On 10 April 2008, the Takeover Panel published statement 2008/16 giving details of an auction procedure established in relation to competing offers for Imprint plc made by OPD Group plc, Hydrogen Group plc and Premier Group plc.

On 4 April 2008, the Takeover Panel published a statement confirming that the minor amendments to Rule 29 of the Takeover Code to reflect the latest edition of the Royal Institution of Chartered Surveyors Standards (which were implemented by Instrument 2008/1 on 4 March 2008, see PLC Legal update, Takeover Code: amendments to Rule 29 (Asset Valuations)) came into effect on 4 April 2008.

The Takeover Panel Executive has published a Practice Statement on certain provisions of Rule 2 of the Takeover Code.

The Code Committee of the Takeover Panel has published a consultation paper on competition reference periods under the Takeover Code.

We have learned from HM Treasury that, following the 2008 Budget (delivered on 12 March), the first version of the Finance Bill 2008 is expected to be published on Thursday 27 March 2008. This has been confirmed in a Statement by the Financial Secretary to the Treasury.We will publish a further update, including a link to the Bill, when it is published.

As previously reported, the Takeover Panel Executive has published a practice statement on how the Executive normally interprets, and applies, the provisions in the Takeover Code relating to: the need for absolute secrecy before an announcement; when a possible announcement is required (and the contents of such an announcement); and what steps the Executive expects parties to a possible offer, and their advisers, to take to ensure they comply with their responsibilities in relation to these provisions (Rules 2.1 to 2.4(a), Takeover Code) (see PLC Legal update, Takeover Panel Executive Practice Statement No. 20: secrecy, possible offer announcements and pre-announcement responsibilities (Rule 2)). For details of the Executive's Practice Statement No. 20, see PLC Practice note, Rule 2 of the Takeover Code: Panel practice.

On 7 March 2008, the Takeover Panel Executive published a practice statement on how the Executive normally interprets, and applies, the provisions in the Takeover Code relating to: the need for absolute secrecy before an announcement; when a possible announcement is required (and the contents of such an announcement); and what steps the Executive expects parties to a possible offer, and their advisers, to take to ensure they comply with their responsibilities in relation to these provisions (Rules 2.1 to 2.4(a), Takeover Code). In applying these Rules the Executive's overriding objective is to prevent the creation of a false market by ensuring the timely release of announcements relating to a possible offer for a company. This practice statement is more detailed than any released to date and PLC Corporate will be publishing a detailed note on the statement shortly. For background to this area, see PLC Practice note, Announcing the offer.

On 4 March 2008, the Code Committee of the Takeover Panel issued Public Consultation Paper (PCP) 2008/1. The PCP contains proposals to amend the Takeover Code (Code) to: (1) clarify the application of the Rules relating to "competition reference periods" (the period between announcement of a referral of an offer to the Competition Commission or of the initiation of proceedings by the European Commission under relevant merger regulations, until the announcement of clearance); and (2) codify existing practices of the Panel Executive in relation to these Rules. The PCP looks at three main issues: (1) What happens when a referred offeror, or potential offeror, is cleared by the competition authorities? It is proposed, among other things, that on clearance an offeror or potential offeror should make its intentions clear either by announcing an offer or stating that it has no intention of making an offer. Staying silent will not be an option. (2) Where an offer, which has been announced but subject to a pre-condition of clearance from the UK/EU competition authorities following a reference, is referred, should the offer period end until the competition reference period ends? It is proposed to amend Rule 12.2 to reflect current practice that the offer period continues during the competition reference period. (3) The ability of a target company to ask the Panel, under Rule 2.4(b), to impose a deadline on a potential offeror to clarify its intentions regarding the target (s

On 26 February 2008, Premier Group (Premier) announced that it was considering a possible offer for Imprint Plc (Imprint). Imprint is subject to competing offers (see PLC Legal update, Takeover Panel: results of auction procedure on competing offers for Imprint Plc ). One of the competing offers is being implemented by way of a scheme of arrangement. The shareholder meeting to vote on the scheme was scheduled for 29 February 2008. On 28 February 2008, Imprint announced that it had adjourned the shareholder meeting and Court Meeting to 14 March 2008 so as to enable the proposal from Premier to be clarified. On the same day the Takeover Panel announced that the Panel Executive had ruled that Premier must clarify its statement, for the purposes of Note 1 on Rule 19.3 of the Takeover Code (Code), by 5:00pm on 4 March 2008 by announcing either a firm intention to make an offer for Imprint or that it will not proceed with an offer. Requiring Premier to clarify its position 10 days before the date of the adjourned shareholder meetings is consistent with stated Takeover Panel policy. (Where a possible offer announcement is made during an offer period involving a scheme of arrangement (as in this case), section 4 of Appendix 7 of the Code requires a clarification to be made by a date specified by the Panel ahead of the shareholder meetings. Takeover Panel Response Statement 2007/1 (paragraph 6.4) states that the Panel's current policy on a scheme is to ask for clarification

The High Court has held that capital losses accruing to a member of one group of companies cannot be used to shelter capital gains accruing to a member of a group which it subsequently joins, even if the enlarged group is itself subsequently acquired by a third group.

On 8 February 2008 the Takeover Panel published statement 2008/6 giving details of an auction procedure established in relation to competing offers for Imprint plc made by OPD Group plc and Hydrogen Group plc.

In a ministerial statement made on 24 January 2008, the Chancellor, Alistair Darling, announced the introduction of a new relief for entrepreneurs effective from 6 April 2008.The draft legislation implementing the new entrepreneurs' relief is expected to be published mid-February. While the new entrepreneurs' relief will be good news for many shareholders who qualify for the new relief, it is unclear whether it will benefit those taxpayers who disposed of their shares before 2008-09 and deferred payment of the gain.

The Code Committee of the Takeover Panel has amended the Takeover Code as it applies to transactions implemented by way of a scheme of arrangement under section 425 of the Companies Act 1985 (to be repealed and replaced from 6 April 2008).

The Stamp Duty Reserve Tax (Investment Exchanges and Clearing Houses) (The London Stock Exchange) Regulations 2008 (the Regulations), made on 14 January 2008, remove the charge to SDRT on certain transactions effected on the London Stock Exchange (the LSE) which involve SIS x-clear Aktiengesellschaft, a recognised clearing house.When UK company shares are traded on the LSE, each agreement to transfer which arises under the clearing and settlement process has the potential to trigger an SDRT charge. The Regulations introduce exemptions, which eliminate the possibility of multiple SDRT charges on transactions involving the LSE, the London Clearing House Limited and SIS x-clear Aktiengesellschaft (and their respective nominees). The exemption will also apply to agreements to transfer non-UK shares where the share register is maintained in the UK or the shares are paired with UK company shares under section 99(6A) of the Finance Act 1986.The SDRT exemption will apply to agreements to transfer shares made on or after 4 February 2008 (and in the case of transfers under conditional agreements, where the condition is met on or after that date). Similar exemptions already apply to transactions involving other recognised stock exchanges and recognised clearing houses. For general information on SDRT, see Practice note, Stamp duty reserve tax.Sources: The Stamp Duty Reserve Tax (Investment Exchanges and Clearing Houses) (The London Stock Exchange) Regulations 2008 (SI 2008/52

On 14 January 2008, the Panel Executive published Practice Statement No.19 (Rule 19.3 - unacceptable statements). The Executive says that parties to a bid and their advisers should be aware that, during the course of a bid (especially where the bid is hostile or competitive), any suggestion of the possibility of an improvement or change to an offer will be particularly sensitive since it could lead to a false market in the target's securities. The Executive goes on to say that a party wishing to publicise its initial reaction to a development (the example given is an increase in a competing offer) may make a holding statement, for example that it is "considering its position" or "its options", but no language can be used which implies that it may improve or change its offer. Following amendments to the Takeover Code which came into effect on 14 January 2008, Rule 19.3 now makes it clear that, while a bidder must not make a statement to the effect that it may improve its offer without committing itself to doing so and specifying the improvement, it must also not "make a statement to the effect that it may....make a change to the structure, conditionality or the non-financial terms of its offer" without committing itself to doing so and specifying the change. Prior to this the Executive had said in Practice Statement No.7 (which was withdrawn on 14 January 2008) that it interpreted a statement to the effect that a bidder "may improve its offer" as including changes t

PLC Pensions has published an article looking at the basis of pension scheme trustees' negotiating powers, including the Pensions Regulator's moral hazard powers, and the role of trustees in negotiations with potential buyers. The role of the pension trustees in the bid for Alliance Boots and the approach to J Sainsbury is discussed. For more resources analysing trends, structures and market practice developments see PLC Practice note, Deal and practice analysis.

On 29 November 2007 the Code Committee of the Takeover Panel published Response Statement 2007/1: Schemes of Arrangement. This follows an external consultation on how the Takeover Code should apply to schemes (see PLC Legal update, Takeover Code consultation: Schemes of Arrangement (PCP 2007/1)). PCP 2007/1 proposed amendments to certain Code rules to refer to schemes, a new Appendix setting out specific rules for schemes and a list of Code provisions that would not apply to schemes. The Code Committee has largely adopted the proposals set out in PCP 2007/1 with some modifications and improvements to reflect responses received. Issues raised during the consultation included the timetable that should apply, whether a scheme can be used to satisfy an obligation to make a mandatory bid and schemes proposed without the support of the target board.The changes to the Takeover Code will take effect from 14 January 2008. The revised Code will apply to all transactions announced in accordance with Rule 2.5 of the Takeover Code on or after that date.

The Takeover Panel Executive has published a practice statement on the application of the Takeover Code to mergers to be effected under the Companies (Cross-Border Mergers) Regulations 2007.

Intermediaries are entitled to relief from stamp duty and stamp duty reserve tax (SDRT) on transactions in securities provided certain conditions are satisfied (see Practice note, Stamp duty reserve tax: Impact of SDRT in corporate finance transactions and Practice note, Repos: tax: Stamp duty and stamp duty reserve tax).The scope of the relief is widened with effect from 1 November 2007.Before 1 November 2007, for the relief to apply, the intermediary had to purchase the chargeable securities on an EEA exchange, a recognised foreign exchange where those securities are regularly traded or one of certain other multilateral trading facilities.Schedule 21 to the Finance Act 2007 widened the exemption to include transactions that are not effected on an EEA exchange, a recognised foreign exchange or a multilateral trading facility provided the intermediary is authorised under the Markets in Financial Instruments Directive (2004/39/EC) (MiFID) and securities of that type are regularly traded on a regulated market (as defined in MiFID). (See Legal update, Budget 2007: Stamp taxes reliefs for exchange intermediaries and Legal update, Finance Act 2007: Royal Assent.)The extended intermediaries relief applies to agreements to transfer securities that are made on or after 1 November 2007 or that become unconditional on or after that date.

On 29 October 2007 the FSA published issue 24 of its Market Watch newsletter in which it reports on a number of topics, most notably:- The results of visits to a number of hedge fund managers to review the controls used to mitigate the risk of market abuse.- The importance of timetables and insider lists to the FSA when it is conducting enquiries for suspected cases of market abuse, particularly insider trading. Market Watch gives some general pointers on the level of detail the FSA is looking for in timetables and insider lists prepared by firms.

On 24 October 2007, the Takeover Panel Executive published a practice statement looking at the application of the Takeover Code to mergers to be effected under the Companies (Cross-Border Mergers) Regulations 2007 (SI 2007/2974) (Regulations) which come into force on 15 December 2007. The Executive considers that certain cross-border merger transactions will be subject to the Takeover Code.

On 19 October 2007, the Takeover Panel published a statement of criticism by the Panel Executive of Monterrey Investment Management Limited (an Australian hedge fund manager) (Monterrey) for breaches of Rule 8.3 of the Takeover Code. Monterrey built up a 13.2 per cent. stake in a target, and a 4.9 per cent. stake in a bidder, over a two month period without making appropriate Rule 8.3 disclosures. When Monterrey became aware of these breaches it made retrospective disclosures. Rule 8.3 broadly requires that during an offer period, if a person owns or controls 1 per cent. or more (or as a result of the dealing will so own or control 1% or more) of relevant securities of a bidder or target, dealings by that person in such securities must be publicly disclosed no later than 3.30pm (London time) on the business day following the transaction. The statement sets out a number of reasons why the Executive believed Monterrey should have exercised caution (for example the size of the shareholdings) and been aware of disclosure requirements (for example they were summarised in various target/bidder announcements and Monterrey was a professional investor specialising in merger arbitrage). However perhaps the most compelling reason for the criticism (and a good example as to why the Panel Executive views breaches of Rule 8.3 particularly seriously) was that a competing bidder announced an offer for the target unaware of Monterrey's holdings. The Executive states that this infor

The Takeover Panel Hearings Committee has held that a conversion of loan notes into shares did not breach Rule 9 of the Takeover Code, as the sub concert parties previously identified had been subsumed into a single concert party at the time of the issue and conversion.

On 1 August 2007 the Panel Executive announced that CEREP Investment I Sarl (CEREP) (which has announced a firm intention to make an offer for Freeport Plc under Rule 2.5 of the Code) had decided not to request that the Hearings Committee of the Takeover Panel review the Panel Executive's ruling that CEREP should not be given permission not to proceed with the offer under Rule 2.7 of the Code and should post its offer document as soon as possible and in any event before 10 August (see PLC Legal update, Takeover Panel statement: Bidder must proceed with its proposed offer). Accordingly, CEREP must post its offer document by 10 August at the latest. CEREP had argued that it should not be required to proceed with the offer on the basis that it would be permitted to invoke certain conditions to the offer if the offer were made and it will be interesting to see how, if at all, these issues are addressed in the offer documentation (for background see PLC Legal update, Takeover Panel statement: Bidder seeking permission not to proceed with its proposed offer under Rule 2.7).

The Takeover Panel has published its review of the changes made to the Takeover Code during 2005 and 2006 regarding derivatives and options, highlighting areas to which it will give further consideration.

On 12 July 2007 the Takeover Panel issued a follow-up statement relating to Takeover Panel Statement 2007/13. Statement 2007/13 concerned a request by CEREP Investment I Sarl for permission under Rule 2.7 of the Takeover Code not to proceed with its proposed offer for Freeport Plc (see Legal update, Takeover Panel statement: Bidder seeking permission not to proceed with its proposed offer under Rule 2.7). The follow-up statement states that, as the Panel Executive continues to receive disclosures and submissions from both parties in relation to this matter, the Executive and the two parties have agreed that it is not yet appropriate for the Executive to make a ruling on this issue. The Executive intends to make a further statement in the near future.

On 9 July 2007 the Takeover Panel Hearings Committee announced that it had rejected a challenge raised by the WTV Shareholders' Action Group (WTVSAG) against an earlier ruling of the Executive in relation to World Television Group Plc (WTV). The Executive had previously ruled that the conversion into shares in April 2007 of convertible loan notes issued by WTV by a group of shareholders alleged to be a concert party had not triggered an obligation on that group to make a bid for the shares of WTV in accordance with Rule 9 of the Takeover Code. WTVSAG has not appealed the Committee's decision, which means that the decision is final. The Committee will publish full reasons for its decision in due course.

The Code Committee of the Takeover Panel is consulting on the application of the Takeover Code to a transaction implemented by way of a scheme of arrangement under section 425 of the Companies Act 1985.

On 11 June 2007, the Code Committee of the Takeover Panel issued an extensive Public Consultation Paper (PCP) 2007/1 on the application of the Takeover Code to a transaction implemented by way of a scheme of arrangement under section 425 of the Companies Act 1985 (scheme). Because the Takeover Code is drafted from the perspective of a transaction implemented by way of a contractual offer (rather than specifically to apply to schemes) the application of many of its provisions to schemes is not clear, some provisions are not applicable in the context of a scheme and a number of issues which may arise in a scheme are not covered. This situation has lead to the Panel Executive dealing with an ever increasing number of issues relating to schemes on a case by case basis, adopting a flexible approach where necessary. Although practices have been developed in relation to a number of these issues, not all of them have been publicised and the Code Committee believes (having undertaken an informal consultation exercise) the current lack of transparency and certainty is unsatisfactory and that the application of the Takeover Code to schemes should be codified. The Code Committee proposes to: (1) insert a new appendix into the Takeover Code, explaining how the provisions of the Takeover Code apply to schemes (and listing those which do not apply where a scheme is used). Issues addressed include: mandatory offers; holding announcements; competitive situations; switching offer s

On 23 May 2007 the Takeover Appeal Board published its reasons for rejecting an appeal by two individuals representing Eurotunnel unit holders with travel rights against an earlier decision of the Hearings Committee. The individuals had claimed that the offer made by Groupe Eurotunnel SA for their units as part of the restructuring of Eurotunnel was in breach of several provisions of the Takeover Code as it did not take account of travel privileges they held that would be lost if they accepted the offer. The Takeover Appeal Board did not agree that the Takeover Code had been breached as it did not accept that the travel privileges created a specific and separate class of share for the purposes of Rule 14.1 or 14.2 of the Takeover Code. It also did not think that unitholders with travel privileges had to be offered additional consideration to achieve equivalence for the purposes of General Principle 1 of the Code.

On 3 May 2007, the Panel Executive announced that CEREP Investment I Sarl (which has announced a firm intention to make an offer for Freeport Plc under Rule 2.5 of the Code and has also received permission for a short delay in posting the offer document) had sought permission, under Rule 2.7 of the Code, not to proceed with its proposed offer for Freeport (and post the offer document) on the basis that CEREP would be permitted to invoke certain conditions to the offer if the offer were made. Freeport has argued that such permission should not be given as CEREP should not be entitled to invoke conditions to the offer. The Executive has said that it will rule on this issue in due course and CEREP's obligation to post an offer document has been suspended until the issue has been resolved. Under the Code a bidder should not invoke any condition (or pre-condition) so as to cause the offer not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the condition or pre-condition are of material significance to the bidder in the context of the offer (Rule 13.4(a), the Code) (the acceptance condition and the Competition Commission/EC Merger Regulation lapse term are not subject to this requirement). The test of what is "material significance" has been considered a number of times by the Panel (see PLC Practice note, Announcing the offer: Invoking conditions and pre-conditions) and the threshold a bidder has to get over to inv

On 4 April 2007 the OPSI published the final Companies Act 2006 (Commencement No.2, Consequential Amendments, Transitional Provisions and Savings) Order 2007, along with final explanatory notes. The Order was made on 29 March 2007, having been approved by both Houses without debate, and will come into force on 6 April 2007. For background, see PLC Legal update, Companies Act 2006: draft second commencement order and PLC Practice note, Takeovers: Companies Act 2006, and for further information on the provisions of the Companies Act 2006 which will come into force on 6 April 2007, see PLC Practice note, Companies Act 2006 and Transparency Directive: timeline for implementation.

The Takeover Panel Executive has criticised N M Rothschild & Sons Limited for failing to prevent breaches of the Takeover Code in its role as financial adviser on a takeover offer.

The Companies Act 2006 (Commencement No.2, Consequential Amendments, Transitional Provisions and Savings) Order 2007, which brings the takeover provisions of the Companies Act 2006 into force, has been laid before Parliament.

The Financial Services Authority has amended its Handbook of rules and guidance to reflect the fact that it will no longer formally endorse the Takeover Code.

On 12 February 2007, the Panel Executive published a statement criticising N M Rothschild & Sons Limited, the financial adviser to British Telecommunications PLC (BT) in connection with BT's recommended cash offer for PlusNet PLC (PlusNet), for failing to prevent breaches of Rules 9.1 and 7.1 of the Takeover Code in connection with the purchase of approximately 32.4% of the issued share capital of PlusNet. On the facts of the case, the Executive did not make any public criticism of the brokers to BT who carried out the share purchases.The Executive accepted that the breach of Rule 9.1 was due to an inadvertent mistake and (as permitted under Note 4 of the Notes on Dispensations from Rule 9) allowed BT to dispose of sufficient PlusNet shares to take its holding below 30% and thereby avoid the consequences of having to comply with Rule 9. Compliance with Rule 9 would have obliged BT to alter the terms and conditions of its offer to conform with the requirements of Rule 9, including the waiving of a regulatory condition which BT was keen to retain.

On 26 January 2007 the Takeover Panel published a statement establishing an auction procedure to resolve the bidding process for Corus Group plc in accordance with Rule 32.5 of the Takeover Code. For background on Rule 32.5, see PLC Legal update, Takeover Code: amendments and PLC Practice note, The offer timetable: Day 46: Last date for revision of the offer, and for earlier Panel statements on the rule, see PLC Legal update, Competing Offers: Takeover Panel Statement 2005/16 and the articles there linked.

On 19 January 2007 the Takeover Panel published a practice statement on the interpretation of references in the Code to repealed sections of the Companies Act 1985. The Panel states that amendments to the Code to reflect relevant provisions in the 2006 Act and the DTR will be published and, where relevant, consulted on by the Code Committee in due course, and until then it will continue to interpret and apply the relevant provisions of the Code that refer to the 1985 Act as it has done to date. In particular, notwithstanding the repeal of Part VI of the 1985 Act (relating to the disclosure of interests in shares in public companies) effective 20 January 2007, and, from 6 April 2007, the repeal of section 328 (relating to the extension of section 324 to directors' spouses and children): (1) in complying with Note 1 on Rule 24.3, the disclosure in the case of directors of interests, short positions and borrowings should include those of persons whose interests in shares a director would have been required to disclose pursuant to Parts VI and X of the 1985 Act; and (2) whether a group of companies will be regarded as a single shareholder for the purposes of Note 1 on Rule 5.2 will continue to be determined by reference to sections 203(2) to (4) of the 1985 Act. For further information on the repeal of Part VI see PLC Practice note, Implications of the Transparency Directive for publicly traded companies, and for information on the repeal of s328 and various other prov

Against the background of a booming public takeover market, an increasing number of bidders are seeking protection for their deals by asking target companies to supplement break fees with matching rights that give the recommended bidder the right to keep its recommendation if it betters or matches a competing bid.

Resolution plc announced on 7 June 2006 that it had conditionally agreed to acquire from Abbey National plc its UK and offshore life insurance businesses. The consideration will be financed initially by a fully-underwritten rights issue (the largest in the UK since 2002) and new debt facilities.

On 2 June 2006 the Panel published a statement setting a deadline for a consortium including Goldman Sachs Infrastructure Group to clarify, for the purposes of Note 1 on Rule 19.3, its statement that it had made a proposal to BAA plc regarding a possible alternative offer to that available from Airport Investment and Development Limited and that following rejection of that proposal, the Consortium was continuing to review its options, either by announcing a firm intention to make an offer for BAA under Rule 2.5 of the Takeover Code or by announcing that it will not proceed with an offer (in which case the provisions of Rule 2.8 of the Code will apply unless the Panel consents otherwise). For general background, see PLC Practice note, Communications with shareholders and others: takeovers: Post 20 May 2006 regime: Accuracy of information.

The London Stock Exchange is consulting on proposed changes to the Alternative Investment Market Rules in relation to third party trading platforms.

The Code Committee of the Takeover Panel has published final amendments to the Takeover Code which will implement the Takeovers Directive (2004/25/EC) and the related provisions of the Company Law Reform Bill.

On 27 April 2006 the Takeovers Directive (Interim Implementation) Regulations 2006 were laid before Parliament (for background, see PLC Legal update, Takeover Directive: draft interim regulations). The final statutory instrument was published online on 5 May 2006, along with an explanatory memorandum. The final regulations are substantially similar to the draft, however Regulation 10 (Failure to comply with bid documentation) has been amended to remove the references to employees and agents in paragraph 2. Other technical and clarificatory amendments have also been made. The regulations will come into force on 20 May 2006.

The Department of Trade and Industry has published a draft of the Takeovers Directive (Interim Implementation) Regulations 2006.

On 21 April 2006 the Code Committee published Response Statement 2005/4, setting out its response to the consultation on the issues raised in PCP 2005/4 (see PLC Legal update, Takeover Panel: Code Committee consultation on abolition of SARs). The Committee has decided to abolish the SARs and to retain the rules relating to tender offers as proposed, and the final amendments to the Code will be implemented as set out in the consultation paper, as well as a number of minor amendments not consulted on. It is proposed that a new edition of the Code incorporating the changes, as well as the changes set out in RS 2005/3, RS 2005/5 and RS 2006/1, will be published shortly before 20 May, and the revised Code will come into effect and be applied from 20 May, including to on-going transactions which straddle that date, except where to do so would give the amendments retroactive effect.

On 20 April 2006 the Panel published a statement under Rule 2.4(b) setting a deadline for BAE Systems plc and VT Group plc to announce a firm intention to make an offer for Babcock International Group plc under Rule 2.5 of the Takeover Code or make a statement that they do not intend to make an offer (in which case the provisions of Rule 2.8 of the Code will apply unless the Panel consents otherwise). For general background, see PLC Practice note, Announcing the offer: Holding announcements.

On 31 March 2006 the DTI published a draft of the Takeovers Directive (Interim Implementation) Regulations 2006, as outlined in their guidance note (for further detail, see PLC Legal update, Takeover Directive: interim implementation). As previously announced, it is proposed that the regulations will come into force on 20 May 2006 pending Parliamentary consideration of the provisions in the Company Law Reform Bill implementing the Directive (see further PLC Legal update, Company Law Reform: publication of Bill).

On 3 February 2006 the Panel published a statement under Rule 2.4(b) setting a deadline for Ferrovial Infraestructuras SA, Caisse de dépôt et placement du Québec and GIC Special Investments Pte Ltd (the Ferrovial Consortium) to announce a firm intention to make an offer for BAA plc under Rule 2.5 of the Takeover Code or make a statement that they do not intend to make an offer (in which case the provisions of Rule 2.8 of the Code will apply unless the Panel consents otherwise). For general background, see PLC Practice note, Announcing the offer: Holding announcements.

The Code Committee of the Takeover Panel is consulting on various changes to the Takeover Code.

On 9 February 2006 the Panel published a statement under Rule 2.4(b) setting a deadline for Spearhead Ltd Inc to announce a firm intention to make an offer for Parity Group plc under Rule 2.5 of the Takeover Code or make a statement that it does not intend to make an offer (in which case the provisions of Rule 2.8 of the Code will apply unless the Panel consents otherwise). For general background, see PLC Practice note, Announcing the offer: Holding announcements.

On 23 January 2006 the Panel issued a statement noting that Honeywell International Inc had made an announcement indicating that it was considering whether to raise its offer for First Technology plc, and that the Executive considered the statement to be a breach of Rule 19.3 (for background, see PLC Practice note, Communications with shareholders and others: takeovers: Accuracy of information and PLC Legal update, Takeover Panel Executive Practice Statement no 7: Possible Improvement Statements). It further noted that Honeywell had confirmed that there can be no certainty that an increased offer will be made.

The Code Committee of the Takeover Panel is consulting on proposed amendments to the Takeover Code relating to dealings in derivatives or options.

The Takeover Panel Executive has published a practice statement to explain how it applies the Takeover Code to schemes of arrangement under section 425 of the Companies Act 1985.

On 23 November 2005 the Panel published a statement under Rule 2.4(b) setting a deadline for The Macquarie Group and its specialist listed and unlisted funds to announce a firm intention to make an offer for London Stock Exchange plc under Rule 2.5 of the Takeover Code or make a statement that they do not intend to make an offer (in which case the provisions of Rule 2.8 of the Code will apply unless the Panel consents otherwise). For general background, see PLC Practice note, Announcing the offer: Holding announcements.

On 9 November 2005 the Panel Executive published a practice statement to clarify its interpretation of Rule 21.2 and Note 1 on the Rule. In relation to agreements between offerors and offerees which seek to impose restrictions on offerees, the Executive states that it regards payments for any breach which has the effect of preventing the offer from proceeding or causing it to fail as falling within Rule 21.2. Therefore, the maximum total payments to the offeror for such breaches (including any inducement fee) should be 1% of the value of the offeree (as set out in the Rule), and the Executive will normally require that all relevant agreements include a clause stating that nothing in the agreement shall oblige the offeree to pay any amount which the Panel determines would not be permitted by the Rule. In relation to the 1% limit, the Executive notes that in Practice Statement No. 4 it said that the 1% limit can be calculated on the basis of the fully diluted equity share capital of the offeree. It clarifies that only options and warrants which are "in the money" may be included in the calculation, and when determining the value of the fully diluted share capital, the value to be attributed to such warrants and options is their "see-through" value, taking into account the offer price for the relevant shares and any exercise price. The value attributable to convertible securities is the offer price multiplied by the conversion ratio. Further, in relation to the offere

On 7 November 2005 the Panel published a statement reminding the market that the amendments to the Code set out in Response Statement 2005/2 relating to the disclosure of dealings in derivatives and options take effect from 7 November 2005 (for background see PLC Legal update, Takeover Code: response statement on dealings in derivatives and options (disclosure issues) and the articles there linked). The amended Code is now available on the "Code/SARs" page of the Panel's website. The Panel also reminded the market that the new Disclosure Forms set out in Appendix B of RS 2005/2 should be used for the disclosure of dealings carried out from the same date. A revised summary of the provisions of Rule 8 (Disclosure of Dealings During The Offer Period; Indemnity and Other Arrangements) as amended by RS 2005/2 is included in the Appendix to the statement.

On 2 November 2005 the Code Committee issued a consultation paper seeking comments on its detailed proposals to amend the Code in relation to dealing in derivatives or options by parties to an offer or their concert parties, or by persons whose interests (together with those of their concert parties) fall into the 30% to 50% band. Comments must be received by 27 January 2006.

On 17 October 2005 the Takeover Panel issued a ruling that Kellen Acquisitions Limited may not lapse its offer for East Surrey Holdings plc. While the Panel Executive acknowledged that there had been a number of developments since the announcement of the offer which were not anticipated by either of the parties, it was of the view that the developments were not of sufficient substance to permit Kellen to invoke any of the conditions. For general background on when a bidder may invoke a condition under the Code, see PLC practice note, Announcing the offer: Pre-conditions and conditions of the offer.

The Panel Executive has published Practice Statement 12 on its interpretation of presumption (4) of the Takeover Code definition of acting in concert.

On 16 September 2005 the Panel published a statement under Rule 2.4(b) setting a deadline for each of Apax Partners Worldwide LLP, Barclays Capital and The Tchenguiz Family Trust (ABT Consortium) and London & Regional Properties Limited to announce a firm intention to make an offer for Somerfield plc under Rule 2.5 of the Takeover Code or make a statement that it does not intend to make an offer. In the event of any announcement of a firm intention to make an offer by the deadline, the deadline will cease to apply to any party which has not by then announced that it does not intend to make an offer (which party will then be subject to Note 1 on Rule 19.3). In the event that either the ABT Consortium and/or L&R announces that it does not intend to make an offer, such party and any members of that consortium and any person acting in concert with any of them will, except with the consent of the Panel Executive, be bound by the restrictions contained in Rule 2.8 for six months from the date of such announcement. For general background, see PLC Practice note, Announcing the offer: Holding announcements.

The Director General of the Takeover Panel has commented that implementation of the Takeover Directive in the UK should have only a small day-to-day impact.

On 4 August 2005 the Panel Executive published Practice Statement No 12, clarifying that it interprets presumption (4) of the definition of "acting in concert" to mean that funds managed on a discretionary basis by a fund management organisation are to be treated as controlled by the organisation and not the underlying clients. The Executive will aggregate such shares with any shares held by the organisation for its own account in determining whether an obligation to make an offer under Rule 9.1 has been triggered. The Executive advises that organisations launching an investment trust or investment company, who wish to subscribe for shares in the company as principal or for discretionary clients, should consider: (1) Rule 9.1, where the aggregate holdings of all persons under the same control as the organisation, including holdings managed by the organisation on a discretionary basis, carry 30% or more of the company's voting rights. The aggregate percentage holding should be disclosed in the offer documents, making clear when an obligation to make an offer may arise; (2) if the no of shares to be issued to the organisation may vary, the maximum aggregate percentage holding should be disclosed; (3) if the group includes a principal trader and the group's aggregate holding is between 30% and 50% (or just under 30%), the trader may, with the Panel's consent, acquire shares in the company without triggering Rule 9.1, provided it is not an offer period and the trader's

The Takeover Panel has published a statement on withdrawal rights under the Prospectus Regulations 2005 and their effect on takeover bids where the consideration includes securities for which a prospectus is published.

The Department of Trade and Industry (DTI) has published the Government's response to the DTI's consultation document (published on 20 January 2005) seeking views on the implementation of the Takeover Directive. In light of the support received for the Government's approach to implementation (which the Government has said aims to preserve the strengths and core characteristics of the present system of takeover regulation in the UK within the new legal framework created by the Takeover Directive), the Government has said that it will, as part of the Company Law Reform Bill, bring forward in the current Parliamentary session primary legislation substantially on the basis of the proposals set out in the consultation document (see PLC Legal Update, EU Takeover Directive: DTI Consultation Document/Takeover Panel Explanatory Paper). The Government is also proposing to take forward as part of this process the recommendations of the Company Law Review to amend certain provisions of Part X111A of the Companies Act 1985 (the right of non-assenting shareholders to be bought out and the compulsory acquistion of non-assenting shareholders' shares by the bidder in a takeover offer). Draft legislative clauses have been published and explanatory notes on these clause are contained in Part C of the response document.

On 11 July 2005 the Panel published a statement under Rule 2.4(b) setting a deadline for Omega Underwriting Holdings plc to announce a firm intention to make an offer for Hardy Underwriting Group plc under Rule 2.5 of the Takeover Code or make a statement that it does not intend to make an offer (in which case the provisions of Rule 2.8 of the Code will apply unless the Panel consents otherwise). For general background, see PLC Practice note, Announcing the offer: Holding announcements.

On 20 June 2005 the Takeover Panel published a statement on withdrawal rights under the law implementing the Directive and their effect on takeover bids where the consideration includes securities for which a prospectus is published. Broadly, under new s87Q(4) FSMA, if a supplementary prospectus is published, shareholders who have accepted the offer to which the prospectus relates may withdraw their acceptances within 2 working days. The Executive considers that it is not clear when the withdrawal rights cease to be available. If the rights arise once the offer is unconditional as to acceptances but not yet wholly unconditional, there could be material implications (e.g. if the acceptance level falls below 50% due to withdrawals, statutory control could be lost, offeree shareholders' interests affected and financing arrangements put at risk). It has received legal advice that the sections can be interpreted to mean that the period for withdrawal ends once the offer has become or been declared wholly unconditional and the securities have been unconditionally allotted. (It also has advice that the rights will not arise if the exchange offer is made under an "equivalent document", not a prospectus.) It suggests that offerors intending to issue a prospectus add another condition or term to their offers. It will be concerned to ensure that offers will not continue to be unconditional as to acceptances where acceptances fall below the minimum 50%. Offerors who might need

The Panel Executive of the Takeover Panel has released a Practice Statement on cash offers financed by the issue of offeror securities.

The European Parliament has published the text adopted by it for a Directive on cross-border mergers.

The Takeover Panel has criticised Teather & Greenwood for breaches of Rule 38 of the Takeover Code while acting as a broker to an offeror.

On 13 May 2005 the Code Committee issued a consultation paper seeking comments on its detailed proposals to amend various rules of the Code and SARs to increase the disclosure of dealings in contracts for differences and other derivatives and options over shares. Comments must be received by 24 June 2005.

On 25 April 2005 the Takeover Panel published a statement of criticism of Teather & Greenwood for breaches of Rule 38 of the Code while acting as broker to an offeror.

On 25 April 2005 the Panel Executive released a Practice Statement on: (i) the conditions to which a cash offer, or an offer including part cash, may be subject when it is to be financed (wholly or partly) by the issue of bidder securities; and (ii) the form of the cash confirmation required in such cases (including whether it can be conditional on the success of the issue of the bidder's securities).

The Code Committee of the Takeover Panel has issued a response statement on the results of its consultation on market-related issues.

On 4 March 2005 the Takeover Panel published a statement setting out a timetable for the resolution of the bidding process for QXL Ricardo PLC in accordance with Rule 32.5 of the Takeover Code. (For previous Panel Statements on these offers, see PLC Legal update, Takeover Panel statements 2005/6, 2005/7 and 2005/8: recommencement of offer timetable and put up or shut up deadline.) Panel Statement 2005/16 is available on the Takeover Panel's website. (For background on Rule 32.5, see PLC Legal update, Takeover Code: amendments and for an earlier Panel Statement on the rule, see Legal update, Competing Offers: Takeover Panel Statement.)

On 22 February 2005 the Panel published a statement under Rule 2.4(b) setting a deadline for Apax Partners Worldwide LLP to announce a firm intention to make an offer for Woolworths Group Plc under Rule 2.5 of the Takeover Code or make a statement that it does not intend to make an offer (in which case the provisions of Rule 2.8 of the Code will apply unless the Panel consents otherwise). Panel Statement 2005/12 is available on the Takeover Panel's website. (For background, see PLC Practice note, Announcing the offer: Holding announcements.)

The Department of Trade and Industry has issued a consultation paper on the implementation of the Takeover Directive and the Takeover Panel has issued a paper explaining how it intends to change the Takeover Code to reflect the Directive and the DTI's proposals.

On 21 January 2005 the Panel published a statement confirming that it had again extended Day 60 (and Day 46) of Copthorn Limited's offer for Countryside Properties PLC, following another request from an independent committee of the board of Countryside. (For previous rulings, see PLC Legal update, Takeover Panel statement 2005/9: extension of offer timetable on target board request and consequent extension of 'put up' or 'shut up' deadline and the articles there linked.) The statement is available on the Takeover Panel's website. (For background, see PLC Practice note, The offer timetable: Day 60: Last date for offer becoming unconditional as to acceptances.)

This briefing looks at how the Department of Trade and Industry (DTI) proposes to implement the EU Takeover Directive and how the UK Takeover Panel intends to change the Takeover Code to reflect the Directive and the DTI's proposals.

On 14 January 2005 the Panel published a statement confirming that, as earlier indicated (see PLC Legal update, Takeover Panel statement 2005/4: suspension of the offer timetable), following the publication by Beleggingsmaatschappij Florissant NV of its firm intention to make an offer for QXL Ricardo PLC, under Note 4 on Rule 31.6, both Tiger Acquisition Corporation Limited and Florissant will be bound by the timetable established by the posting of the Florissant offer document. Earlier, following the announcement by the independent directors of QXL that they had withdrawn their recommendation for the Tiger offer in the light of interest from several parties for parts or all of the company, the Panel had published a statement confirming that the timetable of the Tiger offer remained suspended. (For further information on Rule 31.6 see PLC Practice note, The offer timetable: Day 60: Last date for offer becoming unconditional as to acceptances.) On 14 January 2005 the Panel also published a statement setting a deadline for Earthport PLC to either announce a takeover offer for Baltimore Technologies PLC under Rule 2.5 of the Code or make a statement that it does not intend to make an offer. (For background, see PLC Practice note, Announcing the offer: Holding announcements.) The statements are available on the Takeover Panel's website.

On 11 January 2005 the Panel published a statement stating that under Rule 31.6 the timetable of the offer by Tiger Acquisition Corporation Limited for QXL Ricardo PLC would re-start in the event that Beleggingsmaatschappij Florissant NV or another third party announced a firm intention to make a competing offer for QXL. It added that similarly, under Rule 31.9, if the independent directors of QXL announce a material disposal prior to the end of the QXL offer period, the timetable of the Tiger offer would normally be reset such that Day 39 would be the date of the announcement of such disposal. The statement is available on the Takeover Panel's website. (For background on Rules 31.6 and 31.9, see PLC Practice notes, The offer timetable: Day 39: Last date for new information from the target and The offer timetable: Day 60: Last date for offer becoming unconditional as to acceptances.)

On 7 January 2005 the Code Committee issued a consultation paper seeking comments on its broad proposals to amend various rules of the Code and SARs: (a) to increase the disclosure of dealings in contracts for differences (CFDs) and other derivatives and options over existing shares; and (b) in relation to the implications that should arise in respect of dealing in derivatives and options by parties to an offer or their concert parties, or by persons whose interests (together with the interests of their concert parties) fall into the 30% to 50% band. Comments must be received by 28 February 2005. As soon as possible after receipt of responses, the Committee intends to publish a further consultation paper making firm and detailed proposals for rule changes.

The Takeover Panel has set a deadline for Nikko Principal Investments Limited to either announce a takeover offer for Goshawk Insurance Holdings PLC or make a statement that it does not intend to make an offer.

On 12 October 2004 the Panel published a statement under Rule 2.4(b) setting a deadline for Nikko Principal Investments Limited to either announce a takeover offer for Goshawk Insurance Holdings PLC under Rule 2.5 of the Takeover Code or make a statement that it does not intend to make an offer (in which case the provisions of Rule 2.8 of the Code will apply unless the Panel consented otherwise). Panel Statement 2004/25 is available on the Takeover Panel's website. (For background, see PLC Practice note, Announcing the offer at Holding announcements.)

The Code Committee of the Takeover Panel has published its response statement on "put up or shut up" and no intention to bid statements.

The Code Committee of the Takeover Panel has published its response statement on possible offer announcements.

The Takeover Panel has issued a Practice Statement on strategic review announcements.

On 6 August 2004 the Code Committee published its response to comments received on its consultation paper in relation to "put up or shut up" and no intention to bid statements (PCP 2004/1), as well as its final amendments to the Code, which will take effect immediately. The amendments have been made largely as proposed in the consultation paper (see PLC Practice note, Announcing the offer), however (1) proposed new Note 1(b) on Rule 2.4 has been deleted, so that any pre-condition considered by the Panel to be acceptable in an announcement made in normal circumstances will be acceptable when an announcement has to be made pursuant to a "put up or shut up" ruling. (The Committee noted that it will be consulting shortly on the nature of acceptable conditions and pre-conditions.) (2) proposed Rule 2.4(b) has been amended so that it only applies in situations where the potential offeror has been named in a public announcement; (3) a further amendment has been made to new Rule 2.8 to enable an extension of the lock-out period in a case of breach; and (4) a new Note 4 (Media reports) has been added to Rule 2.8 to make it clear that the way in which a no intention to bid statement is reported can be as important as the statement itself, and to highlight the importance of advisers' responsibilities to alert their clients to the implications under the new rule of making such statements. (Note that on the same day the Committee published RS 2004/2, which also contains amendme

The Code Committee of the Takeover Panel has issued public consultation paper 14 on market-related issues.

On 21 July 2004 the Panel Executive published Practice Statement no 7 (Possible Improvement Statements). Under Rule 19.3 of the Takeover Code, parties to an offer or potential offer and their advisers are required to take care not to issue statements which, while not factually inaccurate, may mislead shareholders and the market or may create uncertainty. This general provision is supplemented by one specific example of an unacceptable statement, being a statement by an offeror "to the effect that it may improve its offer without committing itself to doing so and specifying the improvement". In its Practice Statement, the Executive emphasises that Rule 19.3 is not limited to statements about increases in the financial value of an offer: the Rule extends to any statement which may mislead shareholders or the market or which may create uncertainty (whether the statement is factually accurate). Similarly, it interprets the example in Rule 19.3 as also encompassing statements about amendments of a non-financial nature. It also reminds practitioners that parties and their advisers should be aware that any suggestion of the possibility of a revision to an offer will be of particular sensitivity and could lead to a false market in the securities of the offeree company. If an offeror wishes to publicise its reaction to some development, such as an increase in a competing offeror's offer, it may state simply, as permitted by Note 1 on Rule 19.3, that it is "considering its o

The Takeover Directive came into force on 20 May 2004.

The Takeover Panel has established an auction procedure to bring to an end the competing offers for Canary Wharf Group Plc.

The Takeover Panel has issued a Practice Statement to provide guidance for interpreting Note 2 on Rule 13 of the Takeover Code.

The Court of Appeal has held that, in the context of a takeover, the sale of the target company’s operating assets to another group company followed by a members’ voluntary liquidation was not unfairly prejudicial to a minority shareholder.

The recent announcement of a partial offer by the Guinness Peat Group for De Vere Group, which could result in the bidder holding 35% of the target, represents the first partial offer of its type for a number of years.

The Takeover Panel has allowed an appeal against a ruling of the Panel Executive that the exempt market-maker of an investment bank was connected to an offeror (for the purposes of Rule 38 of the Code) by reason of the relationship between the bank and its client (who was a member of the consortium behind the offeror). While not disagreeing with the Executive's general approach to the issue, the Panel concluded that the particular facts were "sufficiently compelling" to rebut the presumption in the Code that a financial adviser is in concert with its client in respect of the shareholdings of the adviser and other persons within the adviser's group (except in the capacity of exempt market maker) (see presumption (5) of "Acting in concert", Definitions, Code). Once this presumption was rebutted the exempt market-makers of the bank were not to be regarded as connected to the offeror. The Panel Statement setting out the reasons for the decision (and the facts on which it was based) contains a non-exhaustive list of the factors that may be relevant to the question of whether the presumption has been rebutted. The Panel has also recognised that the Code Committee may wish to review issues raised by the development of market-making activities in relation to the relevant provisions of the Code.

On 7 April 2004 the Takeover Panel published a statement setting out a timetable for the resolution of the bidding process for Canary Wharf Group PLC in accordance with Rule 32.5 of the Takeover Code. While the timetable is particular to its facts (which are further complicated by an offer being in competition with a proposed scheme of arrangement), this is only the second time the Panel has published a statement on Rule 32.5.

The Takeover Panel has published Practice Statements containing guidance on equality of information, site visits and meetings with management, controlled auctions and inducement fees.

On 2 March 2004 the Takeover Panel published a statement of criticism for failure to consult the Panel Executive as required by Note 1 to Rule 2.2 of the City Code on Takeovers and Mergers.

On 25 February 2004 the Code Committee issued a consultation paper (PCP 2004/2) seeking views on the consequences that should apply under the Code when a party includes detailed or specific information in a Rule 2.4 announcement relating to a possible offer about the terms on which that offer might be made, such as the price which is being considered by the potential offeror.

The Takeover Panel has issued several rulings requiring a potential offeror to announce either a firm intention to make an offer or an intention not to proceed with the offer.

Following newspaper reports of comments attributed to a bidder which indicated that the bidder may improve the terms of its offer, the Takeover Panel Executive has taken the opportunity to remind everyone: why the Code prohibits a bidder from making a statement to the effect that it may improve its offer without committing itself to doing so, and specifying the improvement (Rule 19.3); and that the Code requires information about companies involved in an offer to be made equally available to all shareholders as nearly as possible at the same time and in the same manner (Rule 20.1).

On 4 February 2004 the Takeover Panel published its reasons for dismissing an appeal against a ruling of the Executive granting AMY Holdings Limited a rescue waiver under Note 3 on Dispensations from Rule 9, in relation to Ronson plc.

The Code Committee of the Takeover Panel has ruled that Simon Glick constitutes a joint offeror in relation to the bid by Silvestor Holdings Limited for Canary Wharf Group Plc.

On 15 January 2004 the Takeover Panel issued a statement regarding the application of Note 1 on Rule 19.3 of the Takeover Code to holding statements made by two potential bidders for Canary Wharf Group plc.

On 16 December 2003 the European Parliament voted to approve the compromise draft of the proposed takeover directive, thereby bringing to an end, subject to final approval by Council, the long running attempt to establish some standard EU rules on takeover bids. For further information, see Takeover Directive.

The Takeover Panel has set a timetable for the resolution of the bidding process for Debenhams plc in accordance with Rule 32.5 of the Takeover Code.

The Takeover Panel has had to consider whether the participation of a potential target company shareholder in a consortium owning the bid vehicle can be properly considered to be that of a joint offeror so that the arrangements between the shareholder and the rest of the consortium would not infringe General Principle 1 and Rule 16 of the Takeover Code.

The Code Committee of the Takeover Panel has issued Public Consultation Paper 15 on amendments concerning offeree protection conditions.

The Executive of the Takeover Panel has criticised Mme Nahed Ojjeh for failure to disclose dealings in shares of Cordiant Communications Group plc in accordance with the Takeover Code.

On 21 July 2003, the Code Committee of the Takeover Panel published a public consultation paper on Offeree protection conditions: revision proposals relating to Rule 13 of the Takeover Code (PCP15).

The Takeover Panel has publicly criticised a shareholder for a failure to disclose various dealings in relevant securities in accordance with Rule 8 of the Takeover Code.

The Code Committee of the Takeover Panel has issued Public Consultation Paper (PCP) 14 on possible amendments to the Takeover Code concerning disclosure of relevant share capital.

On 30 April 2003 the Code Committee of the Takeover Panel released for consultation a number of proposed minor amendments to the Code concerning the disclosure of relevant share capital.

A timetable of the key legislative and regulatory developments for EU financial services

On 31 March 2003 the Panel issued a statement to explain the application of the disclosure requirements under the SARs and under Rule 8 of the Code during a period of When Issued dealing in the shares of two separate listed companies (an offer period having commenced in relation to one of them) to be created by way of demerger from a listed company (itself in an offer period).

The Takeover Panel has accepted that Capital Management and Investment PLC does not need to justify the price used to determine the value of its securities exchange offer for Six Continents PLC under Note 3 on Rule 6, if it disposes of all shares acquired for cash in the 3 months prior to the offer period and then donates any profits on that disposal to charity.

The Takeover Panel has requested that Caffe Nero Group plc announce a firm intention either to make, or not to make, an offer for Coffee Republic plc.

On 21 January 2003 the Takeover Panel issued a statement (2003/5) in which it criticised an offeror and an associate of the offeror for breaches of Rules 4.2 and 8 of the Code. The Statement includes a discussion of the application of Rule 4.2 to dealing in derivatives referenced to the share price of the offeree company's ordinary shares (here, contracts for differences), and the application of Rule 4.2 where the offeror has not yet announced the price of its offer. The Statement also discusses the application of Rule 8 (Disclosure) to dealings in such contracts for differences.

On 7 January 2003 the Code Committee of the Takeover Panel issued Public Consultation Paper (PCP) 12 on the possible amendment of Rule 31.9 of the Takeover Code (which prohibits an offeree company from publishing certain significant information in the context of an offer after the 39th day from the posting of the offer document) and consequential amendments to certain related rules (being Rules 31.5, 32.1 and 32.2). Responses are requested by 17 February 2003. More detail on the proposals will follow shortly.

The European Commission has presented a new proposal for a Directive on takeover bids after the previous proposal was rejected by the European Parliament in July 2001.

On 2nd October, 2002, the European Commission presented a new proposal for a Directive on takeover bids. A previous proposal was rejected by the European Parliament in July 2001. An analysis of the new proposals by PLC editors will follow shortly.

The Takeover Panel has revoked a dispensation from Rule 35.1 of the Takeover Code.

On 29th August, 2002 the Takeover Panel issued a further statement relating to its recent dismissal of an appeal against a grant of a waiver from Rule 9.1 of the Takeover Code. The statement emphasises the importance the Code places on an offeree company obtaining competent independent advice and on the need for parties and their advisers to consult the Executive on matters involving interpretation of the Code, particularly in a case involving the proposed grant of a waiver from a Rule 9 obligation.

On 19th August, 2002 the Takeover Panel issued a statement (2002/18) giving reasons for dismissing an appeal against the Panel Executive's decision to grant a waiver from Rule 9.1 of the Takeover Code in connection with a proposed acquisition of an interest of shares in a company.

The Takeover Panel issued its annual report for 2001-2002 on 18th July, 2002.

On 4 July, 2002, the Code Committee issued Response Statement 9 (RS 9) and Response Statement 10 (RS 10), its responses in relation to Public Consultation Papers 9 and 10, approving with immediate effect amendments to the City Code on Takeovers and Mergers (the Code) in relation to questions as to the potential concertedness of the trustees of an employee benefit trust with the board and/or a controlling shareholder and the corresponding addition of a new Note 5 to Rule 9.1 of the Code and in relation to shareholder activism and acting in concert and the corresponding amendments to Note 2 to Rule 9.1 of the Code.

The Code Committee of the Takeover Panel has invited comments on its revision proposals relating to dual listed company transactions.

The Takeover Panel has issued a statement on the mechanism for the release of information required by the Takeover Code.

The Code Committee of the Takeover Panel issued on 26 April, 2002, Public Consultation Paper (PCP) 11 relating to dual listed company transactions and frustrating action and revision proposals relating to Rule 21.2 of the Takeover Code.

On 12 April, 2002 the Takeover Panel issued statement 2002/9 concerning the mechanism for the release of information required by the City Code on Takeovers and Mergers.

The Code Committee of the Takeover Panel is to consult on whether the Code should be amended to apply to the establishment of dual listed company structures.

The Code Committee of the Takeover Code has invited comments on its revision proposals in two consultation papers.

The Code Committee of the Takeover Panel issued on 14 March, 2002, Public Consultation Paper (PCP) 9 relating to questions as to the potential concertedness of the trustees of an employee benefit trust (EBT) with the board and/or a controlling shareholder and the corresponding addition of new Note 5 on Rule 9.1 of the Takeover Code. The Code Committee is inviting comments by 9 May, 2002.

The Code Committee is considering whether to amend the City Code on Takeovers and Mergers (the Code) so that it will apply to the establishment of DLC structures.

The European Commission has cleared the acquisition of Compaq Computer Corp. by Hewlett-Packard Co.

The Code Committee issued its response to the proposals in Public Consultation Papers 6, 7 and 8 on 21st February 2002, approving with immediate effect amendments to the City Code in relation to: Purchases by the offeror of shares in the offeree in exchange for securities - which affects Rule 6.1 (Purchases before a Rule 2.5 announcement), Rule 7.1 (Immediate announcement required if the offer has to be amended), Rule 11 (Nature of consideration to be offered), the Notes on Rule 12.2 (After a reference or initiation of proceedings) and the Note 2 on Rule 32.1 (When revision is required).Resolution of competitive situations in the later stages of a bid - which affects Rule 31.6 (Final day rule (fulfilment of acceptance condition, timing and announcement)), Rule 35.1 (Delay of 12 months) and creates a new Rule 32.5 (Competitive situations) and Rule 35.4 (Restrictions on dealings by a competing offeror whose offer has lapsed).Aggregation of dealings requiring disclosure - which affects the Notes to Rule 24.3 (Aggregation).

The Code Committee of the Takeover Panel has issued response statements in relation to proposals previously set out in five consultation papers.

The Takeovers Working Party of the Law Society Company Law Committee and the City of London Law Society Company Law Sub-committee have published their views on the Code Committee of the Takeover Panel’s consultation papers PCP6 and PCP7.

The High Level Group of Company Law Experts set up by the European Commision has published its report on the issues raised by the European Parliament on the aborted Takeover Directive. The Commission is aiming to submit a revised proposal for a Takeover Directive in Spring 2002. This item contains a link to the report.

The Code Committee has today issued its response on a recent consultation process, approving with immediate effect amendments to the City Code in relation to:Equality of information to competing offerors (Rule 20.2).Disclosure of side agreements relating to offer pre-conditions and conditions (which affects Rule 2.5 (Announcement of firm intention to make an offer), Rule 24.2 (Financial and other information on the offeror, the offeree and the offer) and Rule 26 (Documents on display).The electronic acceptance of offers (which affects Rules 10 (Acceptance condition), Rule 31.6 (Final day rule) and Appendix 4).The Committee proposes to amend Rules 2.9, 5.4 and 38.5 of the Code, and SARs 3 and 5, to reflect changes in the Listing Rules in relation to the dissimentaton of regulatory information, but is awaiting the Financial Services Authority's final proposals.It has decided not to amend Rule 2.4 to provide for refresher announcements.This note contains a link to a copy of the Rules with changes marked up.

The Financial Services Authority has published a policy statement on the main issues arising from its consultation on the proposed endorsement of the Takeover Code and Rules Governing Substantial Acquisitions of Shares.

The European Commission has prohibited the completed acquisition of Legrand SA by Schneider Electric SA, the two main French manufacturers of electrical equipment.

The Code Committee of the Takeover Panel has issued two consultation papers on proposed revisions to the Takeover Code.

The European Commission has established an expert group to help prepare a new proposal for a takeover directive.

The Advocate General has given his opinion to the European Court of Justice that “golden shares” held in private companies are not necessarily incompatible with EC law.

The European Parliament and the Council of Ministers have reached agreement on the Takeover Directive.

The Takeover Panel has made a number of amendments to the Introduction to the City Code on Takeovers and Mergers and the Introduction to the Rules Governing the Substantial Acquisitions of Shares.

The European Parliament has approved amendments to the draft Takeover Directive.

The High Court has held that control (within the meaning of the Takeover Code) of a target company could be acquired by a person who did not control that company before acquiring a shareholding of less than 30%.

Nomura, the Japanese investment bank has failed in its appeal against the Takeover Panel Executive's decision to accept a sealed bid from the US joint venture Western Power Distribution Limited in the battle for Hyder the Welsh utilities group.

The Panel on Takeovers and Mergers has published a new edition of the Takeover Code.

The High Court has held that, provided it was properly drafted, a clause in a scheme of arrangement excluding recourse to the courts will not contravene public policy or the European Convention on Human Rights.

The Takeover Panel has suspended the offer timetable applicable to two rival bids for United Biscuits while the parties discuss a possible combination of their offers.

At a press conference on 19th January, 2000 a representative of Credit Suisse First Boston (CSFB), advisers to Bank of Scotland (BOS), commented on the intentions of some 60 National Westminster Bank (NatWest) institutional shareholders and the likelihood of their accepting either of the current offers for NatWest or, in the alternative, supporting NatWest’s independence.

The 1999 annual report of the Takeover Panel has been published.

The Takeover Panel has ruled that an offeror is bound by the exact terms of a firm statement that it will not increase its offer.

The Takeover Panel has considered three further issues relating to Great Universal Stores following its successful bid for Argos.

The Takeover Panel executive has agreed to convene a meeting of the Takeover Panel to hear an appeal by Great Universal Stores (GUS) against the executive's earlier ruling not to allow an appeal.

Changes to Rule 9 of the Takeover Code have been implemented with immediate effect, abolishing the creeper provision.

In the course of the hostile bid by Great Universal Stores plc for Argos plc, the Takeover Panel allowed Argos to publish sales figures after the 39th day following the posting of GUS’s offer document. The decision illustrates how the Panel applies Rule 31.9 of the Takeover Code, which restricts an offeree in publishing financial information after day 39.

It has been reported that the Takeover Panel is expected to announce shortly that it will ban market purchases of a target’s shares by the target’s advisers in a hostile bid.

The Takeover Panel has issued a statement following publication of the Department of Trade and Industry (DTI) Inspectors’ final report on Guinness’ bid for Distillers in 1986.

The Takeover Panel is still considering whether to amend the Takeover Code to require market-makers to disclose holdings of more than 1% in bidding companies and their targets.

Bernard Arnault chairman of Louis Vuitton Moet Hennessy (LVMH), continues to oppose the merger of Grand Metropolitan with Guinness.

The Takeover Panel has upheld a ruling of the Executive that Dresdner Kleinwort Benson was not an appropriate person to give independent advice to Cater Allen Holdings Plc. Cater Allen is the subject of a recommended bid by Abbey National Plc, formerly advised by Kleinwort Benson.

The Takeover Panel has publicly criticised BZW over its conduct during last December`s failed attempt to fend off CalEnergy`s bid for Northern Electric PLC, 1997, VIII(1),13,80). The Executive believes that there was no deliberate concealment of the performance fee by BZW. However, BZW accepts it ought to have considered the existence of the fee to be relevant to the deliberations of the Panel and the Executive.

The Takeover Panel has criticised the public relations firm Citigate and its client Triplex Lloyd PLC. The Panel described as "reprehensible" the leak by Citigate to the Financial Times and the Guardian of confidential information about William Cook Plc, which was the subject of a hostile takeover offer by Triplex.

Northern Electric Plc has been defeated in its battle to escape takeover by CE Electric UK Plc. The Takeover Panel had extended the deadline for counting acceptances following disclosure of a fee payable to one of Northern`s advisers.

A new and more competitive sub-underwriting commission structure has been devised by Schroders and used in two recent acquisitions funded by rights issues.

The Chancellor of the Exchequer has announced a change in the tax treatment of special dividends offered by a predator in a takeover, to take effect from 8th October, 1996. Shareholders who previously would have been able to claim payments of tax credits on such distributions will no longer be able to do so.

A holder of convertible preference shares in Trafalgar House has brought an unsuccessful action under section 430 of the Companies Act, 1985 against the directors and Schroders, their financial advisers. The holder claimed that the directors and Schroders were wrong to tell shareholders that the terms of the recommended bid for the group by Kvaerner were "fair and reasonable".

The Panel and the Securities and Investments Board (SIB) have both stated that the same rules that are applied to dealings in ordinary shares will be applied to dealings in equity based derivatives. The Panel have amended the Code to require bidders (or their associates) to disclose dealings in derivatives whose value is linked to the target company's shares.

The Panel Executive has decided that a purchase of BET shares on behalf of Rentokil which had been sold by the market-making arm of SBC Warburg, one of Rentokil's brokers, did not infringe Rule 38 of the Takeover Code.

The Takeover Panel Executive has censored Lazards, financial adviser to Rentokil, for failing to consult the Panel in the circumstances that preceded the announcement on 15th February, 1996 of a bid for BET by Rentokil.

The Takeover Panel has ruled that Granada, the TV and leisure group, had acted within the rules of the Takeover Code in stating that it could improve the profits of Forte, the hotels company fighting a £3.3 billion bid from Granada, by £100 million.

The Takeover Panel has ruled out any substantive action to ban the use in takeover battles of "contracts for differences", allowing the bidder to profit from the upward movement in the target's share price. No Panel Notice has been issued, but the Panel has indicated that changes concerning the use of derivatives after commencement of a takeover bid will be made to the Takeover Code at some time in the future.

The Takeover Panel has agreed with the ex parte decision of the Panel Executive not to require British Land to make a mandatory offer for Rosehaugh's shareholding in Broadgate Properties by virtue of the "chain principle".

Trafalgar House has been refused permission by the Takeover Panel to make an immediate new offer for Northern Electric, although the board of Northern Electric has said that it would agree to the Panel giving its consent to a new offer after the present regulatory uncertainty in the electricity industry has been resolved.

The financing of Cadbury Schweppes' acquisition of the Texan soft drinks manufacturer, Dr. Pepper, has involved use of an innovative underwritten enhanced scrip dividend scheme.

The Takeover Panel recently dismissed an appeal against a ruling by the Panel Executive that notwithstanding the omission from a press release of a reservation to a "no increase" statement a dispensation should be granted allowing reliance on the reservation (which had subsequently been included in the offer document).

The Takeover Panel recently dismissed an appeal by Chiltern Radio PLC against a ruling by the Panel Executive that Daily Mail and General Trust PLC, GWR Group PLC and Capital Radio PLC were acting in concert to obtain control of the company, CLT UK Radio Limited, the European broadcaster, has subsequently decided to let its recommended cash offer for Chiltern lapse.

The Takeover Panel's annual report for the year ended 31st March, 1994 stated amongst other things that there would be cases when the Panel might compel companies planning a bid to make a public announcement even though the announcement might jeopardise the chances of the offer being made.

The Delaware Supreme Court has issued a full opinion elaborating on its order preventing Paramount Communications Inc. from using certain poison pill defences to favour Viacom Inc's bid over a competing, hostile, higher offer.

The Takeover Panel has cleared Owners Abroad plc of misleading its shareholders during the course of a hostile takeover bid by its rival, Airtours plc, earlier this year.

The Takeover Panel has amended its rules on "creeping control" by reducing to 1% the purchasing freedom allowed under the Code during any 12 month period, with immediate effect. Previously the limit was 2%.

The Panel Executive has announced the results of its enquiry into whether there were breaches of the Takeover Code at the time of the offer by AlFayed Investment and Trust (UK) plc for House of Fraser plc in March 1985. It found that Mohammed, Salah and Ali Al Fayed were responsible for a breach of General Principle 12 of the Code then in force.

The Panel extended the timetable of the bid by Kalon Group plc for Manders (Holdings) plc, continuing its current practice of permitting extensions to take account of delays occasioned by issues before the competition authorities.

The Panel on Takeovers and Mergers has issued its Annual Report for the year ended 31st March, 1992.

Lonrho's long-running legal battle over House of Fraser continues with a Court of Appeal ruling that Lonrho can pursue its negligence action against Norman Tebbit, formerly Secretary of State for Trade and Industry. The defendants, having failed at first instance in their application to strike out Lonrho's claim on the grounds that the claim disclosed no reasonable cause of action or was an abuse of process of the court, had appealed to the Court of Appeal.

The Takeover Panel has dismissed an appeal against its decision that statements made in the offer document issued by Trafalgar House PLC in respect of its offer for Davy Corporation PLC were not misleading.

The Appeal Committee of the Panel has dismissed an appeal brought by dissident minority shareholders in Worcester Group plc against a decision of the Panel Executive concerning arrangements entered into between Robert Bosch GmbH, which had made a recommended cash offer for Worcester Group plc, and certain members of the target management.

The Panel has dismissed an appeal by a bidder against a ruling of the Panel Executive that its bid should not be extended beyond the final closing date. The bidder had asked for an extension of the timetable to allow new, allegedly material, information distributed to selected target shareholders to be made available to all the target's shareholders, but the Panel held that although new information had been distributed to selected target shareholders, but the Panel held that although new information had been selectively distributed it was not "material" so as to require general distribution under Note 3 to Rule 20.1.

The Panel Executive has reiterated its 1989 statement that it "must remain entitled at the appropriate time to take disciplinary proceedings against any of those involved" with Guinness' bid for Distillers and that it "should not be prevented from considering any Code issues which may arise in the light of ... facts ... not yet revealed".

The Panel has further extended the timetable of the bid by Redland for Steetley.

The Securities and Exchange Commission (SEC) issued a release on 4th June proposing a number of changes to the tender offer rules under US legislation. The changes are intended to encourage bidders for non-US companies to extend their bids to the target companies' US shareholders if the US ownership represents only a small portion of the target company's securities, although the risk of civil liability under US law and the US reputation for litigiousness may continue to discourage bidders from extending offers to US shareholders, particularly in the context of hostile bids.

It has been held that the normal language of a press announcement that a target company's board "will recommend" acceptance of a takeover offer does not give rise to a legal obligation to do so.

The Panel on Takeovers and Mergers is to take powers to regulate "cold calling" of private investors by bidders.

The Panel on Takeovers and Mergers has issued its Annual Report for the year ended 31st March, 1991.

The Takeover Panel has ruled that when a financial adviser is acting for a newly created bidder, such as an off-the-shelf overseas company, the standard of care required under provisions concerning the announcement of a bid is such that the bidder and its financial adviser should only announce the offer when an irrevocable commitment to provide the neccessary funds has been received from a party upon whom reliance can reasonably be placed at the time of announcement of the offer.

The International Stock Exchange (ISE) Council notice 6/91 (issued on 14th January, 1991) proposed limitations on the ability of a member firm to register as a market maker in the securities of a company involved in a takeover, unless that firm was already a market maker in the securities of one of the companies involved in the bid. A decision on whether to implement these proposals will now be deferred until June (Notice 26/91).

The litigation following Caparo Industries plc's takeover of Fidelity plc in 1984 has ended in a finding of fraud against two former directors of Fidelity. The litigation between Morgan Crucible co. plc and the former directors, financial advisers and auditors of First Castle Electronics plc is reported to have been settled out of court on undisclosed terms. This case will not, therefore, lead to any further clarification of the law of negligence as it applies to statements on which a bidder relies made by a target company in the course of a takeover bid.

The Panel on Takeovers and Mergers has ruled that documents circulated to a bidder's shareholders containing details of two separate independent valuations of the target company's properties provided sufficient information and advice on valuation to enable the shareholders to reach a properly informed decision on the bid, even though they produced widely differing figures.

The Court of Appeal has ruled that an arguable case exists that the directors, financial advisers and auditors of a company which is the subject of a contested takeover bid owe a duty to the bidder to take reasonable care in making statements about its financial position and prospects to the company's shareholders, if it is foreseeable that the bidder may rely on these statements.

The Panel on Takeovers and Mergers has ruled that a material change in the perceived financial state of the target company is not a situation in which a dispensation may be granted from the restriction on a bidder making a new bid for the same target company within 12 months of the failure of its previous bid.

A potential takeover bidder should not approach the board of directors of a listed company with a possible offer before obtaining appropriate professional advice and making the necessary financial arrangements. Failure to make proper preparations can lead to the premature announcement of a potential bid creating uncertainty in the market for the company's shares. The Stock Exchange has criticised the announcement of a possible offer by Mr Asil Nadir for Polly Peck International PLC as premature.

The problem of non-compliance with rules on disclosure of dealings in shares during a takeover bid has been highlighted in a recent letter from the Stock Exchange to its members.

The Panel on Takeovers and Mergers has issued its annual report for the year ended 31st March, 1990.