There is also the issue of price which could rise or fall dependent on which division we are competing in so suggestions that GSB could be gone by the end of the year looks wildly optimistic. On top of all that is manager David Moyes claim that he knows nothing about any takeover bid and doubts whether there is any truth in it.
We all wait with baited breath for what The Guardian claims could be a third American bid over the next few weeks. Under the City Code, share dealings by concert parties are treated effectively as dealings by the bidder itself. Persons acting in concert are defined as persons who, pursuant to an agreement or understanding whether formal or informal , co-operate to obtain or consolidate control of a company or to frustrate the successful outcome of an offer for a company.
Certain persons are presumed to be acting in concert e. Acquisitions of shares in a potential takeover target may give rise to an obligation to disclose details of voting rights held under DTR 5 and the City Code.
The target then has to notify a regulatory information service before the end of the trading day following receipt of the notification, which will then publish the information. A general prohibition on "offer-related arrangements" between bidders and target companies was included in the City Code in September This followed concerns that it had become standard practice in the context of recommended offers for bidders to insist on various deal protection measures which could have had a detrimental effect on target shareholders by, for example, deterring competing bidders from making an offer.
Except with the consent of the Panel, neither the target company nor any person acting in concert with it may enter into any "offer-related arrangement" with either the bidder or any person acting in concert with the bidder during an offer period or when an offer is reasonably in contemplation.
An "offer-related arrangement" is defined widely as any agreement, arrangement or commitment in connection with an offer, including any inducement fee arrangement or other arrangement having a similar or comparable financial or economic effect.
The prohibition on "offer-related arrangements" does not cover:. If there is any doubt as to whether any proposed agreement, arrangement or commitment is subject to this prohibition, the Panel should be consulted.
The general prohibition on "offer-related arrangements" extends to break fees also known as inducement fees. The only exceptions to this prohibition are:. There is no prohibition under the City Code, however, on a bidder agreeing to pay a reverse break fee — for example, if it does not receive the necessary regulatory clearances to complete the takeover. Bidders are still permitted to, and frequently do, seek irrevocable undertakings from target shareholders to accept the takeover offer.
It is also normal for target directors to give irrevocable undertakings to accept the takeover offer and for these to remain binding even if a higher offer emerges. Any person proposing to contact a private individual or small corporate shareholder with a view to seeking an irrevocable commitment must consult the Panel in advance.
The City Code was amended in to introduce the concept of "post-offer undertakings" and "post-offer intention statements". A party to an offer who proposes to make a statement relating to any course of action that it commits to take or not take after the end of the offer period being, a "post-offer undertaking" must consult the Panel in advance of making that statement.
The bidder must include any "post-offer undertaking" in its offer document and the "post-offer undertaking" must specify any period for which the undertaking is made or the date by which the course of action will be completed including any qualifications or conditions to which it is subject.
Where a party makes a "post-offer undertaking", it must comply with its terms for the period of time specified in the undertaking and complete any course of action committed to by the date specified in the undertaking unless, of course, a qualification or condition can be relied upon. The relevant party is also required to submit written reports to the Panel after the end of the offer period at such intervals and in such form as the Panel may require. The Panel may require a party to an offer which has made a post-offer undertaking to appoint a supervisor to monitor compliance by that party with that undertaking.
A post-offer intention statement is any public statement made by a bidder or target about what it intends to do or not do after the end of the offer period. If a party makes a post-offer intention statement and, during the 12 month period from the date on which the offer period ends, or such other period of time as was specified in the statement, that party decides to take a different course of action, the Panel must be consulted.
When the relevant period has ended, the party which made the post-offer intention statement must confirm in writing to the Panel whether it has taken, or not taken, the course of action it stated in the post-offer intention statement that it intended to take or not to take and publish that confirmation via a regulatory information service. The bidder is not formally required to have a financial adviser in order to make a takeover offer, but will generally have one. There are often other good reasons why a bidder will require a financial adviser.
The target company must, however, always have a financial adviser. This is because the City Code requires the target board to obtain competent independent advice on the financial terms of any offer and make the substance of that advice known to shareholders. If you would like any further information on any of the matters addressed within this guide, please speak to Nick Graves , Dominic Davis , Rupert Weston , Chris Godfrey or your usual contact at Burges Salmon.
Guide to public takeovers in the UK. Quick links The regulatory framework An overview of the regulatory regime Which companies are subject to the City Code? General principles under the City Code Public takeovers vs private sales Approach to representations, warranties and indemnities Due diligence Exclusivity arrangements and break fees Conditionality Cash confirmation Equality of treatment Commitment Announcement obligations Requirement for secrecy When is an announcement required?
Who is responsible for making the announcement? Can we seek dispensation? Consequences of an announcement Offer structures and timetables Contractual takeover offers and schemes of arrangement Timetables Minority squeeze-out mechanism Consequences of a failed takeover offer. Stakebuilding and mandatory offers Purpose of stakebuilding Key legal and regulatory considerations Deal protection Prohibition on offer-related arrangements Break fees Irrevocable undertakings Post-offer restrictions Post-offer undertaking Post-offer intention statement Do we need a financial adviser?
The bidder The target company How can Burges Salmon help? Key contacts for more information. The regulatory framework 1. An overview of the regulatory regime The conduct of takeovers and mergers of UK public companies and, in certain cases, private companies is regulated by the City Code on Takeovers and Mergers the "City Code".
Which companies are subject to the City Code? The City Code does not apply to offers for open-ended investment companies. His focus is on Internet, digital media, and software companies, and he was the founder of several Internet companies. Richard is the author of several books on startups and entrepreneurship as well as the co-author of Poker for Dummies and a Wall Street Journal-bestselling book on small business.
He can be reached through LinkedIn. David A. He is a member of the Board of Directors of the Giffords Law Center to Prevent Gun Violence and has served on additional educational and charitable boards. Richard V. He has over 35 years of experience in the areas of mergers and acquisitions, securities law, and corporate law.
This article was originally published on AllBusiness. This is a BETA experience. You may opt-out by clicking here. More From Forbes. Nov 8, , pm EST. Sep 28, , am EDT. Aug 30, , am EDT. Aug 18, , pm EDT. Aug 2, , am EDT.
Jul 26, , pm EDT. Jul 13, , am EDT. Jun 13, , am EDT. Combining two companies doesn't make sense unless the end product is greater than the sum of two parts; deals are too risky, complicated, and expensive to just stand pat.
This is the longest phase, and it should be the most deadline-oriented. The riskiest part of a transaction is the execution stage. Industry experts often advise that it can take between one and three years to synthesize and integrate the new company. Career Advice. Company Profiles. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page.
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