SGS 10 (Conduct of Takeover) Flashcards
What does the offer period trigger?
Certain announcements under Rule 8
Rule 2.9 - Target announces no of shares in issue.
Rule 2.11(a) - copy of 2.4 announcements sent to shareholders of offeree.
When can the offer document be published?
Rule 24.1(a) - within 14 days provided it obtains consent of offeree.
Contain info set out in Rules 23 and 24.
Which provisions govern the defence document?
Rules 25.1
Rule 19.2, offeree directors take responsibility for the document.
What does the offeree board need to keep in mind as regards communications?
General Principles 1, 2 and 3 (treat all SHs equivalently)
Note 1 to Rule 19.1 .
Give 3 potential strategies directors could use in relation to defences?
Frustrating actions (selling off valuable assets)
White knight
Get majority shareholders on side (address management concerns or operational issues).
What must be kept in mind when considering frustrating actions?
The need for shareholder approval under Rule 21.
When is the first closing date?
It depends - will be stated in offer document but note that the offer must be kept open for at least 21 days (Rule 31.1).
What is the effect of the Bidder including a R 12.1(c) condition?
Gives bidder ability to withdraw from offer where decision not to proceed with Phase 2 is subject to terms unsatisfactory to Bidder e.g. decision not to refer to Phase 2 provided Bidder disposes of some of its existing businesses or assets.
What is the effect of Rules 12.1(a) and (b)?
if offer falls within provisions for Phase 2 CMA reference or EU Commission proceedings, there MUST be a term that offer will lapse.
What is the effect on the timetable if a competitor makes a bid?
R 31.6, timetable reset to Day 0.
What provision governs acceptances?
R 17.1: timing of announcement of level of acceptances.
What three options are available to a bidder who has failed to obtain an appropriate level of acceptances?
EXTEND offer period.
REVISE (note that last day an offer can be revised will be day 46, R 32.1(c)).
Let it LAPSE.
What happens if there is a delay in decision whether or not to carry out a Phase 2 CMA reference?
R 31.6(a)(iii), Panel will usually consent to extension of Day 60.
Note 5, normally extend Day 38 to the second day following the announcement of the decision on whether or not there is a Phase 2 CMA Reference or initiation of Phase 2 European Commission proceedings.
What happens to shareholders who had accepted the original offer where it is revised?
Entitled to revised consideration, R 32.3
R 34.1, entitled to withdraw their acceptances up to earlier of periods specified.
What must a successful bidder then do?
R 31.8, pay shareholders consideration within 14 days.
