Timetable - General

Question 1

General flowchart/considerations

Answer 1

• The timetable for an offer centres on whether a GM will be required and, if it is required, what the notice period will be.
• Three key questions that any company needs to ask itself before issuing shares

1. Is there a cap on the number of shares?
   - 2006 CA – SR to remove or increase (s. 21 CA)
   - 1985 CA – consider authorised share capital in MoA (s. 28 CA) - OR to remove, SR to increase
2. Do the directors have authority to allot?
   - Consider the OR passed at the AGM and if further authority is required under s. 551 CA.
3. Do pre-emption rights need to be disapplied?
   - Listed companies must comply with PE rights in s. 561 CA and LR 9.3.11R.
   - Consider the SR passed at the GM and if further disapplication is need under either:
   i) Disapplication of statutory and Listing Rule pre-emption rights by asking SH to pass SR, s. 570-1 CA; or
   ii) Comply with statutory rights by making a pre-emptive offer, following the procedure contain in s. 562 (Gazette route)

Question 2

What is Gazette route?

Answer 2

S.562 CA 2006 provides that a statutory pre-emptive offer:

i) may be made in hard copy or electronic form (s.562(2) CA 2006).
ii) may be made, if a shareholder does not have a registered address in the EEA, by causing it to be published in the London Gazette (s.562(3) CA 2006). If a company follows the procedure contained in s.562 CA 2006, it is therefore often referred to as following the “Gazette Route”;
iii) must state a period of not less than 14 days during which it may be accepted (and the offer may not be withdrawn during that period) (s.562(4) and (5) CA 2006); and
iv) the 14 day period will begin with the day on which the offer is sent if made in hard copy or electronic form and the date of publication if made by publication in the Gazette (s.562(5) CA 2006).

Question 3

Disapplication Route under s.. 570-571

Answer 3

• We focus on the disapplication route in EF.
• This would give a listed company additional flexibility when structuring its rights issue, even though the terms of the rights issue itself would still give most shareholders a contractual right to subscribe for shares in proportion to their existing holding.
• There are 2 principal reasons for why disapplication would be recommended:
  i) Overseas shareholders – disapplying PE rights allows the company to exclude overseas SHs and avoid compliance with onerous securities laws in those jurisdictions (e.g. USA)
  ii) Fractional entitlements – allows a listed company to combine fractional entitlements and sell resulting shares in the market

Question 4

Notice Period for General Meetings other than AGMs

• General meetings other than AGMs: notice period for a general meeting other than AGM of a traded company is at least 21 clear days
• This may be reduced to 14 clear days: s.307A(1)(a) and s.360(2) CA 2006) provided the following conditions are met:
  i) GM is not AGM
  ii) company provides a facility enabling all shareholders to vote electronically at any meeting held on such reduced notice
  iii) shareholders have passed a special resolution at or since the most recent AGM approving the shorter notice period.

Answer 4

Notice period for a general meeting other than AGM of a traded company is at least 21 clear days

• This may be reduced to 14 clear days: s.307A(1)(a) and s.360(2) CA 2006) provided the following conditions are met:
  i) GM is not AGM
  ii) company provides a facility enabling all shareholders to vote electronically at any meeting held on such reduced notice
  iii) shareholders have passed a special resolution at or since the most recent AGM approving the shorter notice period.