The Takeover Panel has stated that it will be consulting on whether there is a need to improve the Takeover Code as well as the existing Code timetable for offers.
Panel announcement
This statement comes in the wake of widespread commentary on the successful offer by Kraft Foods for Cadbury plc as well as suggestions from Lord Mandelson.
Cadbury’s former chairman has also publicly commented that the protracted Code timetable for the offer allowed hedge funds to build up significant determining stakes and that the existing acceptance threshold should also be examined.
Very little detail has been provided to date by the Takeover Panel as to the scope of the proposed amendments. A consultation paper will be published “as soon as practicable”. The Panel’s announcement is available here.
Lord Mandelson’s suggestions
The Secretary of State for Business, Innovation and Skills has made a speech in which he welcomed the Takeover Panel’s statement and called for greater ability for all shareholders on both sides to scrutinise the planning, financing and intentions behind takeovers. In particular, he said that there is a case for:
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raising the voting threshold for securing a change of ownership to two thirds;
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lowering the requirement for disclosure of share ownership during a bid from 1% to 0.5% so companies can see who is building up stakes on their register;
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giving bidders less time to “put up or shut up” so that the “phoney takeover war” ends more quickly and properly evidenced bids must be tabled;
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requiring bidders to set out publicly how they intend to finance their bids not just on day one, but over the long term, and their plans for the acquired company, including details of how they intend to make cost savings; and
- requiring greater transparency on advisors’ fees and incentives.
