Rule 5.2(c)(iii) of the Takeover Code has been amended to allow an offeror to be free to acquire interests in offeree shares following the first closing date of its offer or any competing offer irrespective of whether it has been clarified whether the offer will be the subject of a Phase II investigation by the Competition Commission or the European Commission. This amendment took effect on 8 March 2010.
This means that a hostile offeror will be free to acquire interests in shares representing 30% or more of an offeree’s shares once the first closing date is reached, subject to Rules 9 and 32.
Background
Rule 5.1 of the Code restricts a person from acquiring interests in shares in a company when that acquisition would result in him, together with his concert parties, being interested in shares carrying 30% or more of the voting rights of that company. Rule 5.2 sets out certain exceptions to the restrictions in Rule 5.1. In particular, Rule 5.2(c)(iii) provided that an offeror may make acquisitions that would otherwise be restricted by Rule 5.1 after:
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the first closing date of its offer or, if earlier, of any competing offer, has passed; and
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confirmation has been received that either its offer or (if earlier) any competing offer will not be the subject of a “phase II” investigation by the Competition Commission or the European Commission (unless the offer, or any competing offer, falls outside the jurisdiction of the UK and EC competition authorities).
Click here to see the Panel’s response paper on this amendment. Click here to see the Panel’s consultation paper.
