The Takeover Panel has criticised Universe Bidco Limited (a wholly owned subsidiary of URS Corporation) for a breach of Rule 19.3 of the Takeover Code. Rule 19.3 prohibits an offeror from making any statement to the effect that it may improve its offer without committing itself to doing so and specifying the improvement.
In response to the announcement of a competing offer for Scott Wilson Group plc, Universe Bidco had announced that it was considering increasing its offer to 245p per share in line with the matching rights arrangements it had agreed with the offeree. The “matching rights” gave Universe Bidco the right to match any superior offer in an agreed time frame.
Irrespective of the matching rights arrangements, the Takeover Panel ruled that Universe Bidco must announce by a fixed time either the terms of an increased offer of 245p or above per share or that it will not be increasing the terms of its offer. Universe Bidco did announce by such deadline a recommended increased offer and the competing offeror withdrew.
In contrast to previous breaches of Rule 19.3, it is worth noting that in this case the Panel imposed a deadline for clarification of the improvement statement. The ruling shows the tough approach taken by the Takeover Panel on compliance with Rule 19.3.
Click here for the ruling.
