Linklaters advises ArcelorMittal in successfully defending claims that it triggered an MGO for China Oriental

 

The Takeovers and Mergers Panel (the Panel) has this month upheld a ruling by the Takeovers Executive (the Executive) granting ArcelorMittal a waiver from the obligation to make a mandatory general offer for China Oriental Group Company Limited under the Hong Kong Code on Takeovers and Mergers.  ArcelorMittal had sought and obtained the waiver in connection with the unwinding of certain put option arrangements, pursuant to which the voting rights it held in China Oriental increased from 29.9% to approximately 47%. 

n its decision, the Panel confirmed that the Executive has the power to grant such waivers after taking into account all relevant factors.  It also confirmed that in normal circumstances parties should be confident that they can act on rulings received from the Executive, otherwise this would serve to undermine the consultation process and the efficacy of obtaining rulings from the Executive in advance of any action; while it is always open to the Panel to alter or reverse a ruling, it should still be alive to the broader consequences of such a decision and take this into account.  This matter highlights again the importance of early consultation with the Executive in cases where an MGO obligation may arise.  This is emphasised in the Takeovers Code itself and the Executive reiterated expressly at the Panel hearing the importance of the consultation process.

This decision follows the Panel’s decision in September 2014 that, as had been previously ruled by the Executive, no mandatory general offer obligation arose on the part of ArcelorMittal or any of its concert parties as a result of changes made to the put option arrangements in respect of the China Oriental shares.

Linklaters advised ArcelorMittal in relation to the matters considered in both the 2014 and 2015 Panel decisions.

The Linklaters team was led by corporate partner Christopher Kelly and counsel Alex Bidlake.