Monday, June 7, 2010

UK: Consultation Paper on Takeover Bids

While the SEBI Takeover Regulations in India are a subject-matter of detailed review, elsewhere in the U.K. there are proposals for amending certain aspects of the City Code on Takeovers and Mergers. These changes have been necessitated on account of the widespread debate that followed the takeover of Cadbury plc by Kraft Foods Inc. early this year.

Towards that end, the Code Committee of the Takeover Panel has issued a Consultation Paper to review certain aspects of the regulation of takeover bids. The paper includes a detailed discussion of matters such as acceptance condition thresholds, the “disenfranchisement” of shares acquired during an offer period, disclosure of securities holdings, matters relating to advice on takeover offers, inducement fees, and similar matters. While the discussion in the paper may not directly resonate with many of the developments on the takeover front in India, it nevertheless provides conceptual clarity on a number of issues, although it does not attempt to provide any solutions. Overall, it is an interesting read.

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