UK Public M&A Monthly Activity Update: April 2024

Firm Offers breakdown this month:

Year to date breakdown:

April 2024 Updates:

Government response to NSI call for evidence

The government has published its response to its November 2023 call for evidence on the National Security and Investment Act 2021 (NSI Act), setting out its proposed next steps for reform to the regime.

The NSI Act introduced a new framework for the review of transactions and investments on national security grounds in the UK with effect from 4 January 2022. The government published a Call for Evidence on the scope and implementation of the regime in November 2023.

The government says in its response that it will:

• publish an updated statement on how the Secretary of State expects to exercise the call-in power – the “Section 3 Statement” – to give greater clarity on the areas of the economy the government considers most sensitive and how the government assesses the national security risks of a transaction;
• publish updated Market Guidance Notes to address topics raised in response to the call for evidence, including the application of the NSI Act to academia and outward direct investment;
• consult on amendments to the definitions of the 17 sectors where notification of transactions is mandatory, which will include proposals for the semiconductor and critical minerals areas, as well as exploring the possibility of adding water to the sensitive sectors; and
• consider the feasibility and impact of proposed targeted exemptions for certain transactions, such as internal reorganisations.

It has rejected calls for a fast-track process for certain types of acquirer (e.g. those who have already had a prior transaction cleared through the NSI system), reiterating that some targets are considered so sensitive that they will always warrant screening and so transactions need to be assessed on a case-by-case basis. 

The government says it will publish the updated Section 3 Statement and Market Guidance Notes in May 2024 and the consultation on changes to the sector definitions by summer 2024.

FCA secures conviction of senior staff member at a listed company for insider dealing

Stuart Bayes has been found guilty of two offences of insider dealing in a prosecution brought by the Financial Conduct Authority (FCA).

Mr Bayes was employed as a site manager at RPC Group Plc. Through his employment, he learned that RPC was about to announce the takeover of BPI plc (a listed company). That information was inside information. Ahead of the deal being announced to the market, Mr Bayes traded in BPI shares, resulting in a profit of £132,000. He also encouraged another individual to trade in BPI shortly before the announcement.

After the jury failed to reach a verdict in a previous trial in 2022, the FCA pursued a retrial and Mr Bayes has now been found guilty of insider dealing – a criminal offence punishable, on conviction, by a fine and / or up to 7 years’ imprisonment at the time of the offending. For offences committed on or after 1 November 2021, the maximum sentence is up to 10 years’ imprisonment. He will be sentenced on 26 April 2024. The other individual was found not guilty of insider dealing.

Useful links

• Herbert Smith Freehills Takeovers Portal
• Herbert Smith Freehills Public M&A Podcast Series
• The Takeover Code
• The Takeover Panel’s Disclosure Table (detailing offeree companies and offerors currently in an offer period).