Public M&A – Takeover Code changes on conditions and timetable in force

Changes to the Takeover Code provisions on conditions to an offer, particularly those relating to regulatory / merger control clearance, and the offer timetable took effect on 5 July 2021.

The revised rules, which were set out in the Takeover Panel’s response statement RS 20201/1 (published in March 2021), apply to all firm offers which are announced (Rule 2.7 announcement) on or after 5 July. Firm offers announced prior to that date (or in competition with an offer announced prior to that date) will continue to be subject to the old rules.

There were three themes in the consultation:

• Regulatory clearances – The historical, special status for EU merger clearance and UK Competition and Markets Authority (CMA) clearance has been removed, and the Panel’s existing and longstanding policy of allowing a bidder to invoke regulatory conditions only where sufficiently material has been restated with additional guidance on when a condition may be invoked;
• Simplifying the timetable for contractual offers – All offers will run until Day 60 (unless a bidder chooses to implement a 21 day “bullet” offer or otherwise accelerate closing), reflecting the fact that the vast majority of offers run until Day 60 in practice and shareholders ordinarily expect them to; and
• Introducing the idea of a flexible contractual offer timetable – It will be easier to suspend the offer timetable on a contractual offer, to accommodate regulatory timetables running longer than 60 days and remove some disadvantages of the old fixed contractual offer timetable when compared to schemes of arrangement.

We discuss the rule changes in more detail, and the impact on offer announcements and documents, in this briefing.

The revised Takeover Code (along with the previous edition, which remains relevant for deals announced before 5 July) is available on the Takeover Panel website.