The Takeover Panel has published a third Panel Bulletin, which focuses on irrevocable undertakings and letters of intent and the requirements if a shareholder cannot, or no longer intends to, comply with one it has given.
The Panel Bulletins are a new form of guidance to remind people how specific provisions of the Takeover Code operate and are published in response to issues the Panel has identified (see our blog post here for information on the first two Bulletins on meetings with shareholders and management buy-outs).
In its latest Bulletin, the Panel Executive says that it is aware of a number of cases recently where a shareholder which had given a letter of intent (to accept an offer or to vote in favour of a scheme) then sold the underlying shares without a prompt announcement being made, by either the shareholder or the bidder (as required by Rule 2.10 of the Code).
The Bulletin contains reminders that:
- shareholders must, if they become unable, or no longer intend, to comply with the terms of an irrevocable commitment or letter of intent (either in whole or in part), promptly either make an announcement or notify the relevant party to the offer and the Panel; and
- bidders and targets must make a prompt announcement if they receive a notification from a giver of an irrevocable commitment or letter of intent that the person will no longer comply with it.
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