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The Takeover Panel and City Code

Introduction. The Panel and the CodeStatutory statusStructure of the PanelStructure of the CodePowers of the PanelTo whom does the Code apply?RulesCode Timetable. The Panel and the Code. Panel administers and enforces City Code on Takeovers and MergersAims

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The Takeover Panel and City Code

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    1. The Takeover Panel and City Code

    2. Introduction The Panel and the Code Statutory status Structure of the Panel Structure of the Code Powers of the Panel To whom does the Code apply? Rules Code Timetable

    3. The Panel and the Code Panel administers and enforces City Code on Takeovers and Mergers Aims – Code is not concerned with financial or commercial advantages or disadvantages History – Code introduced in 1968 The Code provides Fair and equal treatment for shareholders An orderly framework for the conduct of takeovers

    4. Statutory Status Pre-20 May 2006: Panel was non-statutory body 20 May 2006 – 06 April 2007: Panel and Code had statutory status for some offers Since 06 April 2007: Panel and Code have statutory status for all offers subject to the Code (under Part 28 Companies Act 2006) Co-operation with other bodies and access to information Support of the courts Enforcement

    5. Structure of the Panel The Panel – overall responsibility for policy, financing and administration The Executive – day to day work and general administration of the Code The Hearings Committee – first tier of appeals process The Takeover Appeal Board – second tier of appeal process (limited cases) The Code Committee – rule-making functions

    6. Structure of the Code 6 General Principles (good standards of commercial behaviour) 38 Rules Purposive interpretation – their spirit must be observed, as well as their letter

    7. Powers of the Panel Historically, high degree of support with compliance strong Panel can Require documents and information Require a party to restrain from acting Require payment of compensation Enforce breach of Code through Court Require a party to take specified further action Hearings Committee can Private statement of censure Public statement of censure Suspend or withdraw exemption/approval/special status Report conduct Cold shouldering

    8. To whom does the Code apply? Nature of the offeree (target) company Applies to a company: Which has its registered office in the UK, the Channel Islands or the Isle of Man and has its securities admitted to trading on a regulated market in the UK (ie the Official List and virt-X but not on AIM) or on a stock exchange in the Channel Islands or the Isle of Man (i) Which has its registered office in the UK but its securities are admitted to trading on a regulated market in another Member State; or (ii) which has its registered office in another Member State and its securities admitted to trading only on a regulated market in the UK or on a regulated market in one or more Member States, including the UK. But, in these cases, the Panel will share jurisdiction with the relevant regulator in another Member State Which does not fall into the two paragraphs above and which satisfies the residency text (ie it is incorporated in, and has its central place of management and control in, the UK, the Channel Islands or the Isle of Man) Private companies included in limited circumstances Control – an interest or interests in shares carrying 30% of more of the voting rights of the company

    9. Who is effected? All those involved in an offer governed by the Code “Concert parties” – ensure all potential concert parties are identified

    10. Key propositions of the Code Rules Equal treatment for all shareholders Adequate and timely advice and information No false markets No unapproved frustrating actions

    11. Equal treatment for all shareholders General Principle 1 – equivalent treatment Rule 16 – no special deals/management incentivisation Rules 6 and 11 – quantum and type of consideration Rule 9 – mandatory offer

    12. Adequate and timely advice and information Rule 3 – independent advice Accuracy of documents Disclosure of information Rules 24/25 – contents of documents Rules 28/29 – forecasts and valuations Rules 30/24 - timetable

    13. No false markets/unauthorised frustrating action No false markets General Principle 4 – no creation of false markets Rule 2 – timing and contents of announcements Rule 8 – disclosure of dealings and positions Rule 20 – equality of information Rule 21 – Restrictions on frustrating action

    14. Code Timetable Offerees should not be put under siege for an unlimited amount of time Final Day Rule

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