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Changes in UK Takeover Code Come into Force

26 September 2013

LONDON, 26 September 2013 - On Monday 30 September key changes to the Takeover Code come into effect. These include revised rules concerning information disclosure, profit forecasts, and quantified financial benefits statements (QFBSs); and also an extension to the jurisdiction of the Panel.

Commenting on the changes Hogan Lovells' corporate partner Richard Ufland said:

"The revised Rules adopt a more proportionate set of provisions than at present, and provide a more logical framework for the regulation of profit forecasts and QFBSs. In addition, the changes introduce a sensible amendment to the scope of the jurisdiction of the Panel".

The changes were announced on 15 May and 24 July 2013 by the Takeover Panel in its response to public consultation papers issued last year. The key changes are that Rule 27 (documents subsequently published) and Rule 28 (profit forecasts) have been substantively re-written, and the scope of the Code extended:

Rule 27

Under the new Rule 27, there is a positive obligation on a party to an offer to announce material changes in information and not wait until a subsequent document is published.

Rule 28

Rule 28 contains completely re-written provisions in respect of profit forecasts and QFBSs. These are now more consistent with legislation and guidance and adopt a more proportionate approach.

Extended scope of the Code

The new rules also extend the application of the Code to companies not previously covered by it. In particular, the residency test will no longer apply to offers for companies which have their registered offices in the UK, the Channel Islands or the Isle of Man and which have securities admitted to trading on a multilateral trading facility (such as AIM or the ISDX Growth Market) in the UK. The residency test will still apply, though, to UK, Channel Islands or Isle of Man companies with securities admitted to trading solely on an overseas market.

 
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