The Takeover Panel has published its response statement (RS 2020/1) setting out changes to the Takeover Code relating to the conditions to an offer, particularly those relating to regulatory / merger control clearance, and to the offer timetable.

The rule changes will come into force on 5 July 2021 and will apply to all firm offers which are announced (Rule 2.7 announcement) on or after that date. 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 existing rules.

The key changes are:

  • Conditions relating to clearance by the European Commission and CMA – The Takeover Code will no longer distinguish between EC/CMA conditions and other merger control clearance conditions, and a bidder will only be able to invoke a condition to an offer relating to merger control clearance in the EU and UK if the circumstances on which it is seeking to rely are material in the context of the offer (as is already the case for merger control conditions in jurisdictions outside the EU/UK);
  • Offer timetable –There will be a number of changes to the offer timetable, including a requirement that all conditions to an offer must be satisfied by Day 60 (rather than Day 81), but there will be a greater ability to freeze the offer timetable if there is an outstanding official authorisation or regulatory clearance.
  • Long-stop date – A contractual offer will have a long stop date, that is a date on which a bidder can seek to lapse an offer if not all the conditions are satisfied. In contrast to the long-stop date on a scheme, it is not an absolute walk right, but a bidder should have the expectation of normally being able to obtain consent from the Panel to lapse its offer where there is a material regulatory issue as at the long-stop date.
  • Guidance on when a condition can be invoked – Panel Practice Statement No. 5 will be updated to set out additional guidance on the factors that will be taken into account in deciding whether a bidder should be able to invoke a condition, in particular where the condition relates to an official authorisation or regulatory clearance.

Further information on the rule changes can be found in our public M&A e-bulletin.

Mark Bardell
Mark Bardell
+44 20 7466 2575

Antonia Kirkby
Antonia Kirkby
+44 20 7466 2700

Robert Moore
Robert Moore
+44 20 7466 2918