chapter  24
10 Pages

Takeovers, reconstructions and amalgamations

Furthermore, s 953 provides that it is an offence for failure to comply with rules about bid documentation within this section, and s 954 provides that rules may confer power on the Panel to order a person to pay such compensation as it thinks just and reasonable if he is in breach of a rule, the effect of which is to require the payment of money. Section 955 provides for enforcement by the court on the application of the Panel, if the court is satisfied there is a reasonable likelihood that a person will contravene a rule of the Panel or contravene an order requiring disclosure of information or documents under s 947. It is further provided, however, by s 956 that contravention of a rule or disclosure requirement does not give rise to any right of action for breach of statutory duty. Provision is made in ss 957-959 for funding the Panel’s activities. A prime change in the law relates to the scope of the Code’s jurisdiction. Previously the Code’s jurisdiction limited the Panel’s ability to act in relation to takeover bids, but now the jurisdiction has been extended to cover all takeover bids within the Takeover Directive where there is a United Kingdom element in terms of registered office or where the securities of the company are traded on a UKregulated market. Sometimes there will be shared jurisdiction as to where the registered office is in the United Kingdom but the regulated market is in a different EEA member state. If the target company has its registered office in the United Kingdom, the Isle of Man or the Channel Islands, and its securities are regulated on a UK-regulated market or on any stock exchange in the Isle of Man or the Channel Islands, then the Code applies to that company, whether or not the main place of management is within the United Kingdom, the Isle of Man or the Channel Islands. The law in applying the provisions to the Isle of Man and the Channel Islands goes beyond the scope of the Directive, which does not require this (s 965 CA 2006). Other companies are also within the jurisdiction if the registered office and the main place of management is within the United Kingdom but the securities are admitted to trading on a regulated market elsewhere within the EEA, then the companies are subject to the jurisdiction of the Panel within the Code. In certain cases there is shared jurisdiction as where the target company has its registered office in an EEA state and securities are admitted to trading on a regulated market in another EEA Member State and the UK is one of those states in one or the other situation. If there is shared jurisdiction then only part of the Code applies, dependent on whether it is a matter of the company’s registered office being within the UK or the company’s securities being traded in the UK. If there is shared jurisdiction then, in those cases, the Code would only cover takeover bids within the meaning of the Directive. If, however, the jurisdiction is not shared then the Code will continue to regulate transactions that were previously covered. These are takeover bids and mergers, together with other transactions where the objective is obtaining or consolidating control as well as partial (and tender) offers. However, it would only regulate these additional transactions if the company is a UK, Isle of Man or Channel Islands company, or it is the type of public or private company that it regulated previously.