Takeover Panel Consultation - Companies to which the Takeover Code Applies

Earlier this year the Takeover Panel released a consultation paper looking at narrowing the scope of companies to which the Code would apply in the future. The consultation period is still open and closes at the end of July 2024.

The consultation states that broadly speaking, the intention is to refocus “the application of the Code on companies which are registered and listed (or were recently listed) in the UK”.‍

For some companies, this may be welcome news as the significant reduction in applicability of the Code will mean many companies are no longer subject to it. Owners of unlisted PLCs. and private companies that have not been UK-listed in the previous three years can breathe a sigh of relief as the Code will cease to apply to those businesses following the proposed changes to the code.

A more detailed review shows that a narrowing of the scope would see the Code apply to companies which have their registered office in the UK, the Channel Islands or the Isle of Man and which:

1. Are listed on a UK regulated market, a UK multilateral trading facility or a stock exchange in the Channel Islands or the Isle of Man; or
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2. Were listed on a UK regulated market, a UK multilateral trading facility or a stock exchange in the Channel Islands or the Isle of Man in the three years prior to the relevant date. (The relevant date being the date of the announcement of an offer or possible offer, or other event which has significance under the Code.

If your company falls into any of the following categories, under the current consultation, it is proposed that the Code will no longer apply:

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• A public or private UK-listed company more than three years prior to the relevant date;
• A public or private company whose securities are, or were previously, traded solely on an overseas market;
• a company whose securities are, or were previously, traded using a “matched bargain facility”;
• any other unlisted public company;
• or a private company which filed a prospectus at any time during the 10 years prior to the relevant date.

As with any changes of this nature, it will be necessary for there to be a transitional phase following adoption of any changes and as it stands, the proposal is that there will be a three year transition period giving companies sufficient time to put measures in place to ensure they fall in line with the new approach.

Full details of the consultation are available here.

If you have any questions relating to these changes and the impact they could have on your company, such as changes to your articles of association or impact on investor shareholders, or if you would like general corporate advisory support, please reach out to Jamie Lasaki here.

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