UK Takeover Panel Addresses Potential Friction Points on UK Takeovers: Revised Practice Statement 31 and Consultation on Code Scope

In a move aimed at streamlining UK takeover processes, the UK Takeover Panel has made significant changes to Practice Statement 31 (PS 31) and initiated a consultation process to narrow the range of companies within the scope of the Code.

The revisions to PS 31 offer greater flexibility to companies considering private sale processes and provide additional guidance for companies navigating formal sale processes and strategic reviews. One of the key aspects of the amended PS 31 is the dispensation granted by the Panel from naming potential bidders in private sale processes, allowing companies to explore strategic options without the constraints of formal processes.

The Panel’s acknowledgment of the reluctance of many boards to initiate formal sale processes and the dispensation from Rule 2.4 in the context of private sale processes will be welcomed by companies seeking strategic alternatives. This move provides clarity and flexibility for companies and their advisers, ensuring a smoother process for potential bidders and target companies.

Additionally, the consultation on the scope of the Takeover Code aims to address the inadvertent inclusion of certain companies within the Code, leading to added costs and confusion for target companies. By clarifying and narrowing the scope of the Code, the Panel seeks to streamline the takeover process and reduce unnecessary burdens on companies not originally intended to fall within its scope.

Overall, these thoughtful moves by the UK Takeover Panel demonstrate a commitment to improving the efficiency and clarity of UK takeover processes, benefiting both companies and investors. Subscribe to Ropes & Gray Viewpoints for more insights on this topic.