Office of Public Sector Information
PART 28 continued CHAPTER 1 continued
(1) The Financial Services and Markets Act 2000 (c. 8) is amended as follows.
(2) Section 143 (power to make rules endorsing the City Code on Takeovers and Mergers etc) is repealed.
(3) In section 144 (power to make price stabilising rules), for subsection (7) substitute—
“(7) “Consultation procedures” means procedures designed to provide an opportunity for persons likely to be affected by alterations to those provisions to make representations about proposed alterations to any of those provisions.”.
(4) In section 349 (exceptions from restrictions on disclosure of confidential information), after subsection (3) insert—
“(3A) Section 348 does not apply to—
(a) the disclosure by a recipient to which subsection (3B) applies of confidential information disclosed to it by the Authority in reliance on subsection (1);
(b) the disclosure of such information by a person obtaining it directly or indirectly from a recipient to which subsection (3B) applies.
(3B) This subsection applies to—
(a) the Panel on Takeovers and Mergers;
(b) an authority designated as a supervisory authority for the purposes of Article 4.1 of the Takeovers Directive;
(c) any other person or body that exercises public functions, under legislation in an EEA State other than the United Kingdom, that are similar to the Authority’s functions or those of the Panel on Takeovers and Mergers.”.
(5) In section 354 (Financial Services Authority’s duty to co-operate with others), after subsection (1) insert—
“(1A) The Authority must take such steps as it considers appropriate to co-operate with—
(a) the Panel on Takeovers and Mergers;
(b) an authority designated as a supervisory authority for the purposes of Article 4.1 of the Takeovers Directive;
(c) any other person or body that exercises functions of a public nature, under legislation in any country or territory outside the United Kingdom, that appear to the Authority to be similar to those of the Panel on Takeovers and Mergers.”.
(6) In section 417(1) (definitions), insert at the appropriate place—
““Takeovers Directive” means Directive 2004/25/EC of the European Parliament and of the Council;”.
Her Majesty may by Order in Council direct that any of the provisions of this Chapter extend, with such modifications as may be specified in the Order, to the Isle of Man or any of the Channel Islands.
(1) A company may by special resolution (an “opting-in resolution”) opt in for the purposes of this Chapter if the following three conditions are met in relation to the company.
(2) The first condition is that the company has voting shares admitted to trading on a regulated market.
(3) The second condition is that—
(a) the company’s articles of association—
(i) do not contain any such restrictions as are mentioned in Article 11 of the Takeovers Directive, or
(ii) if they do contain any such restrictions, provide for the restrictions not to apply at a time when, or in circumstances in which, they would be disapplied by that Article,
and
(b) those articles do not contain any other provision which would be incompatible with that Article.
(4) The third condition is that—
(a) no shares conferring special rights in the company are held by—
(i) a minister,
(ii) a nominee of, or any other person acting on behalf of, a minister, or
(iii) a company directly or indirectly controlled by a minister,
and
(b) no such rights are exercisable by or on behalf of a minister under any enactment.
(5) A company may revoke an opting-in resolution by a further special resolution (an “opting-out resolution”).
(6) For the purposes of subsection (3), a reference in Article 11 of the Takeovers Directive to Article 7.1 or 9 of that Directive is to be read as referring to rules under section 943(1) giving effect to the relevant Article.
(7) In subsection (4) “minister” means—
(a) the holder of an office in Her Majesty’s Government in the United Kingdom;
(b) the Scottish Ministers;
(c) a Minister within the meaning given by section 7(3) of the Northern Ireland Act 1998 (c. 47);
and for the purposes of that subsection “minister” also includes the Treasury, the Board of Trade, the Defence Council and the National Assembly for Wales.
(8) The Secretary of State may by order subject to negative resolution procedure provide that subsection (4) applies in relation to a specified person or body that exercises functions of a public nature as it applies in relation to a minister.
“Specified” means specified in the order.
(1) An opting-in resolution or an opting-out resolution must specify the date from which it is to have effect (the “effective date”).
(2) The effective date of an opting-in resolution may not be earlier than the date on which the resolution is passed.
(3) The second and third conditions in section 966 must be met at the time when an opting-in resolution is passed, but the first one does not need to be met until the effective date.
(4) An opting-in resolution passed before the time when voting shares of the company are admitted to trading on a regulated market complies with the requirement in subsection (1) if, instead of specifying a particular date, it provides for the resolution to have effect from that time.
(5) An opting-in resolution passed before the commencement of this section complies with the requirement in subsection (1) if, instead of specifying a particular date, it provides for the resolution to have effect from that commencement.
(6) The effective date of an opting-out resolution may not be earlier than the first anniversary of the date on which a copy of the opting-in resolution was forwarded to the registrar.
(7) Where a company has passed an opting-in resolution, any alteration of its articles of association that would prevent the second condition in section 966 from being met is of no effect until the effective date of an opting-out resolution passed by the company.
(1) The following provisions have effect where a takeover bid is made for an opted-in company.
(2) An agreement to which this section applies is invalid in so far as it places any restriction—
(a) on the transfer to the offeror, or at his direction to another person, of shares in the company during the offer period;
(b) on the transfer to any person of shares in the company at a time during the offer period when the offeror holds shares amounting to not less than 75% in value of all the voting shares in the company;
(c) on rights to vote at a general meeting of the company that decides whether to take any action which might result in the frustration of the bid;
(d) on rights to vote at a general meeting of the company that—
(i) is the first such meeting to be held after the end of the offer period, and
(ii) is held at a time when the offeror holds shares amounting to not less than 75% in value of all the voting shares in the company.
(3) This section applies to an agreement—
(a) entered into between a person holding shares in the company and another such person on or after 21st April 2004, or
(b) entered into at any time between such a person and the company,
and it applies to such an agreement even if the law applicable to the agreement (apart from this section) is not the law of a part of the United Kingdom.
(4) The reference in subsection (2)(c) to rights to vote at a general meeting of the company that decides whether to take any action which might result in the frustration of the bid includes a reference to rights to vote on a written resolution concerned with that question.
(5) For the purposes of subsection (2)(c), action which might result in the frustration of a bid is any action of that kind specified in rules under section 943(1) giving effect to Article 9 of the Takeovers Directive.
(6) If a person suffers loss as a result of any act or omission that would (but for this section) be a breach of an agreement to which this section applies, he is entitled to compensation, of such amount as the court considers just and equitable, from any person who would (but for this section) be liable to him for committing or inducing the breach.
(7) In subsection (6) “the court” means the High Court or, in Scotland, the Court of Session.
(8) A reference in this section to voting shares in the company does not include—
(a) debentures, or
(b) shares that, under the company’s articles of association, do not normally carry rights to vote at its general meetings (for example, shares carrying rights to vote that, under those articles, arise only where specified pecuniary advantages are not provided).
(1) Where a takeover bid is made for an opted-in company, the offeror may by making a request to the directors of the company require them to call a general meeting of the company if, at the date at which the request is made, he holds shares amounting to not less than 75% in value of all the voting shares in the company.
(2) The reference in subsection (1) to voting shares in the company does not include—
(a) debentures, or
(b) shares that, under the company’s articles of association, do not normally carry rights to vote at its general meetings (for example, shares carrying rights to vote that, under those articles, arise only where specified pecuniary advantages are not provided).
(3) Sections 303 to 305 (members' power to require general meetings to be called) apply as they would do if subsection (1) above were substituted for subsections (1) to (3) of section 303, and with any other necessary modifications.
(1) A company that has passed an opting-in resolution or an opting-out resolution must notify—
(a) the Panel, and
(b) where the company—
(i) has voting shares admitted to trading on a regulated market in an EEA State other than the United Kingdom, or
(ii) has requested such admission,
the authority designated by that state as the supervisory authority for the purposes of Article 4.1 of the Takeovers Directive.
(2) Notification must be given within 15 days after the resolution is passed and, if any admission or request such as is mentioned in subsection (1)(b) occurs at a later time, within 15 days after that time.
(3) If a company fails to comply with this section, an offence is committed by—
(a) the company, and
(b) every officer of it who is in default.
(4) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
(1) In this Chapter—
“offeror” and “takeover bid” have the same meaning as in the Takeovers Directive;
“offer period”, in relation to a takeover bid, means the time allowed for acceptance of the bid by—
rules under section 943(1) giving effect to Article 7.1 of the Takeovers Directive, or
where the rules giving effect to that Article which apply to the bid are those of an EEA State other than the United Kingdom, those rules;
“opted-in company” means a company in relation to which—
an opting-in resolution has effect, and
the conditions in section 966(2) and (4) continue to be met;
“opting-in resolution” has the meaning given by section 966(1);
“opting-out resolution” has the meaning given by section 966(5);
“the Takeovers Directive” means Directive 2004/25/EC of the European Parliament and of the Council;
“voting rights” means rights to vote at general meetings of the company in question, including rights that arise only in certain circumstances;
“voting shares” means shares carrying voting rights.
(2) For the purposes of this Chapter—
(a) securities of a company are treated as shares in the company if they are convertible into or entitle the holder to subscribe for such shares;
(b) debentures issued by a company are treated as shares in the company if they carry voting rights.
(1) Where a takeover bid is made for an opted-in company, section 368 of the Companies Act 1985 (c. 6) (extraordinary general meeting on members' requisition) and section 378 of that Act (extraordinary and special resolutions) have effect as follows until their repeal by this Act.
(2) Section 368 has effect as if a members' requisition included a requisition of a person who—
(a) is the offeror in relation to the takeover bid, and
(b) holds at the date of the deposit of the requisition shares amounting to not less than 75% in value of all the voting shares in the company.
(3) In relation to a general meeting of the company that—
(a) is the first such meeting to be held after the end of the offer period, and
(b) is held at a time when the offeror holds shares amounting to not less than 75% in value of all the voting shares in the company,
section 378(2) (meaning of “special resolution”) has effect as if “14 days' notice” were substituted for “21 days' notice”.
(4) A reference in this section to voting shares in the company does not include—
(a) debentures, or
(b) shares that, under the company’s articles of association, do not normally carry rights to vote at its general meetings (for example, shares carrying rights to vote that, under those articles, arise only where specified pecuniary advantages are not provided).
Her Majesty may by Order in Council direct that any of the provisions of this Chapter extend, with such modifications as may be specified in the Order, to the Isle of Man or any of the Channel Islands.
(1) For the purposes of this Chapter an offer to acquire shares in a company is a “takeover offer” if the following two conditions are satisfied in relation to the offer.
(2) The first condition is that it is an offer to acquire—
(a) all the shares in a company, or
(b) where there is more than one class of shares in a company, all the shares of one or more classes,
other than shares that at the date of the offer are already held by the offeror.
Section 975 contains provision supplementing this subsection.
(3) The second condition is that the terms of the offer are the same—
(a) in relation to all the shares to which the offer relates, or
(b) where the shares to which the offer relates include shares of different classes, in relation to all the shares of each class.
Section 976 contains provision treating this condition as satisfied in certain circumstances.
(4) In subsections (1) to (3) “shares” means shares, other than relevant treasury shares, that have been allotted on the date of the offer (but see subsection (5)).
(5) A takeover offer may include among the shares to which it relates—
(a) all or any shares that are allotted after the date of the offer but before a specified date;
(b) all or any relevant treasury shares that cease to be held as treasury shares before a specified date;
(c) all or any other relevant treasury shares.
(6) In this section—
“relevant treasury shares” means shares that—
are held by the company as treasury shares on the date of the offer, or
become shares held by the company as treasury shares after that date but before a specified date;
“specified date” means a date specified in or determined in accordance with the terms of the offer.
(7) Where the terms of an offer make provision for their revision and for acceptances on the previous terms to be treated as acceptances on the revised terms, then, if the terms of the offer are revised in accordance with that provision—
(a) the revision is not to be regarded for the purposes of this Chapter as the making of a fresh offer, and
(b) references in this Chapter to the date of the offer are accordingly to be read as references to the date of the original offer.
(1) The reference in section 974(2) to shares already held by the offeror includes a reference to shares that he has contracted to acquire, whether unconditionally or subject to conditions being met.
This is subject to subsection (2).
(2) The reference in section 974(2) to shares already held by the offeror does not include a reference to shares that are the subject of a contract—
(a) intended to secure that the holder of the shares will accept the offer when it is made, and
(b) entered into—
(i) by deed and for no consideration,
(ii) for consideration of negligible value, or
(iii) for consideration consisting of a promise by the offeror to make the offer.
(3) In relation to Scotland, this section applies as if the words “by deed and” in subsection (2)(b)(i) were omitted.
(4) The condition in section 974(2) is treated as satisfied where—
(a) the offer does not extend to shares that associates of the offeror hold or have contracted to acquire (whether unconditionally or subject to conditions being met), and
(b) the condition would be satisfied if the offer did extend to those shares.
(For further provision about such shares, see section 977(2)).
(1) The condition in section 974(3) (terms of offer to be the same for all shares or all shares of particular classes) is treated as satisfied where subsection (2) or (3) below applies.
(2) This subsection applies where—
(a) shares carry an entitlement to a particular dividend which other shares of the same class, by reason of being allotted later, do not carry,
(b) there is a difference in the value of consideration offered for the shares allotted earlier as against that offered for those allotted later,
(c) that difference merely reflects the difference in entitlement to the dividend, and
(d) the condition in section 974(3) would be satisfied but for that difference.
(3) This subsection applies where—
(a) the law of a country or territory outside the United Kingdom—
(i) precludes an offer of consideration in the form, or any of the forms, specified in the terms of the offer (“the specified form”), or
(ii) precludes it except after compliance by the offeror with conditions with which he is unable to comply or which he regards as unduly onerous,
(b) the persons to whom an offer of consideration in the specified form is precluded are able to receive consideration in another form that is of substantially equivalent value, and
(c) the condition in section 974(3) would be satisfied but for the fact that an offer of consideration in the specified form to those persons is precluded.
(1) Where a takeover offer is made and, during the period beginning with the date of the offer and ending when the offer can no longer be accepted, the offeror—
(a) acquires or unconditionally contracts to acquire any of the shares to which the offer relates, but
(b) does not do so by virtue of acceptances of the offer,
those shares are treated for the purposes of this Chapter as excluded from those to which the offer relates.
(2) For the purposes of this Chapter shares that an associate of the offeror holds or has contracted to acquire, whether at the date of the offer or subsequently, are not treated as shares to which the offer relates, even if the offer extends to such shares.
In this subsection “contracted” means contracted unconditionally or subject to conditions being met.
(3) This section is subject to section 979(8) and (9).
(1) Where there are holders of shares in a company to whom an offer to acquire shares in the company is not communicated, that does not prevent the offer from being a takeover offer for the purposes of this Chapter if—
(a) those shareholders have no registered address in the United Kingdom,
(b) the offer was not communicated to those shareholders in order not to contravene the law of a country or territory outside the United Kingdom, and
(c) either—
(i) the offer is published in the Gazette, or
(ii) the offer can be inspected, or a copy of it obtained, at a place in an EEA State or on a website, and a notice is published in the Gazette specifying the address of that place or website.
(2) Where an offer is made to acquire shares in a company and there are persons for whom, by reason of the law of a country or territory outside the United Kingdom, it is impossible to accept the offer, or more difficult to do so, that does not prevent the offer from being a takeover offer for the purposes of this Chapter.
(3) It is not to be inferred—
(a) that an offer which is not communicated to every holder of shares in the company cannot be a takeover offer for the purposes of this Chapter unless the requirements of paragraphs (a) to (c) of subsection (1) are met, or
(b) that an offer which is impossible, or more difficult, for certain persons to accept cannot be a takeover offer for those purposes unless the reason for the impossibility or difficulty is the one mentioned in subsection (2).
(1) Subsection (2) applies in a case where a takeover offer does not relate to shares of different classes.
(2) If the offeror has, by virtue of acceptances of the offer, acquired or unconditionally contracted to acquire—
(a) not less than 90% in value of the shares to which the offer relates, and
(b) in a case where the shares to which the offer relates are voting shares, not less than 90% of the voting rights carried by those shares,
he may give notice to the holder of any shares to which the offer relates which the offeror has not acquired or unconditionally contracted to acquire that he desires to acquire those shares.
(3) Subsection (4) applies in a case where a takeover offer relates to shares of different classes.
(4) If the offeror has, by virtue of acceptances of the offer, acquired or unconditionally contracted to acquire—
(a) not less than 90% in value of the shares of any class to which the offer relates, and
(b) in a case where the shares of that class are voting shares, not less than 90% of the voting rights carried by those shares,
he may give notice to the holder of any shares of that class to which the offer relates which the offeror has not acquired or unconditionally contracted to acquire that he desires to acquire those shares.
(5) In the case of a takeover offer which includes among the shares to which it relates—
(a) shares that are allotted after the date of the offer, or
(b) relevant treasury shares (within the meaning of section 974) that cease to be held as treasury shares after the date of the offer,
the offeror’s entitlement to give a notice under subsection (2) or (4) on any particular date shall be determined as if the shares to which the offer relates did not include any allotted, or ceasing to be held as treasury shares, on or after that date.
(6) Subsection (7) applies where—
(a) the requirements for the giving of a notice under subsection (2) or (4) are satisfied, and
(b) there are shares in the company which the offeror, or an associate of his, has contracted to acquire subject to conditions being met, and in relation to which the contract has not become unconditional.
(7) The offeror’s entitlement to give a notice under subsection (2) or (4) shall be determined as if—
(a) the shares to which the offer relates included shares falling within paragraph (b) of subsection (6), and
(b) in relation to shares falling within that paragraph, the words “by virtue of acceptances of the offer” in subsection (2) or (4) were omitted.
(8) Where—
(a) a takeover offer is made,
(b) during the period beginning with the date of the offer and ending when the offer can no longer be accepted, the offeror—
(i) acquires or unconditionally contracts to acquire any of the shares to which the offer relates, but
(ii) does not do so by virtue of acceptances of the offer, and
(c) subsection (10) applies,
then for the purposes of this section those shares are not excluded by section 977(1) from those to which the offer relates, and the offeror is treated as having acquired or contracted to acquire them by virtue of acceptances of the offer.
(9) Where—
(a) a takeover offer is made,
(b) during the period beginning with the date of the offer and ending when the offer can no longer be accepted, an associate of the offeror acquires or unconditionally contracts to acquire any of the shares to which the offer relates, and
(c) subsection (10) applies,
then for the purposes of this section those shares are not excluded by section 977(2) from those to which the offer relates.
(10) This subsection applies if—
(a) at the time the shares are acquired or contracted to be acquired as mentioned in subsection (8) or (9) (as the case may be), the value of the consideration for which they are acquired or contracted to be acquired (“the acquisition consideration”) does not exceed the value of the consideration specified in the terms of the offer, or
(b) those terms are subsequently revised so that when the revision is announced the value of the acquisition consideration, at the time mentioned in paragraph (a), no longer exceeds the value of the consideration specified in those terms.
(1) A notice under section 979 must be given in the prescribed manner.
(2) No notice may be given under section 979(2) or (4) after the end of—
(a) the period of three months beginning with the day after the last day on which the offer can be accepted, or
(b) the period of six months beginning with the date of the offer, where that period ends earlier and the offer is one to which subsection (3) below applies.
(3) This subsection applies to an offer if the time allowed for acceptance of the offer is not governed by rules under section 943(1) that give effect to Article 7 of the Takeovers Directive.
In this subsection “the Takeovers Directive” has the same meaning as in section 943.
(4) At the time when the offeror first gives a notice under section 979 in relation to an offer, he must send to the company—
(a) a copy of the notice, and
(b) a statutory declaration by him in the prescribed form, stating that the conditions for the giving of the notice are satisfied.
(5) Where the offeror is a company (whether or not a company within the meaning of this Act) the statutory declaration must be signed by a director.
(6) A person commits an offence if—
(a) he fails to send a copy of a notice or a statutory declaration as required by subsection (4), or
(b) he makes such a declaration for the purposes of that subsection knowing it to be false or without having reasonable grounds for believing it to be true.
(7) It is a defence for a person charged with an offence for failing to send a copy of a notice as required by subsection (4) to prove that he took reasonable steps for securing compliance with that subsection.
(8) A person guilty of an offence under this section is liable—
(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);
(b) on summary conviction—
(i) in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both) and, for continued contravention, a daily default fine not exceeding one-fiftieth of the statutory maximum;
(ii) in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both) and, for continued contravention, a daily default fine not exceeding one-fiftieth of the statutory maximum.
Companies Act 2006