Takeover Code (Advanced)

Course Overview:

This course covers key rules in the Takeover Code and the bid strategies and tactics that are used in the current marketplace.

The update to the Code in September 2011 has changed the tactical advantage that possible bidders have had in takeovers and the course considers the numerous effects this has had on bidder and target strategies. 

Participants will learn how takeovers are conducted from the initial stages to the completion or lapsing of the bid and will gain an understanding of which strategies and tactics have and which have not worked, with examples from many recent deals.

Course Content:

The Takeover Code: Conduct of Offer

• The UK takeover framework
• Legal, UKLA and Code provisions

Key rules for the conduct of public bids

• Announcements
• When possible/firm offer announcements are required
• Advisers’ responsibilities for announcements
• What is an untoward share price movement?
• Disclosures following announcements
• Naming and Put Up or Shut Up
• Contents of firm offer
  • Conditions/pre-conditions
  • When can they be subjective?
  • When can they be invoked?
  • What pre-conditions are possible in firm offer announcements?
• Minimum consideration following market purchases
• Restrictions
• No special deals
• Management incentivisation in PTPs
• Frustrating actions and exceptions
  • Squeeze out requirements
  • Overview of recent changes to rules
  • Types of takeover
  • Offer statistics
  • Contractual offer timetable
  • How hostile offers are played out
  • Timetables in competitive situations
  • Development of Schemes of Arrangement
  • The rules for Schemes and timetable
  • Mandatory offer and whitewash requirements and uses
  • Partial and tender offers – rules and when they are useful

Public Takeovers: Strategies and Tactics

• Changes in marketplace which have affected takeovers

Bidder Strategies and Tactics

Buying share stakes in Target

• Advantages of buying share stakes before and during bid
• Risks of buying stakes
• Restrictions on stake-buying and regulatory requirements
• Methods of acquiring stakes
• Is it worth holding a large minority stake?

Irrevocable undertakings

• Advantages of holding irrevocables
• Attitude of shareholders
• Hard and soft irrevocables
• Non-binding letters of intent

Impact of Code changes

• Return to traditional bid approach?
• Effect of 28 day PUSU and naming
• Work which needs to be done before approach
• Friendly negotiations or hostile offer?
• Possible offers and bear hugs

Timing considerations of firm offer announcements and bid

• Issues if US shareholders are present

Structure: Scheme of Arrangements or Offer

• Advantages and disadvantages compared to contractual offer
• Examples of Schemes/offers meeting shareholder opposition
• Examples of Schemes in competitive situations

Cash or share offer?

• Advantages/disadvantages of cash and shares
• Different mixes of consideration
• Cash alternative structures
• Other financing structures
• Means of using foreign shares

Care with statements

• Price and other future actions

Concluding the offer

• When to increase offer
• Are no increase / no extension statements useful?

Target Strategies and Tactics

• Basic arguments for defence
• Directors and advisers’ responsibilities in accepting/rejecting an offer
• Measures before a bid
• Keeping close to market
• Identification of stakes
• Position of pension fund

Negotiate, open books or make possible offer announcement?

• Effects of a possible offer announcement and timing
• Advantages of an auction
• When should Target refuse to talk?
• When to open up books?

Forecasts and undertakings

• Profit/dividend forecasts
• Restructuring and valuations
• Share buy-backs and special dividends

What works best?

• Pleadings
• Anti-trust
• White knight/squire
• Bolster the board
• “Get them before they get you”

Both Sides’ Strategies and Tactics

• Conflicts of interest
• Examining documents/statements
• Financial and managerial arguments
• Direct approach to shareholders/analysts

“Very knowledgeable instructor, good use of examples”

Delivering this course in-house for you to a number of participants could be very cost effective. Please call us on 020 7387 4484 to discuss this further.

If you have any questions about this seminar please write to us at post@redcliffetraining.co.uk.