Principles of Takeover Regulation

Description

Providing a clear and comprehensive exposition of takeover law in the UK, this book analyses the principles behind the Takeover Code, explaining the origin, effect, and operation of the rules and regulation with reference to practice and theory. Set in an economic context, the book includes coverage of the jurisprudence of the Takeover Panel, and includes comparative coverage of relevant aspects of US takeover law. This book offers an in-depth understanding of takeover regulation while also providing a degree of context and background to make sense of the regulation. A thoughtful explanation of takeover law with a unique comparative element, this is a valuable resource for the field of takeover law. Cover PRINCIPLES OF TAKEOVER REGULATION Copyright For Marlies PREFACE ACKNOWLEDGEMENTS SUMMARY CONTENTS DETAILED CONTENTS TABLE OF CASES TABLE OF LEGISLATION I. The Market for Corporate Control: Value, Stakeholders, and Governance A. Introduction B. Creating, Destroying, and Distributing Value Through Takeovers 1. Value creation and destruction in theory 2. Value creation and destruction in practice: The empirical evid C. Stakeholders: Distributional and Behavioural Effects D. Indirect Effects: Corporate Control as a Governance Mechanism 1. The theoretical case 2. The empirical evidence E. Indirect Effects: Business Decision Making and the Example of Short-termism II. Deal Structures A. Asset Sales 1. The nature of an asset sale 2. The asset sale agreement 3. Corporate approvals and the enforceability of the agreement B. Share Sales 1. The nature of share sale and the contractual offer 2. The terms of the agreement between bidder and shareholder 3. Approvals C. Schemes of Arrangement and Mergers 1. The nature of a scheme of arrangement 2. Who may propose a scheme of arrangement? 3. What transactions fall within the terms ‘compromise’ and ‘arrangement’? 4. Scheme process 5. Reconstructions and amalgamations 6. Public company ‘mergers’ D. Cross-Border Mergers III. Origins: The Creation of the Takeover Code A. Regulatory Context 1. The British regulatory style 2. The idea of the City of London 3. The rise of institutional shareholders B. Hostile Takeovers in the 1950s C. The Notes on Amalgamations of British Businesses 1. The British Aluminium saga 2. The Notes 3. The origins of the non-frustration rule 4. Ambiguity and enforcement D. The Takeover Code 1. Ignoring and revising the Notes 2. Ignoring the Notes—again! 3. Calls for action 4. The Takeover Code and the Takeover Panel E. Making the Takeover CodeWork 1. Enforcement, personality, and the quarterback 2. The courts 3. Keystone rules IV. The Modern Takeover Code and Takeover Panel A. The Status of the Takeover Panel B. The Case for and Against Selfand Market-controlled Regulation C. The Structure and Operation of the Takeover Panel 1. Legal foundations and authority 2. Structure and membership of the Panel 3. Day-to-day operations: The Panel Executive 4. The Takeover Appeal Board 5. The Takeover Panel’s enforcement powers D. The Form, Structure, and Application of the Takeover Code 1. Principles, rules, and notes 2. The Takeover Code, regulatory method, and its relationship to company law 3. Scope of application of the Code V. Announcement and the Offer Dance A. Identifying the Bidder 1. The pros and cons of pre-bid disclosure regulation 2. Disclosure of shareholdings B. Announcing a Possible Offer 1. The Takeover Code’s regulation of possible offer announcements 2. Price points in possible offer announcements 3. Inside information under the Disclosure and Transparency Rules 4. Regulation of insider trading prior to an announcement C. Regulating the Offer Dance 1. Statements of intention in relation to the bid 2. Statements of intention beyond the bid 3. Put up or shut up 4. Re-characterizing announcement and offer dance regulation as power-balancing rules D. The 2.7 Firm Offer Announcement E. Share Purchase Disclosures During the Offer Period VI. The Voluntary Offer A. Equal Treatment B. An Offer for All Classes of Shares 1. Comparable offers for different classes of share 2. Appropriate offers for convertibles 3. Justifying the requirement for comparable and appropriate offers C. Price and Consideration in a Voluntary Offer 1. Highest-price rule for the same class of shares during the offer 2. Price equality with pre-bid purchases 3. Prohibiting special treat 4. Equality and the form of consideration 5. Interrogating equality of treatment in pricing and consideration D. Acting in Concert VII. Deal Risk: Bid Conditionality and Deal Protections A. Bid Conditionality 1. Conditionality and private contracting 2. The Takeover Code’s conditionality regulation B. Deal Protections 1. The nature of non-completion risk 2. Regulating deal protections: The Takeover Code 3. Regulating deal protections: Private and company law VIII. The Mandatory Bid A. The Nature and Origins of the Mandatory Bid Rule B. The Mandatory Bid 1. Trigger points 2. Interests in voting shares 3. Policing the trigger points 4. Concert parties 5. Partial block sales 6. Chain companies C. The Terms of the Mandatory D. Escaping from the Mandatory Bid Obligation E. Justifying the Mandatory Bid Rule 1. Protecting minority sh 2. Equality of treatment 3. Ownership of the regulatory space 4. Efficient bids and blockholding effects 5. Should the mandatory bid rule be mandatory? IX. Regulating Timetable and D A. Time Regulation in UK Takeovers 1. The minimum offer period 2. Bid timetable after the minimum offer period B. Disclosure and Information 1. Information to be provided in the offer document 2. Target board recommendation 3. New information and updating 4. Regulating the accuracy and reliability of information X. Regulating Board Discretion: Directors’ Duties A. The Duty to Promote the Success of the Company 1. The nature of the duty 2. Takeovers and the duty to promote the success of the company 3. Takeovers and stakeholders B. Duty to Use Powers for the Purposes for Which They Are Conferred C. The Duty of Care XI. Hostile Takeovers and The Non-Frustration Rule A. The Non-frustration Rule 1. The nature of the non-frustration prohibition 2. General meeting approval and Panel dispensation B. Exploring the Optimality of the Non-frustration Rule 1. Framing the role of the target board in contractual offers 2. The defensive capability of UK companies 3. The pros and cons of takeover defences in the UK context C. The Options for Reform 1. Abolishing the non-frustration rule 2. The acceptance threshold 3. Disenfranchising share 4. Government intervention in strategic industries D. Conclusion Index