New UK Takeover Code changes explained post-Cadbury/Kraft

Tuesday, November 15, 2011 | Posted by: Grant Thornton

CadburyThe acquisition of Cadbury plc by the US-based Kraft Food Inc in 2010 caused a public outcry and political debate on the UK takeover regime. As a result, new rules have come into force on UK public company takeovers. What are the key amendments, and how will they impact future M&A and takeover activity?

Following a public consultation, the Panel on Takeover and Mergers has set out a revised Takeover Code, creating a new landscape for bidders, targets, and their advisers in the public company M&A arena

New UK takeover rules

The changes to the Takeover Code came into effect on 19 September 2011 and the key amendments are as follows:

  • Publicly naming potential offerors.
  • Fixed ‘put up or shut up’ deadline.
  • General prohibition on offer-related arrangements.
  • Disclosure of offer-related fees as well as additional financial information.
  • Improved disclosure of bidder’s intentions regarding the target and its employees.
  • Improving the ability for target employee representatives to make their views known.

What these individual amendments mean and the issues arising for the UK M&A landscape can be found in our short report: The new landscape of the UK takeover regime.

Future impact on M&A

Interested parties will be keeping a close eye on the first few transactions that take place in this new era of the takeover regime as these will set the precedents for future transactions.

There will be an adjustment period as the market adapts but we believe that most acquisitive entities are likely to continue to focus on the fundamentals of a deal; however the new rules may mean that bidders change their normal bid strategy and tactics to account for new risk factors.

Download the report

For further information, read the full report on the new landscape for takeovers. Alternatively, contact Philip Secrett, Partner, Corporate Finance on +44 (0) 20 7728 2578,; or Salmaan Khawaja, Associate Director, Corporate Finance, who spent two years on an external secondment at the Takeover Panel working on a range of public company takeover transactions, on +44 (0) 20 7728 2053,

Image: © Fiona Cullinan