New changes to the takeover code stipulate that all companies that have their registered office in the UK – even if they are managed abroad – will now have to comply. Previously, the test focused on where board members resided, so could change if directors relocated.
The code’s requirements include providing target company shareholders with sufficient information to make an informed decision on the bid.
“Companies will have to upscale themselves and provide more information for shareholders,” James Broadhurst, senior associate at Pinsent Masons, told City A.M.
“If they’re involved in a takeover, it will now be mandatory for them to hire advisers, which will be more expensive.”
Michael Dawes, partner at law firm Memery Crystal, who works for a number of clients affected by the change – including miner Beacon Hill Resources – said he thinks that the changes will be helpful in removing the confusion over who must comply with the code.