BUSINESS secretary Vince Cable yesterday launched a formal investigation into M&A rules.
The move comes after intense criticism of Kraft’s conduct in the lead-up to its takeover of Cadbury. It follows calls from Cable’s predecessor Peter Mandelson. The panel will examine whether the threshold of shareholders voting in favour of a bid needs to be increased to prevent short-term investors having an undue influence over the process.
It will also look at whether companies making bids should be forced to supply more financing information.
The new rules could prevent hedge funds and others from voting on takeovers if they bought stock during a bid battle, and could force companies to disclose the fees paid to investment banks for merger advice.
Cable said: “We welcome foreign investors but we want all shareholders to be empowered.”