New UK takeover rules lessen uncertainty for target firms

Elizabeth Fournier
NEW measures to identify takeover bidders and tighter offer rules have almost halved the amount of time that target firms spend “under siege”, research out today claims.

In a wide-ranging survey to mark the first anniversary of UK’s new Takeover Code – brought in partly as a response to the furore over Kraft’s acquisition of Cadbury in 2010 – law firm Clifford Chance has found that average virtual bid periods have almost halved, after bidders were made public to the market and forced to adhere to strict deadlines.

Under the new rules, potential bidders must clarify their position within 28 days of expressing an interest – the so-called put-up-or-shut-up rule.

Clifford Chance also found that:

■ 101 target companies entered offer periods in the year to today.

■ Ninety-one per cent of firm offers over the year were recommended at the time of announcement, with just four hostile offers in the period.

■ The value of larger deals has increased from £21bn to £24bn.

■ Five targets were subject to competitive bids.

■ There were 26 “firm intention” announcements, down from 33 the previous year.