Goldilocks (Control) and the Three Bears: Panel on Takeovers and Mergers v. King
- PDF / 730,897 Bytes
- 19 Pages / 439.37 x 666.142 pts Page_size
- 0 Downloads / 173 Views
Goldilocks (Control) and the Three Bears: Panel on Takeovers and Mergers v. King Anna L. Christie1 · J. S. Liptrap1
© T.M.C. Asser Press 2020
Abstract The UK takeover regulatory landscape must be understood in the context of the interplay between enforcement of the rules and how investors behave in the face of those rules from a corporate governance perspective. From a legal standpoint, the courts have historically never been involved in the regulation of takeover transactions in the UK. However, section 955 of the Companies Act 2006 now enables the Panel on Takeovers and Mergers to seek court enforcement when a party fails to comply with the City Code on Takeovers and Mergers. Although a potentially useful mechanism to support the Panel in its administration of the Code, it was doubted whether the Panel would ever elect to rely on the provision as it involves exposing its regulatory monopoly to judicial scrutiny. The Scottish Court of Session decisions in Panel on Takeover and Mergers v. King mark the first time the Panel has chosen to rely on Section 955, in the context of enforcing the Mandatory Bid Rule. This paper analyses how this important rule is applied and enforced in practice, as well as the relationship between the Panel and the courts. The facts of the decisions also occasion consideration of an investment tactic that can be deployed to avoid triggering the Mandatory Bid Rule, namely what we define as ‘goldilocks control’. Keywords Panel on Takeovers and Mergers v. King · Takeover regulation · Mandatory Bid Rule · Shareholder activism · Corporate governance · Section 955 of the Companies Act 2006
Unless otherwise stated, all URLs were last accessed February 2019. * J. S. Liptrap [email protected] Anna L. Christie [email protected] 1
Faculty of Law, University of Cambridge, Cambridge, UK
123Vol.:(0123456789)
A. L. Christie, J. S. Liptrap
1 Introduction The Scottish Outer House and Inner House1 decisions in Panel on Takeovers and Mergers v. King provide a glimpse into the esoteric world of takeover regulation.2 Takeover transactions occur in a unique environment and are governed by rules and institutions not normally conceived of as situated within company law.3 This analysis focuses on how one of the most important rules in takeover regulation is applied and enforced in practice—the Mandatory Bid Rule. Historically, the courts of the UK have never been involved in the enforcement of the rules regulating takeover transactions. Consequently, these decisions shed light on the nature of the relationship between the institutions that regulate takeover transactions and the courts in the enforcement context. Allied to this, while there is value in understanding how takeover transactions are supervised, it is equally necessary to rationalise how investors approach the rules and the investment tactics they might implement from a corporate governance perspective. The issues arising from the decisions occasion a closer look at an investment tactic that can be deployed to avoid triggering the Mandato
Data Loading...
