Principal Changes to the UK Takeover Code

20 October 2011
The Harvard Law School Forum on Corporate Governance and Financial Regulation
Recently, a new version of the Takeover Code came into force. With few exceptions, it governs all offers and possible offers made from this date. The amendments are the result of the year-long consultation process initiated by the Takeover Panel after widespread criticism and concern following Kraft Food Inc.’s hostile takeover of Cadbury plc. The amendments are designed to address the concern that hostile bidders have recently been able to acquire a tactical advantage over the target company to the detriment of the target and its shareholders and that the outcome of hostile offers is often unduly influenced by short-term investors that do not take into account the long-term interest of the target. The amendments being introduced are intended to redress the balance in favour of the target. This note provides a brief update of the principal changes.