Takeover Panel proposes tighter rules
Firms in the UK should be given tougher rules to defend themselves from hostile takeover bids, according to a report published by the Takeover Panel. The Panel came to this conclusion at the end of a review by their own Code Committee to assess existing regulation which followed Kraft Foods’ purchase of Cadbury in February 2010.
Lindsay Tomlinson, chair of the committee, said: “”It is clear that some rebalancing of the rules is needed to check the evolution of market practice which has run in favour of the offeror”". Her proposals include altering the Takeover Code to remove bidders’ “”tactical advantage”" and requiring bidders to clarify their intentions within a shorter time frame. Business secretary Vince Cable welcomed the review as a positive step in “”addressing this central concern”" regarding hostile takeovers.
However, more radical changes were rejected after being branded as “”impractical”". These suggestions included raising the threshold for a successful bid above the current 50% plus one of the target firm’s shareholders, and also removing the voting rights of individuals or groups who bought shares in the target firm following the start of the bidding process.
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(Article sourced from the BBC News website, 21 October 2010)