The purpose of this article is to explain the principles surrounding takeover offers conducted under the jurisdiction of the Irish Takeover Panel. The Irish Takeover Panel Act 1997, the Takeover Regulations 2006 and the Takeover Rules 2007 apply to "relevant companies", i.e. public limited companies incorporated in Ireland whose securities are (or have been within the last five years) authorised for trading on a recognised stock exchange, which are the Irish Stock Exchange, the London Stock Exchange, the New York Stock Exchange, and the NASDAQ.
Certain principles applicable to takeover bids are laid down in the European Communities (Directive 2004/25/EC)) Regulations 2006 (the "Takeover Regulations 2006"):-
All holders of the securities of an offeree of the same class must be afforded equivalent treatment, moreover, if a person acquires control of a company, the other holders of securities must be protected; The holders of the securities of an offeree must have sufficient time and information to enable them to reach a properly informed decision on an offer; Where it advises the holders of securities, the board of the offeree must give its views on the effects of implementation of the offer on employment, conditions of employment and the locations of the offeree's places of business; The board of an offeree must act in the interest of the Company as a whole and must not deny the holders of securities the opportunity to decide on the merits of an offer; False markets must not be created in the securities of the offeree, of the offeror or of any other company concerned by the offer in such a way that the rise or fall of the prices of the securities becomes artificial and the normal functioning of the markets is distorted; An offeror must announce an offer only after ensuring that he or she can fulfil in full any cash consideration, if such is offered, and after taking all reasonable measures to secure the implementation of any other type of consideration; An offeree must not be hindered in the conduct of its affairs for longer than is reasonable by an offer for its securities. How and when are bids made public?
The Irish Takeover Panel Act, 1997 Takeover Rules 2007 (the "Takeover Rules") set out:-
The manner in which an offer is to be conducted. The timetable for the offer. The requirement for secrecy before the announcement of the offer. Where a person intends to make an offer it must first disclose that intention to the board of the target or to the target's advisors before making an announcement concerning the offer. The disclosure or approach to the board must at the outset disclose the identity of the offeror and if applicable the persons having control of the offeror.
Where there is a hostile takeover, prior notice may consist of a telephone call or letter to the target's board or advisors immediately before the announcement of the bid.
The obligation to make announcements arises:-
Immediately after a firm intention to make an offer has been notified to the target board, regardless of the attitude of that board. Immediately after an obligation to make a mandatory offer – see the description of when such an obligation arises, below. Where, following an approach, the target is the subject of rumour and speculation or there is untoward movement in its share price. Where, before an...