LONDON |
LONDON (Reuters) – Foreign-managed companies trading on Britain’s junior stock market will be subject to stricter takeover rules come September, the UK Takeover Panel said on Wednesday.
The panel’s takeover code currently applies to companies listed on the Alternative Investment Market (AIM) .FTAI only if they were incorporated in the UK and if their central management is located in the country.
From September 30, however, the central management test will cease to exist, bringing AIM-listed foreign-run companies under the same regulations as those listed on the main market.
The code places limits on how many shares of a target company can be bought by a bidder before a cash offer has to be made to the target’s other shareholders. The offer must be at the highest price in the 12 months before the takeover was announced.
It also demands that the target company appoints an independent adviser to counsel shareholders and also gives employees and pension scheme trustees a right to offer an opinion on the effects of an offer.
Any deals seen as favourable to certain shareholders are banned and companies involved in a deal are subject to stringent reporting and disclosure rules.
Kate Ball-Dodd, corporate partner at international law firm Mayer Brown, welcomed the move but said it is too soon to tell whether enforcing such rules on the many foreign-managed companies listed on AIM will crimp lucrative merger and acquisition activity or deter foreign companies from listing their shares in London.
(Reporting by Clare Hutchison; Editing by David Goodman)