On 31 March 2021 the Takeover Panel (the Panel) published its Response Statement (RS 2020/1) setting out significant changes to the Takeover Code (the Code) in relation to conditions to offers and the offer timetable.

The amendments to the Code will take effect on Monday, 5 July 2021 (the implementation date) and will be applied in relation to all firm offers announced on or after that date, except where to do so would give the amendments retroactive effect. Any ongoing firm offers which straddle the implementation date, and any offers announced on or after the implementation date which are in competition with such ongoing offers, will continue to be subject to the unamended provisions of the Code.

The changes to the Code follow the Panel’s Public Consultation Paper 2020/21 published in October 2020 and include:

• Amendments to the offer timetable. The amendments, which are intended to simplify the timetable, significantly change the Code timetable for a contractual offer including by introducing a new single date for the satisfaction of all conditions (see below).
• Suspending the offer timetable for official authorisations and regulatory clearances. The Code has been amended to provide that the Panel Executive can suspend the timetable pending the satisfaction of conditions relating to official authorisations and regulatory clearances.
• Long-stop dates for contractual offers and requirement to take necessary procedural steps in relation to a scheme of arrangement. The Code has been amended to provide that an offeror must set a long stop date for its contractual offer. Further, the Code has been updated to include certain new procedural requirements where an offer is implemented as a scheme of arrangement.
• Consistent treatment for official authorisations and regulatory clearances. The Code has been amended to remove the special treatment currently given to conditions relating to UK and European competition clearances. All regulatory conditions will now be treated in the same manner and an offeror will only be able to invoke a condition if the circumstances on which it is seeking to rely are material in the context of the offer (see below).
• Acceptance condition invocation notices and announcements of acceptance levels. The procedure and timing for an offeror to lapse an offer if the acceptance condition is not satisfied has changed. The new simplified procedure provides that an offeror can publish an acceptance condition invocation notice giving target shareholders 14 days’ notice that it intends to lapse the offer if insufficient acceptances are received by a specified date. In addition, there are new prescribed dates on which an offeror will be required to announce acceptance levels.
• Single date for the satisfaction of all conditions. The Code has been amended to provide that all of the conditions to an offer must be satisfied or waived by Day 60 (it no longer distinguishes between the acceptance condition and all other conditions). As noted above, the updates to the Code introduce greater flexibility to suspend the timetable before Day 60. The Code, as amended, further provides that an offeror can bring forward the unconditional date (the new Day 60) and set a shorter timeframe by which all conditions should be satisfied (or waived) by making an 'acceleration statement'.
• Withdrawal rights. The Code has been amended to provide that any target shareholder who accepts an offer will now be able to withdraw their acceptance at any time until the acceptance condition is satisfied. This is more flexible than the current regime which provides withdrawal rights only from the date which is 21 days after the first closing date.
• The invocation of conditions and pre-conditions to offers. The Code has been amended, and Practice Statement No 5 (Rule 13.5(a) – Invocation of conditions) has been updated, to clarify the Panel’s approach to the invocation of conditions and pre-conditions to an offer, including the requirement in Rule 13.5(a) of the Code for an offeror which wishes to invoke a condition or pre-condition to satisfy the Panel that the circumstances which have arisen are of “material significance” to it in the context of the offer.