On 24 March 2022, the Takeover Panel (the “Panel”) issued a note to advisers on disclosure of information under Rule 9 of the Takeover Code (the “Code”) and a note to advisers in relation to Rule 2.8 statements. Such notes do not form part of the Code and are available on the Panel’s website.

Key Takeaways

• When preparing a Rule 9 waiver circular, refer to the ‘Note to advisers in relation to Rule 9 waiver circulars’, which contains a checklist of content requirements;
• In respect of Rule 9, the Panel Executive should be consulted in cases of doubt as to whether a group of persons will be considered to be acting in concert and, in particular, if the parties wish to seek to rebut a presumption that they are acting in concert;
• Any person proposing to make a Rule 2.8 statement should consult the Panel Executive before doing so; and
• Any Rule 2.8 statement must be published via a Regulatory Information Service in accordance with Rule 30.1 and should be linked to the Code company to which the Rule 2.8 statement relates.

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Rule 9

Under Rule 9 of the Code, a person or persons acting in concert, must make an offer for a company where it or they have acquired 'control' of that company. The Code defines 'control' as an interest or interests in shares carrying 30 percent or more in aggregate of the voting rights of a company.

In order to avoid an obligation to make a Rule 9 mandatory bid, a company to which the Code applies must follow a Rule 9 waiver procedure (previously known as a ‘Code whitewash’ procedure) prior to the transaction taking place. As part of the procedure, the company must send a Rule 9 waiver circular to the shareholders of the company whose shares are being acquired containing the information prescribed by Appendix 1 of the Code. This includes certain information on the operation of Rule 9. Information on Rule 9 may also need to be provided to prospective investors in connection with an initial public offering if a person or concert party will be interested in shares which carry 30 percent or more of the voting rights of the company following admission.

The note to advisers contains pro forma wording that can be used when providing the necessary information to shareholders in respect of the operation of Rule 9.

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Rule 2.8

Under Rule 2.8 of the Code, a person who has made a statement that it does not intend to make an offer for a company (a ‘no intention to bid statement’ or a ‘Rule 2.8 statement’) is subject to various restrictions. The restrictions apply for six months from the date that the statement is made, except where the Panel provides consent to a shorter period.

However, Note 2 on Rule 2.8 sets out a list of permitted reservations which can be set out in Rule 2.8 statements. The permitted reservations are circumstances which, if they occur, will allow the statement to be set aside and the person to be released from the restrictions imposed under Rule 2.8.

The note contains two pro forma examples of Rule 2.8 statements in relation to situations where, at the time the Rule 2.8 statement is made:

• No third party has announced a firm intention to make an offer; or
• A third party has announced a firm intention to make an offer.