Companies Act 2006

[F1 Obligations of the board of directors of the offeree company U.K.

Textual Amendments

F1 Sch. 1C inserted (31.12.2020) by The Takeovers (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/217), reg. 1, Sch.; 2020 c. 1, Sch. 5 para. 1(1)

17. (1) Rules must ensure that, during the relevant period, the board of directors of the offeree company must obtain the prior authorisation of a general meeting of the company given for this purpose— U.K.

(a) before taking any action, other than seeking alternative takeover bids, which may result in the frustration of the bid, and

(b) in particular, before issuing any shares which may result in a lasting impediment to the offeror’s acquiring control of the offeree company.

(2) “The relevant period”—

(a) begins when the board of directors of the offeree company receives the information that a decision to make a takeover bid has been made public, or at such earlier stage as rules may determine, and

(b) ends when the result of the bid is made public or the bid lapses.

(3) Rules must ensure that, with regard to decisions taken before the beginning of the relevant period and not yet partly or fully implemented, a general meeting of the company must approve or confirm any decision—

(a) which does not form part of the normal course of the company’s business, and

(b) the implementation of which may result in the frustration of the takeover bid.

(4) For the purposes of this paragraph, where a company has a two-tier board structure, “board of directors” means both the management board and the supervisory board.

18. (1) Rules must ensure that the board of directors of the offeree company must draw up and make public a document setting out its opinion of the takeover bid and the reasons for the opinion, including its views on— U.K.

(a) the effects of implementation of the takeover bid on all the company’s interests and specifically employment, and

(b) the offeror’s strategic plans for the offeree company and their likely repercussions on employment and the locations of the company’s places of business as set out in the offer document in accordance with paragraph 12(4)(k).

(2) Rules must ensure that the board of directors of the offeree company must at the same time communicate that opinion—

(a) to the representatives of its employees, or

(b) where there are no such representatives, to the employees themselves.

(3) Rules must ensure that, where the board of directors of the offeree company receives in good time a separate opinion from the representatives of its employees on the effects of the takeover bid on employment, that opinion must be appended to the document.]