On 22 April 2020, the Board of Moss Bros Group plc announced that it had been informed by Brigadier Acquisition Company Limited that it was seeking a ruling from the Takeover Panel in order to invoke a condition of its offer and lapse its offer for Moss Bros. The Panel’s ruling will consider Rule 13.5 (a) of the City Code on Takeovers and Mergers (Code) which states that: “An offeror should not invoke any condition or pre-condition so as to cause the offer not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the condition or pre-condition are of material significance to the offeror in the context of the offer.”

All previous attempts to invoke a material adverse change clause on Code regulated transactions have failed. The reference point for UK Public M&A transactions is the decision of the Panel on the WPP bid for Tempus (see (Panel Statement 2001/15)). The Panel rejected WPP’s attempt to withdraw from its offer for Tempus, which featured a MAC clause, following the 9/11 terrorist attacks, when, in WPP’s view, this had resulted in a significant deterioration in Tempus’ long-term prospects.

Public M&A advisers will be waiting with interest for the Panel’s ruling which will set the tone for future public deals in the UK.

Written by Nick Graves.