This update covers the publication by the UK Takeover Panel of:

• its fourth Panel Bulletin; and
• a new Practice Statement.

Panel Bulletin 4: Calculation of the value of an offer regulated by the Takeover Code

In this Panel Bulletin, the Panel has taken the opportunity to remind financial advisers that the calculation of the value of an offer should:

• include only the shares in the target company in issue as at the date of the offer document or Rule 9 waiver circular (and not shares in the target company which are “to be issued”); and 
• exclude any shares in the target company which are already held by the bidder and which are not being offered for. 

Document charges are one of the Panel's three principal sources of income. The other two are the PTM levy and the recognised intermediary status charge.

Where can I find the charges payable on offer documents? The  Document Charges section of the Takeover Code sets out the charges payable on offer documents (including scheme circulars) and Rule 9 waiver circulars. 

How is the charge calculated? The amount of the document charge will depend upon the value of the offer according to the scale set out in Section 1 of the Document Charges section. 

What does a financial adviser to a bidder need to do? The financial adviser to a bidder is required to include the calculation of the value of the offer when it sends the offer document checklist to the Panel Executive.

New Practice Statement: stake-building during an offer period 

The Panel has issued Practice Statement 33 which sets out the way in which the Panel interprets and applies certain provisions of the Takeover Code in relation to the purchasing of shares in the target company by a bidder during an offer period and explains certain practical steps that should be taken in order to comply with those provisions.

The Panel notes that:

• If a bidder intends to purchase shares in the target company, the application of a number of rules of the Takeover Code, including Rules 4, 5, 6, 7, 8, 9 and 11, will also need to be considered in addition to the matters outlined in PS 33 and
• If a bidder intends to purchase shares in the target company during an offer period, the Panel should be consulted in advance.

The new practice statement covers:

• the attribution of purchased shares to a bidder
• the prohibition on purchasing shares from an exempt principal trader connected with the offeror and
• other considerations for a bidder purchasing shares in the target company

For further detail see Practice Statement 33.

If you would like to discuss this update or Public M&A please contact Nick Graves, Rupert Weston or a member of the Burges Salmon Corporate Group.