Bidders for U.K. companies will be subject to new transparency rules, prompted mainly by Kraft Foods' US$20B hostile takeover of Cadbury last year
September 16, 2011
– New regulations requiring bidders for U.K. companies to identify themselves will take effect on Sept. 19. The transparency measures follow Kraft Foods Inc.’s move last year to acquire Cadbury Plc in a US$20 billion hostile takeover, Bloomberg reported Sept. 15.
Under the new rules, bidders must identify themselves if takeover talks become public via the press or target companies themselves. Furthermore, companies will have to make formal offers within 28 days. Firms not specifying financing and advising details will have to put transactions on hold for six months, stated Takeover Panel guidelines.
The rules are intended to protect investors in companies targeted for takeover and give hostile bidders fewer advantages.
The guidelines seek to protect investors, while limiting the power of hostile bidders, as increases in due diligence from potential buyers likely strengthens deals, said London law firm Linklaters LLP.
The primary source of this article is Bloomberg, New York, New York, on September 15, 2011.