Statement of public censure for Takeover Code breaches

Print publication


The Takeover Panel has issued a statement of public censure of Credit Suisse, Freshfields Bruckhaus Deringer and Holman Fenwick Willan in respect of their conduct as advisers in connection with the acquisition by Vallar plc of two Indonesian coal mining companies which involved breaches of the Takeover Code (the Code).┬áThe conduct of Vallar’s financial adviser, J.P. Morgan, was described as “disappointing” but insufficiently serious to merit public criticism.

The breaches of the Code identified by the Panel were:

  • a failure by Credit Suisse, HFW and J.P. Morgan to consult the Panel on whether the Panel would regard the parties who were selling their interests to Vallar as acting in concert (in breach of section 6(b) of the Introduction to the Code)
  • failure by Credit Suisse and J.P. Morgan as financial advisers to discharge their particular responsibility to advise their clients (in breach of section 3(f) of the Introduction to the Code)
  • failure by Credit Suisse, Freshfields and HFW to present certain forward-sale arrangements to the Panel (in breach of section 9(a) of the Introduction).

In delivering its censure, the Panel took the opportunity to issue a number of reminders to practitioners:

  • the Panel system of regulation depends upon parties and their advisers consulting the Panel if and when in doubt about the application of the Code
  • the need to consult the Panel is particularly acute in cases where there are doubts as to whether the parties are acting in concert
  • taking legal or other professional advice on whether parties are acting in concert, or taking warranties or representations from the parties concerned that they are not acting in concert, is no substitute for consultation with the Panel
  • when consulting the Panel all relevant facts must be disclosed and no relevant facts omitted
  • financial advisers have a particular responsibility under section 3(f) of the Introduction of the Code to comply with the Code and to ensure, so far as they are reasonably able to do so, that their client and its directors are aware of their Code responsibilities and comply with them and that the Panel is consulted wherever appropriate.

WM comment

The Code rules regarding concert parties can be difficult to navigate. In cases of doubt as to their applicability, it is essential to consult with the Panel.