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Changes to the Takeover Code 2013

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01/11/2013

The Takeover Code (the Code) applies to all offers for companies registered in the UK, the Channel Islands or the Isle of Man whose securities are traded on a regulated market in the UK or on any stock exchange in the Channel Islands or the Isle of Man. Consequently, for example, all companies registered in the UK, the Channel Islands or the Isle of Man whose securities are listed on the Official List of the UK Listing Authority are subject to the Code. However, until 30 September 2013, a residency test applied to companies whose securities were admitted to trading on a multilateral facility (e.g. AIM) in order for the Code to apply to them.

From 30 September, a company whose registered office is in the UK, the Channel Islands or the Isle of Man and whose securities in the UK are admitted to trading on a multilateral facility will no longer be required to have its place of central management and control in the UK, the Channel Islands or the Isle of Man in order for the Code to apply to that company. This will have the effect of bringing a number of companies (in particular AIM companies) within the ambit of the Code that had previously not been subject to the Code because their place of central management and control was outside the UK, the Channel Islands or the Isle of Man. This amendment does not apply to certain categories of company, notably open-ended investment companies.

WM comment

AIM companies which are registered in the UK, the Channel Islands or the Isle of Man and which have their place of central management and control outside those territories should consider whether any action needs to be taken as a result of them coming within the ambit of the Code from 30 September. For example, it would be sensible to review the articles of association to ensure there is no inconsistency with provisions of the Code. Significant shareholders (and persons acting in concert with them), especially those close to the 30 per cent threshold, should also consider the implications of the recent extension to the Code’s scope.

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