Takeover Panel plans to make hostile bids more difficult

Changes to Takeover Panel rules are set to make hostile bids more difficult in the wake of Kraft's controversial £11.6bn buyout of Cadbury. The panel's updated code aims to redress imbalances giving hostile bidders a "tactical advantage" and making it too easy for hostile bids to succeed, the City regulator said yesterday.

Alongside changes to the "put up or shut up" system, the new rules also require companies to take into account the impact of a change of ownership on staff. Businesses will also have to disclose all advisory fees, to address concerns that high fees were tempting banks to act in their own interests rather than in those of shareholders.

The Takeover Panel review was triggered by the furore following Kraft's decision to shut down the Cadbury's Somerdale factory in Keynsham, near Bristol, when the US food giant had said during the acquisition process it would remain in operation. The review generated an "unprecedented number of responses" and "a great deal of discussion" among both market participants and other interested parties, the panel said.

Under the new rules, a potential buyer will have just four weeks after its name becomes public in which to formally declare its intentions, unless the timetable is extended by agreement with the company it is approaching. The new measure aims to stop bidders destabilising businesses by approaching them without laying down any firm offer. The target company will now be able to publish the name of its stalker and thus start the four-week countdown.

Business groups broadly applauded the updated regime yesterday. "The panel makes some welcome changes that will reduce periods of uncertainty for companies that are takeover targets, and which give greater clarity about the bidder's plans for the business, including the impact on employees," said Matthew Fell, director for competitive markets at the Confederation of British Industry.

"Greater transparency is also welcome to help ensure that the prospect of fees on completion of a deal does not bias the likelihood of it happening."

But the panel rejected some of the more radical suggestions from the review process. It will not be increasing the amount of shares a bidder needs for a hostile approach to be accepted, despite the anger voiced by, among others, the Business Secretary, Vince Cable, about takeover bids swung by short-term hedge-fund investors. Increasing the minimum acceptance share would be "impractical without associated changes in company law", the panel said.

Despite the panel's conclusions, Mr Fell said the matter was not over and "there remains a need for a full debate about the role of short-term investors in determining the outcomes of takeover battles".

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Laura Trott with her gold
Commonwealth Games
Arts and Entertainment
Gal Gadot as Wonder Woman
film
News
Bryan had a bracelet given to him by his late father stolen during the raid
people
Sport
France striker Loic Remy
sportThe QPR striker flew to Boston earlier in the week to complete deal
Extras
indybestSpice up your knife with our selection of delicious toppings
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Training/Learning and Development Coordinator -London

£28000 - £32000 per annum: Ashdown Group: Training/Learning and Development Co...

Training Programme Manager (Learning and Development)-London

£28000 - £32000 per annum + benefits: Ashdown Group: Training Programme Manage...

.NET Software Developer (.NET, C#, ASP.NET, front-end)

£30000 - £45000 per annum: Harrington Starr: A Global Financial Service Organi...

C# Web developer (C#,MVC,ASP.NET,SQL)

£30000 - £40000 per annum + Bonus+Benefits+Package: Harrington Starr: C# Web d...

Day In a Page

A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on
It's the best of British art... but not all is on display

It's the best of British art... but not all is on display

Voted for by the British public, the artworks on Art Everywhere posters may be the only place where they can be seen
Critic claims 'I was the inspiration for Blanche DuBois'

Critic claims 'I was the inspiration for Blanche DuBois'

Blanche Marvin reveals how Tennessee Williams used her name and an off-the-cuff remark to create an iconic character
Sometimes it's hard to be a literary novelist

Sometimes it's hard to be a literary novelist

Websites offering your ebooks for nothing is only the latest disrespect the modern writer is subjected to, says DJ Taylor
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

The woman stepping down as chair of the Heritage Lottery Fund is worried