The takeover Panel yesterday rapped the knuckles of Nabarro Wells, the firm of City lawyers, issuing a critical assessment of the company's handling of a takeover offer for one of its clients from BT Group.
It also emerged yesterday that this was the second time that Nabarro Wells has recently fallen foul of the panel.
The panel's status as a non-statutory body prevents it fining City professionals or taking even sterner action. However, it can issue public reprimands. Criticism from the panel is generally reserved for private admonishments but in severe cases it will go public with its ire.
An announcement issued yesterday said that Nabarro Wells had failed to consult with the panel's executive, as required by Note 1 of Rule 2.2 of the Code on Takeovers and Mergers. Nabarro Wells refused to comment.
The panel said Nabarro had been aware for two months, between October and December, that its client, Transcomm, had received a takeover approach from BT Group before making the news public. In one crucial four-and-half-day trading period immediately before the eventual announcement from Nabarro Wells, Transcomm's share price rose about 32 per cent to 14.5p in two separate surges.
The panel said Nabarro Wells was obliged to consult it on whether an announcement was necessary in the event of an untoward share price movement. It said it was a matter for the panel to decide what constituted an untoward price movement.
The panel added: "The Executive recently warned Nabarro Wells about compliance with Note 1 on Rule 2.2 and the need to consult the Executive in connection with a separate matter. This failure to comply with Note 1 on Rule 2.2 is therefore particularly regrettable."
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