Panel upholds takeover move
Tuesday 31 October 1995
Trafalgar House and its investment bank adviser, Swiss Bank Corporation, caused a storm of controversy earlier this year by using the device to help cover the costs of bidding for Northern Electric. Some critics likened it to a form of insider dealing.
However, after consultation in the City the Panel has decided against outlawing the practice. The view has been taken that, since bidders are allowed under a Companies Act exemption to profit by purchasing ahead of a bid physical stock in their bid targets, there is no reason why derivative instruments that do the same thing should be treated differently.
A minor rule change to deal with the use of derivatives after the takeover bid has commenced, is to be proposed, but this would only bring them into line with other disclosure provisions.
Contracts for differences and other derivative transactions entered into by the bidder or its associates during the course of a bid will be made disclosable in the same way as dealings in the physical stock.
The Takeover Panel has consistently adopted a more relaxed view of the use of derivatives in takeovers than other City regulators. It sees little difference between the economic interest a derivative gives in a takeover battle and that given by real shares. The rules should, therefore, seek to treat them as the same, the Panel argues.
In the Trafalgar case the contract for differences caused added controversy since it involved transactions in the shares of a range of other regional electricity companies, as well as those in the target company, Northern Electric.
- 1 Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
- 2 Greece debt crisis explained: A history of just how the country landed itself in such a mess
- 3 People all over the world are getting semicolon tattoos to draw attention to mental health
- 4 Greek debt crisis: Yanis Varoufakis's funniest (and most memorable) quotes
- 5 The biggest first date turnoff has been revealed
Greece debt crisis explained: A history of just how the country landed itself in such a mess
Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
Man dies instantly after shooting firework from top of his head
Isis schoolgirl Amira Abase who fled London to join terrorists in Syria mocks victims of Tunisia massacre
Father faces deportation to Thailand after 27 years in Britain for two 'stupid crimes'
More Britons believe that multiculturalism makes the country worse - not better, says poll
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
competitive: SThree: Are you passionate about sales?Do you have a keen interes...
£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...