Shareholder Acceptance Commitments – When Is It Okay To Accept?

In brief

• If a shareholder commits to accept a takeover bid ‘in the absence of a superior proposal’ and the shares the subject of the commitment, together with any shares already controlled by the bidder, exceed 20%, the Takeovers Panel expects the shareholder to delay accepting to give a rival bidder time to emerge.
• The shareholder should wait until 21 days after the offer period has opened, which should be a week or so after the target’s statement is released. 

Shareholder acceptance commitments

If a shareholder commits to accept a takeover bid ‘in the absence of a superior proposal’, does it have to wait before accepting the bid? And, if so, for how long?

The Takeovers Panel has long held the view that, where the shares the subject of the commitment together with any other shares controlled by the bidder exceed 20%, the shareholder cannot accept the bid straight away but should wait for a period of time to allow a competing proposal to emerge. Otherwise the arrangement