Key Points:
"Unacceptability" is judged by reference to
the interests of shareholders, rather than strict compliance with
the letter of the law.
Reverse takeovers have been problematic since the Gloucester
Coal battle last year. The Panel has just released some guidance on
this issue.
It will be remembered that the Panel twice ruled in favour of
Noble Group against the reverse takeover of Gloucester Coal that
would have resulted from Gloucester's bid for Whitehaven
Coal.
On the first occasion, it ruled that the acquisition of 21% of
the nominal bidder without the approval of its shareholders was an
unacceptable change of control.
That decision went on review. The Review Panel ruled that, by
itself, a 21% acquisition was not a change of control. However, it
held that the takeover in question was unacceptable because it did
not allow the bidder's directors to consider a superior
competing takeover bid for the bidder.
