Takeover Panel Practice Statement No 27 – Directors' Irrevocable Commitments And Letters Of Intent

On 17 January 2014, the Takeover Panel Executive published Practice Statement No 27.  The Practice Statement clarifies the way in which the Panel Executive interprets and applies Rule 21.2 of the Takeover Code in relation to irrevocable commitments and letters of intent given by offeree shareholders who are also offeree directors.

Rule 21.2

Rule 21.2(a) states that neither the offeree company nor any person acting in concert with it may enter into any offer-related arrangement with either the offeror (or any person acting in concert with it) during an offer period or when an offer is reasonably in contemplation, without the consent of the Panel.  The directors of the offeree company are presumed to be acting in concert with the offeree (by virtue of paragraph (2) of the definition of "acting in concert") and are therefore caught by this restriction.