Takeover Panel Consultation – Higher Profile For Pension Scheme Trustees?

Headline

It is likely pension scheme trustees will, at last, have a formal role where a scheme's listed participating employer is subject to a takeover bid. This would apply to participating employers registered in the UK and whose shares are traded on a UK regulated market¹.

Background

Last year employees' representatives were included in the Takeover Code as "persons affected" and therefore became entitled to receive formal information about takeover bids. Their views on the impact of the bid on their employer have to be circulated to shareholders.

Several pension scheme trustee boards complained to the Takeover Panel that shareholders would also be better informed to evaluate the bid if shareholders had a greater understanding of the impact of the bid on the target company's pension obligations. For instance, a bid may result in pension scheme trustees making increased demands on the company if the company's covenant is adversely affected by a successful