Appendix 5. Tender offers

Panel’s consent required

1. The Panel’s consent is required for any tender offer. The Panel’s consent will normally be granted where:

   1. the tender offer could not result in the offeror and persons acting in concert with it being interested in shares carrying 30% or more of the voting rights of the company on the closing date of the tender; or

   2. the tender offer is by a person holding shares carrying more than 50% of the voting rights of a company, is for less than all the shares carrying voting rights held by the minority and the Panel believes the circumstances justify the use of a tender offer.

2. Where a tender offer to which this Appendix applies is made on a UK regulated market or a UK multilateral trading facility, this Appendix takes precedence over any requirements of the relevant market or facility for the conduct of tender offers. However, the resulting transactions will be subject to the relevant trade and transaction reporting rules and requests for delivery and settlement.

3. This Appendix does not apply where a tender offer is made solely for the purpose of a company buying in its own shares.

Procedure and clearance

1. A person publishing a tender offer for the shares of a company which are admitted to trading on a UK regulated market or a UK multilateral trading facility must do so by paid advertisement in two national newspapers and must notify the company concerned of the information specified in Section 3 at least 7 days before the day on which the tender offer closes. The offeror may also send copies of the advertisement to shareholders of the company and persons with information rights.

2. In all other cases, the tender offer must be made by sending a circular to shareholders and persons with information rights (containing the same information as for a tender offer advertisement as specified in Section 3) and must be open for acceptance for at least 21 days. A copy of the circular must be provided to the company concerned not later than the date on which it is published.

3. Subject to (d) below, the offeror must treat all shareholders on equal terms.

4. A tender offer must be for cash only but may be at a fixed price or a maximum price; top-up arrangements are not permitted.

   1. Fixed price: if the tenders exceed the number of shares sought, they will be scaled down pro rata.

   2. Maximum price: if the tender offer is over-subscribed, the striking price will be the lowest price at which the number of shares sought is met and all who tender at or below the striking price will receive that price. If necessary, tenders made at the striking price will be scaled down pro rata or balloted.

   If the tender offer is under-subscribed, all who tender will receive the maximum or fixed price, except where fewer shares are tendered than the percentage below which the tender is void.

5. The text of the advertisement or circular must be cleared by the Panel.

6. In every case the FCA, the relevant UK regulated market or UK multilateral trading facility and the Panel must be sent a copy of the final text of the advertisements or circulars at the same time as they are sent to the newspapers or are published.

Details of tender offer advertisements

1. The advertisement of a tender offer or circular (as the case may be), which must constitute a firm offer, must include the particulars set out below:

   1. the name of the offeror;

   2. the name of the broker or other agent acting for the offeror;

   3. the name of the company whose shares are sought;

   4. the maximum number of shares or proportion of voting capital offered for;

   5. a statement that, if tenders totalling less than 1% of the voting rights of the company are received, the tender offer will be void. Alternatively, the offeror may indicate a higher percentage below which the tender offer will be void but any figure higher than 5% is not permitted unless approved by the Panel in advance of the announcement of the tender offer;

   6. a statement that, subject to (v), a shareholder’s tender will be irrevocable;

   7. the fixed or maximum price offered;

   8. the number and percentage of shares in which the offeror and persons acting in concert with it are interested, specifying the nature of the interests concerned (see Note 5 on Rule 8);

   9. the closing day and time for the tender; and

   10. the arrangements for delivery and settlement (on a basis approved in advance by the Panel).

2. A tender offer may not be subject to any condition other than (a)(v) above.

3. If the offeror wishes to make a statement about its future intentions, it must be contained in the advertisement of the tender offer or circular, as the case may be, and should be explicit and unambiguous. The Panel should be consulted in advance with regard to any such statement.

4. If the offeror wishes, a statement may be made comparing the value of the tender offer with the market value of the shares being offered for.

5. The advertisement or circular must be restricted to the items above together with any information required under the FSMA, secondary legislation made under the FSMA or any rule made by the FCA.

Circulars from the board of the offeree company

A copy of any document published by the board of the offeree company in connection with the tender offer must be sent to the Panel in electronic form at the same time as it is published.

Announcement of the result of a tender offer

The result of a tender offer must be announced by 8.00 am on the business day following the close of the tender.

Prohibition of further transactions during a tender offer

The offeror and any person acting in concert with it may not otherwise acquire or dispose of any interest in shares carrying voting rights in the company between the time of the publication of the tender offer and the time when the result of the tender offer is announced.­