Introduction

The implementation of the Takeover Directive into national law has brought about changes to the legal framework of takeover regulation in the United Kingdom, but to a lesser extent than in many of the other Member States. Since 1968, takeovers in the United Kingdom had been regulated by the rules contained in the City Code on Takeovers and Mergers (the ‘Code’), which had no legal force. The Code was administered by the Panel on Takeovers and Mergers (the ‘Panel’), an independent, non-statutory body. In the absence of statutory powers of enforcement, the Panel employed a consensual approach to ensuring compliance with the Code. Prior to the implementation of the Takeover Directive, the Code already contained a large part of the provisions that Member States are required to implement into national law as a result of the Takeover Directive.

Following implementation of the Takeover Directive, the rules contained in the Code have statutory force. In addition, the Panel, whilst remaining an independent body, has been provided with certain statutory powers to allow it to ensure compliance with the Code. However, no breach of a rule or disclosure requirement contained in the Code will affect the validity of a transaction.

Implementation of the Takeover Directive required changes both to the Companies Act, the principal company law statute and to the Code.