By James Hamilton, J.D., LL.M.
Effective April 19, 2010, the UK Takeover Code has been amended to require any person who is interested in 1 per cent or more of any class of relevant securities of an offeree company to make an Opening Position Disclosure following the commencement of the offer period detailing the person’s interests and short positions in, and rights to subscribe for, any relevant securities of the company. The Opening Position Disclosure must be made within ten business day following the commencement of the offer.
In addition, any person who is, or becomes, interested in 1 per cent or more of any class of relevant securities of the offeree company must make a Dealing Disclosure if the person deals in any relevant securities of the company. A Dealing Disclosure must contain details of the dealing concerned and of the person’s interests and short positions in, and rights to subscribe for, any relevant securities of the offeree company save to the extent that these details have previously been disclosed.
The Dealing Disclosure must be made by no later than the business day following the date of the relevant dealing. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company, they will be deemed to be a single person for purposes of the rule.
The UK Takeover Code implements the EU Takeovers Directive (2004/25/EC) and complies with the relevant requirements of the Directive. The Code is based upon a number of General Principles, which are essentially statements of standards of commercial behavior. These General Principles are the same as the general principles set out in Article 3 of the Directive. In addition to the General Principles, the Code contains a series of rules.