UK Takeover Panel Sets Out Proposals to Ban Break Fees, Introduce Other Material Changes

On March 21, 2011, the UK Takeover Panel published detailed proposed amendments to the UK Takeover Code. The amendments, which are designed to address concerns that bidders in UK takeovers have achieved a tactical advantage over targets, are expected to be implemented in the second half of 2011. Key proposed amendments include: (i) the banning of break fees, implementation agreements, exclusivity undertakings and other bid related commitments given by target companies; (ii) a requirement for all potential bidders who have approached a target company (and have not been rebuffed) to be publicly identified in possible offer announcements made by a target company at the start of a takeover transaction and (iii) the imposition of a fixed 4 week “put up or shut up” regime to potential bidders who have been publicly identified. The amendments are likely to strengthen the position of target companies in UK takeovers.