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Brexit impact

The operation of the UK takeover regime may be affected by Brexit. For the purposes of this topic area, the key change is the removal of the ability to passport a prospectus from the UK to the EEA, which may make schemes of arrangement more popular on securities exchange offers where there are offeree shareholders in the EEA. This is because it is generally accepted that the issue of new securities pursuant to a scheme of arrangement under the Companies Act 2006 will not constitute a public offer requiring a prospectus.

For further details on these and other issues, see Practice Note: Brexit—UK takeover regime.

Structuring a takeover—preliminary considerations

There are two primary methods of implementing a takeover of a UK public company:

1. •

   by way of a contractual takeover offer under the Companies Act 2006 (CA 2006), s 974 (offer)

2. •

   by way of a scheme of arrangement under CA 2006, Pt 26 (scheme)

While takeovers of a UK public company implemented under either structure are subject to the City Code on Takeovers and Mergers (Code), the two structures possess fundamentally different