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Structuring a takeover—offers vs schemes of arrangement


Produced in partnership with Julian Henwood of Gowling WLG
Practice notes

Structuring a takeover—offers vs schemes of arrangement


Produced in partnership with Julian Henwood of Gowling WLG

Practice notes
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This Practice Note contrasts and compares the principal features of the two most commonly utilised transaction structures for the acquisition of a UK public limited company (or any other company governed by the City Code on Takeovers and Mergers (Code)), ie takeover offers and schemes of arrangement, and examines the key differences between the structures. This Practice Note includes a summary table: Key advantages and disadvantages of offers and schemes, but for a more detailed look at the advantages and disadvantages, from the offeror’s perspective, of effecting a takeover by way of a scheme of arrangement, see Practice Note: Schemes of arrangement—advantages and disadvantages.

Offers and schemes

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

  1. •

    by way of a contractual takeover offer under 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 Code, the two structures possess

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Schemes of arrangement definition
What does Schemes of arrangement mean?

A formal arrangement between the company and its creditors and/or its members (or a class of its creditors or members) pursuant to Part 26 of the Companies Act 2006 (CA 2006).

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