It may have been a Lock Out Agreement or a Closed Period but even in your reply of ; "Whereas a close period is broader, could just be results due in August". Could be , just could be something more . Cuba
I'm sure one of the questions at this years AGM was why had none of the directors not purchased shares and the response was because there was a lock out/closed period were they were not allowed to do so until this came to an end and I'm also certain the end of August was mentioned in and around 28th? Could be wrong I will have a look and post any info!!!
Where you getting this info from? There’s a difference between a lockout period and close period? Are you getting mixed up or have you a source to rumour?
The purpose of a lock-out (or exclusivity) agreement is to give a prospective buyer exclusive negotiating rights, usually for a fixed period. The lock-out may be a stand alone agreement, form part of a confidentiality agreement or be contained in a letter of intent (in which case the lock-out provisions must clearly be stated to be legally binding).
The agreement is generally worded in negative terms (for example "the seller shall not negotiate with other parties...").
A positive obligation to negotiate is not generally enforceable in certain jurisdictions, such as the UK, but may be enforceable in others. From 19 September 2011, the use of lock out agreements in UK public M&A transactions is generally prohibited under the UK Takeover Code (subject to certain limited exceptions).
A lock-out agreement should include the following terms:
The duration of the exclusivity period. This should be for a fixed period. If not, the agreement may be unenforceable.
The seller must not provide information about the target or negotiate with another prospective buyer during the lock-out period. It should also ensure that its employees and representatives do not do this.
The potential remedies for breach of a lock-out agreement are:
An injunction to prevent the seller from negotiating with another party during the lock-out period.
Damages. These are usually limited to wasted costs, rather than loss resulting from a failure to conclude a legally binding agreement (as there is no way of knowing whether the negotiations would have been successful or what would have been agreed if they continued).
In jurisdictions that recognise a duty to negotiate in good faith, signing a lock-out agreement and then, on its expiry, failing to proceed properly with negotiations could be a breach of good faith. This potentially exposes the guilty party to damages.
Whereas a close period is broader, could just be results due in August.
During a close period:
No dealings of a “short term” nature are permissible at any time. A short term dealing would be a purchase and sale within a short timescale (ie less than 12 months) designed to maximise profit from that trade. No dealings during a “close period” are permitted. A close period is, under the Company’s Code of Dealings, the period from the financial year end (or half year or quarter year end) until the publication of results.
Hi Cuba, could you please post some more info about this lock-out? I read some posts on here and iii about how one of the directors at the AGM mentioned that he (and other directors) hadn't taken advantage of the low SP buy purchasing shares, because they were in a closed period. The implications are numerous - it could have been to do with Interim results, it could be due to the fact that SA3 is supposedly flow testing, or (and personally I feel more likely) is that they have been talking to potential suitors and a potential farm-in/takeover.
But I'm curious as to whether there has been any additional information posted? Anyone shed any light on this?
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