FSP takeover panel conduct4 Jan 2021 17:20
Practice Statement No. 31 states that the above dispensations will only be granted in situations where the offeree board “is genuinely putting a company up for sale”. This means that where a company is conducting a FSP as part of a strategic review, the Panel Executive will consider granting the dispensations referred to above only “if a sale of the company is genuinely being explored by the board as a possible outcome of a strategic review”. As such, a draft of an announcement initiating a FSP (or a strategic review which incorporates a FSP) has to be submitted to the Panel Executive for review and will also need to:
include the phrase “formal sale process” in the heading with the text of the announcement making it clear that a FSP is being commenced; and
explain how the FSP will be conducted, including:
who an interested party should contact if it wishes to participate;
what documentation an interested party will be required to enter into in order to participate;
an indicative timetable for the FSP (or a commitment by the offeree to make a further announcement in relation to the timetable for the FSP);
confirm whether the offeree is in discussions with, or is in receipt of an approach from, any potential offeror at the date of the announcement; and
explain that the Panel has granted a dispensation from Rules 2.4(a), 2.4(b) and 2.6(a) (as referred to above).
In practice, these requirements will likely not have a significant impact as the majority of announcements initiating formal sale processes or strategic reviews (incorporating formal sale processes) generally comply with the above requirements in any event. Practice Statement No. 31 therefore seeks to codify existing practice in this respect. It remains to be seen whether the Panel Executive will require any additional detail in respect of any of the above content requirements to be included than is currently the case.
Practice Statement No. 31 also states that the offeree company will need to announce updates on the progress of the FSP, as appropriate, and, if it decides not to proceed with the FSP, to announce that fact promptly.
No news is not bad news as some are gleefully and dishonestly inferring.
GLA
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