All change for the UK Takeover Code

Market participants may need to give even more significant thought to the employment and pensions aspects of takeovers in the UK.

28 September 2016

Recent statements made at the Labour Party Conference suggest that market participants may in the future need to give even more significant thought to the employment and pensions aspects of takeovers in the United Kingdom.

John McDonnell, Shadow Chancellor of the Exchequer, said on Monday 26 September, that "we’ll rewrite the Takeover Code to make sure every takeover proposal has a clear plan in place to pay workers and pensioners.”

So while most practitioners familiarise themselves with the changes introduced by RS 2016/1 (the communication and distribution of information during an offer), more radical changes to the Code may be on the horizon.  It seems that the following have been judged by some as not providing sufficient protection for workers and pensioners:

  • the current Code provisions covering employee representatives and pension scheme trustees
  • the post-offer undertaking regime (see Rule 19.7 of the Code), used for the first time on the recent takeover of Arm Holdings by Softbank.

Further information on the changes introduced by RS 2016/1 can be found in our recent takeover code update.

The post-offer undertakings given by Softbank included a specific undertaking to double the total number of UK ARM Group employees over a five year period.

If you would like to discuss this topic or would like any further information on Takeovers in the UK please contact Nick Graves, Rupert Weston or Chris Godfrey.

Key contact

Nick Graves

Nick Graves Partner

  • Head of Corporate
  • Corporate Advice
  • Mergers and Acquisitions
  • Reorganisations and Demergers

Subscribe to news and insight

Burges Salmon careers

We work hard to make sure Burges Salmon is a great place to work.
Find out more