PARAGRAPH 2 PARAGRAPH 2 SECRECY BEFORE ANNOUNCEMENTS; THE TIMING AND CONTENTS OF ANNOUNCEMENTS
2.1 SECRECY(a) Prior to the announcement of an offer or possible offer, all persons privy to confidential information, and particularly price sensitive information, concerning the offer or possible offer must treat that information as secret and may only pass it to another person if it is necessary to do so and if that person is made aware of the need for secrecy. All such persons must conduct themselves so as to minimise the chances of any leak of information.(b) Financial advisers must at the very beginning of discussions warn clients of the importance of secrecy and security. Attention should be drawn to the Takeover Rules , in particular to this Paragraph 2.1 and to restrictions on dealings.
2.2 2.2 WHEN AN ANNOUNCEMENT IS REQUIRED
An announcement is required:(a) when a firm intention to make an offer is notified to the board of the Target by or on behalf of a Bidder, irrespective of the attitude of the board to the offer;(b) immediately upon an acquisition of any interest in shares which gives rise to an obligation to make an offer under Paragraph 9.1. The announcement that an obligation has been incurred should not be delayed while full information is being obtained; additional information can be the subject of a later supplementary announcement;(c) when, following an approach by or on behalf of a potential Bidder to the board of the Target, the Target is the subject of rumour and speculation or there is an untoward movement in its share price;(d) when, after a potential Bidder first actively considers an offer but before an approach has been made to the board of the Target, the Target is the subject of rumour and speculation or there is an untoward movement in its share price and there are reasonable grounds for concluding that it is the potential Bidder's actions (whether through inadequate security or otherwise) which have led to the situation;(e) when negotiations or discussions relating to a possible offer are about to be extended to include more than a very restricted number of people (outside those who need to know in the parties concerned and their immediate advisers); or(f) when a purchaser is being sought for an interest, or interests, in shares carrying in aggregate 30% or more of the voting rights of a company or when the board of a company is seeking one or more potential Bidders, and:(i) the company is the subject of rumour and speculation or there is an untoward movement in its share price; or(ii) the number of potential purchasers or Bidders approached is about to be increased to include more than a very restricted number of people.
Guidance Notes to Paragraph 2.2
Whether or not a movement in the share price of a potential Target is untoward for the purposes of Paragraph 2.2(c), (d) and (f)(i) is a matter for the Panel to determine. The question will be considered in the light of all relevant facts and not solely by reference to the absolute percentage movement in the price. Facts which may be considered to be relevant in determining whether a price movement is untoward these purposes include general market and sector movements, publicly available information relating to the company, trading activity in the company's securities and the time period over which the price movement has occurred. This list is purely illustrative and the Panel will take account of such other factors as it considers appropriate.
2.3 RESPONSIBILITIES OF BIDDERS AND THE TARGET(a) Before a potential Bidder approaches the board of the Target, the potential Bidder is responsible for making any announcement required under Paragraph 2.2.(b) When an obligation to make a mandatory offer under Paragraph 9.1 is incurred, the Bidder is responsible for making the announcement required under Paragraph 2.2(b). See also Paragraph 7.1.(c) Following an approach to the board of the Target, the Target is responsible for making any announcement required under Paragraph 2.2, except for an announcement required under Paragraph 2.2(b) or, where a purchaser is being sought for an interest in shares carrying 30% or more of the voting rights of a company without the involvement of the board of the Target, Paragraph 2.2(f) (in which case responsibility will rest with the potential seller of the interest).(d) A potential Bidder must not attempt to prevent the board of a Target from making an announcement relating to a possible offer, or publicly identifying the potential Bidder, at any time the board considers appropriate.
2.4 THE ANNOUNCEMENT OF A POSSIBLE OFFER(a) An announcement by the Target which commences an offer period must identify any potential Bidder with which the Target is in talks or from which an approach has been received (and not unequivocally rejected).(b) Any subsequent announcement by the Target which refers to the existence of a new potential Bidder must identify that potential Bidder, except where the announcement is made after a Bidder has announced a firm intention to make an offer for the Target (see Paragraph 2.6(e)).
2.5 TERMS AND PRE CONDITIONS IN POSSIBLE OFFER ANNOUNCEMENTS(a) The Panel must be consulted in advance if, prior to the announcement of a firm intention to make an offer, any person proposes to make a statement in relation to the terms on which an offer might be made for the Target. If a potential Bidder (or its directors, officials or advisers) makes such a statement and it is not withdrawn immediately if incorrect, the potential Bidder will be bound by the statement if an offer for the Target is subsequently made, except where it specifically reserved the right not to be so bound in certain circumstances at the time the statement was made and those circumstances subsequently arise or in wholly exceptional circumstances. In particular:(i) where the statement concerned relates to the price of a possible offer (or a particular exchange ratio in the case of a possible securities exchange offer), any offer made by the potential Bidder for the Target will be required to be made on the same or better terms. Where all or part of the consideration is expressed in terms of a monetary value, the offer or that element of the offer must be made at the same or a higher monetary value. Where all or part of the consideration has been expressed in terms of a securities exchange ratio, the offer or that element of the offer must be made on the same (or an improved) securities exchange ratio; and(ii) where the statement concerned includes reference to the fact that the terms of the possible offer "will not be increased" or are "final" or uses a similar expression, the potential Bidder will not be allowed subsequently to make an offer on better terms.(b) The consequences of a statement to which Paragraph 2.5(a) applies will normally apply also to any person acting in concert with the potential Bidder and to any person who is subsequently acting in concert with the potential Bidder or such person.(c) The Panel must be consulted in advance if, prior to announcing a firm intention to make an offer, a potential Bidder proposes to announce any pre conditions to the making of an offer. Any such pre conditional possible offer announcement must:(i) clearly state whether or not the pre conditions must be satisfied before an offer can be made or whether they are waivable; and(ii) include a prominent warning to the effect that the announcement does not amount to a firm intention to make an offer and that, accordingly, there can be no certainty that any offer will be made even if the pre conditions are satisfied or waived.
2.6 TIMING FOLLOWING A POSSIBLE OFFER ANNOUNCEMENT(a) Subject to Paragraph 2.6(b), by not later than 5.00 pm on the 28th day following the date of the announcement in which it is first identified, or by not later than any extended deadline, a potential Bidder must either:(ii) announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Paragraph 2.8 applies,unless the Panel has consented to an extension of the deadline.(b) Paragraph 2.6(a) will not apply, or will cease to apply, to a potential Bidder if another Bidder has already announced, or subsequently announces (prior to the relevant deadline), a firm intention to make an offer for the Target. In such circumstances, the potential Bidder will be required to clarify its intentions in accordance with Paragraph 2.6(d) below.(c) The Panel will normally consent to an extension of a deadline set in accordance with Paragraph 2.6(a), or any previously extended deadline, at the request of the board of the Target and after taking into account all relevant factors, including:(i) the status of negotiations between the Target and the potential Bidder; and(ii) the anticipated timetable for their completion.Where the Panel consents to an extension of a deadline, the Target must promptly make an announcement setting out the new deadline and commenting on the matters referred to in paragraphs (i) and (ii) above.(d) When a Bidder has announced a firm intention to make an offer and it has been announced that a publicly identified potential Bidder might make a competing offer (whether that announcement was made prior to or following the announcement of the first offer), the potential Bidder must, by 5.00 pm on the 53rd day following the publication of the first Bidder's initial offer document, either:(ii) announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Paragraph 2.8 applies.(See Paragraph 38.4) where the first Bidder is proceeding by means of a scheme of arrangement.)(e) When a Bidder has announced a firm intention to make an offer and the Target subsequently refers to the existence of a potential competing Bidder which has not been identified, the potential competing Bidder so referred to must, by 5.00 pm on the 53rd day following the publication of the first Bidder's initial offer document, either:(ii) confirm to the Target that it does not intend to make an offer, in which case the Target must promptly announce that fact and the potential competing Bidder will be treated as if it had then made a statement to which Paragraph 2.8 applies.(See Paragraph 38.4 where the first Bidder is proceeding by means of a scheme of arrangement.)
2.7 THE ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER(a) A Bidder should announce a firm intention to make an offer only after the most careful and responsible consideration and when the Bidder has every reason to believe that it can and will continue to be able to implement the offer. Responsibility in this connection also rests on the financial adviser to the Bidder.(b) Following an announcement of a firm intention to make an offer, the Bidder must proceed to make the offer unless, in accordance with the provisions of Paragraph 13, it is permitted to invoke a pre condition to the making of the offer or would be permitted to invoke a condition to the offer if the offer were made. However, with the consent of the Panel, a Bidder need not make the offer if a competing Bidder subsequently announces a firm intention to make a higher offer.(c) When a firm intention to make an offer is announced, the announcement must state:(i) the terms of the offer;(ii) the identity of the Bidder;(iii) all conditions or pre conditions to which the offer or the making of an offer is subject;(iv) details of any agreements or arrangements to which the Bidder is party which relate to the circumstances in which it may or may not invoke or seek to invoke a pre condition or a condition to its offer and the consequences of its doing so, including details of any break fees payable as a result;(v) details of any relevant securities of the Target in which the Bidder or any person acting in concert with it has an interest or in respect of which it has a right to subscribe, in each case specifying the nature of the interests or rights concerned. Similar details of any short positions (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell, any delivery obligation or right to require another person to purchase or take delivery, must also be stated;(vi) details of any irrevocable commitment or letter of intent procured by the Bidder or any person acting in concert with it);(vii) details of any relevant securities of the Target which the Bidder or any person acting in concert with it has borrowed or lent, save for any borrowed relevant securities which have been either on lent or sold and details of any financial collateral arrangements which the Bidder or any person acting in concert with it has entered into;(viii) details of any dealing arrangement of the kind referred to in Note 11 on the definition of acting in concert to which the Bidder or any person acting in concert with it is a party;(ix) a summary of the provisions of Paragraph 8 (see the ADGM website);(x) a summary of any offer related arrangement or other agreement, arrangement or commitment permitted under, or excluded from, Paragraph 21.2; and(xi) a list of the documents published on a website in accordance with Paragraph 26.2 and the address of the website on which the documents are published.(d) Where the offer is for cash, or includes an element of cash, the announcement must include confirmation by the financial adviser or by another appropriate third party that resources are available to the Bidder sufficient to satisfy full acceptance of the offer. (The party confirming that resources are available will not be expected to produce the cash itself if, in giving the confirmation, it acted responsibly and took all reasonable steps to assure itself that the cash was available.)
2.8 STATEMENTS OF INTENTION NOT TO MAKE AN OFFER
A person making a statement that he does not intend to make an offer for a company should make the statement as clear and unambiguous as possible. Except with the consent of the Panel, neither the person making the statement, nor any person who acted in concert with that person, nor any person who is subsequently acting in concert with either of them, may within six months from the date of the statement:(a) announce an offer or possible offer for the Target (including a partial offer which would result in the Bidder and persons acting in concert with it being interested in shares carrying 30% or more of the voting rights of the Target);(b) acquire any interest in shares of the Target if any such person would thereby become obliged under Paragraph 9 to make an offer;(c) acquire any interest in, or procure an irrevocable commitment in respect of, shares of the Target if the shares in which such person, together with any persons acting in concert with him, would be interested and the shares in respect of which he, or they, had acquired irrevocable commitments would in aggregate carry 30% or more of the voting rights of the Target;(d) make any statement which raises or confirms the possibility that an offer might be made for the Target; or(e) take any steps in connection with a possible offer for the Target where knowledge of the possible offer might be extended outside those who need to know in the potential Bidder and its immediate advisers.
Failure to comply with this Paragraph may lead to the period of six months referred to above being extended.
2.9 ANNOUNCEMENT OF AN OFFER OR POSSIBLE OFFER TO BE PUBLISHED VIA THE ADGM WEBSITE(a) When an offer or possible offer is announced, the announcement must be published in typed format and sent to the Panel for publication on the ADGM website by fax or electronic delivery.(b) If the announcement is published outside the Panel's normal business hours, it must be submitted as required, for release as soon as possible.(c) The requirements under (a) and (b) above are in addition to any other announcement obligation to which the Bidder may be subject.
2.10 ANNOUNCEMENT OF NUMBERS OF RELEVANT SECURITIES IN ISSUE
When an offer period begins, the Target must announce, as soon as possible and in any case by 7.15 am on the next business day, details of all classes of relevant securities issued by the company, together with the numbers of such securities in issue. A Bidder or publicly identified potential Bidder must also announce the same details relating to its relevant securities as soon as possible and in any case by 7.15 am on the business day following any announcement identifying it as a Bidder or potential Bidder, unless it has stated that its offer is likely to be solely in cash.
Any such announcement should include, where relevant, the International Securities Identification Number ("ISIN") for each relevant security.
If the information included in an announcement made under this Paragraph changes during the offer period, a revised announcement must be made as soon as possible.
2.11 IRREVOCABLE COMMITMENTS AND LETTERS OF INTENT(a) During an offer period, if any party to the offer or any person acting in concert with it procures an irrevocable commitment or a letter of intent, the relevant party to the offer must publicly disclose the details in accordance with Guidance Notes issued under this Paragraph 2.11 by no later than 12 noon on the following business day.(b) If any party to an offer or any person acting in concert with it has procured an irrevocable commitment or a letter of intent prior to the commencement of the offer period, it must publicly disclose the details in accordance with Guidance Notes issued under this Paragraph 2.11 by no later than 12 noon on the business day following either the commencement of the offer period or (in the case of a Bidder) the date of the announcement that first identifies the Bidder as such (as appropriate).(c) If a person who has given an irrevocable commitment or a letter of intent either becomes aware that he will not be able to comply with the terms of that commitment or letter or no longer intends to do so, that person must:(i) promptly announce an update of the position together with all relevant details; or(ii) promptly notify the relevant party to the offer and the Panel of the up to date position. Upon receipt of such a notification, the relevant party to the offer must promptly make an appropriate announcement of the information notified to it together with all relevant details.(d) See also Guidance Note 9 on the definition of acting in concert.