• PARAGRAPH 12 PARAGRAPH 12 PRE-CONDITIONS IN FIRM OFFER ANNOUNCEMENTS AND OFFER CONDITIONS

    • 12.1 SUBJECTIVITY

      An offer must not normally be subject to conditions or pre-conditions which depend solely on subjective judgments by the Bidder or the Target (as the case may be) or, in either case, its directors or the fulfillment of which is in their hands. The Panel may be prepared to accept an element of subjectivity in certain circumstances where it is not practicable to specify all the factors on which satisfaction of a particular condition or pre-condition may depend, especially in cases involving official authorisations or regulatory clearances, the granting of which may be subject to additional material obligations for the Bidder or the Target (as the case may be).

    • 12.2 ACCEPTABILITY OF PRE-CONDITIONS

      The Panel must be consulted in advance if a person proposes to include in an announcement any pre-condition to which the making of an offer will be subject.

      Except with the consent of the Panel, an offer must not be announced subject to a precondition unless the pre-condition involves a material official authorisation or regulatory clearance relating to the offer and:

      (i) the offer is publicly recommended by the board of the Target; or
      (ii) the Panel is satisfied that it is likely to prove impossible to obtain the authorisation or clearance within the Takeover Rules timetable.

    • 12.3 FINANCING CONDITIONS AND PRE-CONDITIONS

      (a) Subject to Paragraph 12.3(b) and (c), an offer must not be made subject to a condition or pre-condition relating to financing.
      (b) Where the offer is for cash, or includes an element of cash, and the Bidder proposes to finance the cash consideration by an issue of new securities, the offer must be made subject to any condition required, as a matter of law or regulatory requirement, in order validly to issue such securities or to have them listed or admitted to trading. Conditions which will normally be considered necessary for such purposes include:
      (i) the passing of any resolution necessary to create or allot the new securities and/or to allot the new securities on a non-pre-emptive basis (if relevant); and
      (ii) where the new securities are to be admitted to listing or to trading on any investment exchange or market, any necessary listing or admission to trading condition (see also Paragraph 23.10).
      Such conditions must not be waivable and the Panel must be consulted in advance.
      (c) In exceptional cases, the Panel may be prepared to accept a pre-condition relating to financing either in addition to another pre-condition permitted by Paragraph 12.2 or otherwise, for example where, due to the likely period required to obtain any necessary material official authorisation or regulatory clearance, it is not reasonable for the Bidder to maintain committed financing throughout the offer period. In such a case:
      (i) the financing pre-condition must be satisfied (or waived), or the offer must be withdrawn, within 21 days after the satisfaction (or waiver) of any other precondition or pre-conditions permitted by Paragraph 12.2; and
      (ii) the Bidder and its financial adviser must confirm in writing to the Panel before announcement of the offer that they are not aware of any reason why the Bidder would be unable to satisfy the financing pre-condition within that 21 day period.
      (d) If, at any time, the Bidder or its financial adviser becomes aware, or considers it likely, that the Bidder would be unable to satisfy a financing pre-condition, it must promptly notify the Panel.

    • 12.4 INVOKING CONDITIONS AND PRE-CONDITIONS

      (a) A Bidder should not invoke any condition or pre-condition so as to cause the offer not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the condition or pre-condition are of material significance to the Bidder in the context of the offer. The acceptance condition is not subject to this provision.
      (b) Following the announcement of a firm intention to make an offer, a Bidder should use all reasonable efforts to ensure the satisfaction of any conditions or pre-conditions to which the offer is subject.

    • 12.5 INVOKING TARGET PROTECTION CONDITIONS

      A Target should not invoke, or cause or permit the Bidder to invoke, any condition to an offer unless the circumstances which give rise to the right to invoke the condition are of material significance to the shareholders in the Target in the context of the offer.