• PARAGRAPH 24 PARAGRAPH 24 TARGET BOARD CIRCULARS

    • 24.1 24.1 THE TARGET BOARD CIRCULAR

      (a) The board of the Target must, normally within 14 days of the publication of the offer document, send a circular to shareholders in the Target and persons with information rights, in accordance with Paragraph 29.1. At the same time, the Target must make the circular readily available to its employee representatives (or, where there are no employee representatives, to the employees themselves).
      (b) On the day of publication, the Target must:
      (i) publish the Target board circular on a website in accordance with Paragraph 25.1; and
      (ii) send to the Panel for publication on the ADGM website an announcement that the Target board circular has been so published.

      • Guidance on Paragraph 24.1

        Where there is no separate Target board circular

        Where the Target board circular is combined with the offer document, Paragraph 24.1 will not apply. However, Paragraphs 24.2 to 24.9 will apply to the combined document.

    • 24.2 VIEWS OF THE TARGET BOARD ON THE OFFER, INCLUDING THE BIDDER'S PLANS FOR THE COMPANY AND ITS EMPLOYEES

      (a) The Target board circular must set out the opinion of the board on the offer (including any alternative offers) and the board's reasons for forming its opinion and must include its views on:
      (i) the effects of implementation of the offer on all the company's interests, including, specifically, employment; and
      (ii) the Bidder's strategic plans for the Target and their likely repercussions on employment and the locations of the Target's places of business, as set out in the offer document pursuant to Paragraph 23.2.
      (b) In addition, the circular must include the substance of the advice given to the board of the Target by the independent adviser appointed under Paragraph 3.1.

    • 24.3 FINANCIAL AND OTHER INFORMATION

      The Target board circular must contain a description of any known significant change in the financial or trading position of the Target which has occurred since the end of the last financial period for which audited accounts, a preliminary statement of annual results, a half yearly financial report or interim financial information has been published, or provide an appropriate negative statement.

    • 24.4 INTERESTS AND DEALINGS

      (a) The Target board circular must state:
      (i) details of any relevant securities of the Bidder in which the Target or any of the directors of the Target has an interest or in respect of which it or he has a right to subscribe, in each case specifying the nature of the interests or rights concerned (see Paragraph 8.8). 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 or any delivery obligation or right to require another person to purchase or take delivery, must also be stated;
      (ii) the same details as in (i) above in respect of any relevant securities of the Target in relation to each of:
      (a) the directors of the Target;
      (b) any other person acting in concert with the Target; and
      (c) any person with whom the Target or any person acting in concert with the Target has an arrangement of the kind referred to in Note 11 on the definition of acting in concert;
      (iii) in the case of a securities exchange offer, the same details as in (i) above in respect of any relevant securities of the Bidder in relation to each of the persons listed in (ii)(b) and (c) above;
      (iv) details of any relevant securities of the Target and (in the case of a securities exchange offer only) the Bidder which the Target or any person acting in concert with the Target has borrowed or lent (including for these purposes any financial collateral arrangements of the kind contemplated by Paragraph 4.6), save for any borrowed shares which have been either on lent or sold; and
      (v) whether the directors of the Target intend, in respect of their own beneficial shareholdings, to accept the offer (and, if there are alternative offers, and if so required by the Panel, which alternative they intend to elect for) or to reject the offer.
      (b) If, in the case of any of the persons referred to in Paragraph 24.4(a), there are no interests or short positions to be disclosed, this fact should be stated. This will not apply to category (a)(ii)(c) if there are no such arrangements.
      (c) If any person referred to in Paragraph 24.4(a)(i) has dealt in any relevant securities of the Target or the Bidder between the start of the offer period and the latest practicable date prior to the publication of the circular, the details, including dates, must be stated (see Paragraph 8.8). If any person referred to in Paragraph 25.4(a)(ii)(b) to (c) has dealt in relevant securities of the Target (or, in the case of a securities exchange offer only, the Bidder) during the same period, similar details must be stated. In all cases, if no such dealings have taken place this fact should be stated.

    • 24.5 DIRECTORS' SERVICE CONTRACTS

      (a) The Target board circular must contain particulars of all service contracts of any director or proposed director of the Target with the company or any of its subsidiaries. If there are none, this should be stated.
      (b) If any such contracts have been entered into or amended within 6 months of the date of the document, particulars must be given in respect of the earlier contracts (if any) which have been replaced or amended as well as in respect of the current contracts. If there have been none, this should be stated.

    • 24.6 ARRANGEMENTS IN RELATION TO DEALINGS

      The Target board circular must disclose any arrangements of the kind referred to in Note 11 on the definition of acting in concert which exist between the Target, or any person acting in concert with the Target, and any other person; if there are no such arrangements, this should be stated.

    • 24.7 OTHER INFORMATION

      The Target board circular must contain:

      (a) a summary of the principal contents of each material contract (not being a contract entered into in the ordinary course of business) entered into by the Target or any of its subsidiaries during the period beginning two years before the commencement of the offer period, including particulars of dates, parties, terms and conditions and any consideration passing to or from the Target or any of its subsidiaries;
      (b) details of any irrevocable commitment or letter of intent which the Target or any person acting in concert with it has procured in relation to relevant securities of the Target (or, if appropriate, the Bidder);
      (c) a list of the documents which the Target has published on a website in accordance with Paragraphs 25.2 and 25.3 and the address of the website on which the documents are published; and
      (d) any profit forecast or quantified financial benefits statement and any related reports or confirmations required by Paragraph 27.

    • 24.8 FEES AND EXPENSES

      The Target board circular must contain an estimate of the aggregate fees and expenses expected to be incurred by the Target in connection with the offer and, in addition, separate estimates of the fees and expenses expected to be incurred in relation to the matters specified in paragraphs (ii) to (vii) of Paragraph 23.16(a). The other provisions of Paragraph 23.16 and also apply as if references to the Bidder were references to the Target.