Takeover Code - Proposed Changes to Treatment of Dividends

Wednesday, 20th May 2015

Proposed changes are:

1. Unless a specific reservation is made to the contrary in a bidder''s no increase statement regarding its offer, any subsequent dividend paid by the target will result in the offeror having to reduce its offer by the amount of that dividend.

2. Other bidders will usually need to have reserved the right in any statement they have made in connection to a possible offer, their firm offer announcement and also the offer document if they also wish to be able to lower their offer by the amount of any subsequent dividend paid by the target.

Whereas, the Takeover Code currently only deals with a situation where shareholders are entitled to dividends, the proposed changes are also intended to clarify what happens where shareholders are not entitled to dividends plus the offer consideration.

For more information visit our Equity Capital Markets page here.