Takeover Panel

The Panel on Takeovers and Mergers, often called the Takeover Panel, the City Panel, over even simply the Panel, is the UK's main regulator of issues connected to mergers and acquisitions. The Panel's main objective is simple: to ensure that all shareholders are treated equally during takeover bids.

The Panel's rules, the City Code on Takeovers and Mergers, regulate the takeover process. It requires, for example, that all shareholders must be given the same information, and the target company should not take any action to frustrate an offer (e.g. use poison pills) without allowing shareholders to vote on it. The Code also sets time limits for various stages of a bid and rules concerning the equality of prices paid to shareholders.

For most of its history the Panel was not a statutory body and had no actual legal powers. It functioned very effectively through industry agreement. In accordance with an EU directive, it is now a statutory body with powers to order compensation. It can also ask the courts and the FCA to enforce its rulings.

In the past, the Panel ensured compliance with the Code through discussions, by censure (private and public). With the only punishment of offenders being "cold shouldering" for a breach of the code. A cold shouldered firm would find others refusing to deal with them in order to support the authority of the Panel. This would seriously impedes the offender's ability to do business.

This system was a rather nice example of how the old fashioned British way in which the city functioned could work. The Panel intends to follow the approach used in the past, but has accepted its new powers and will presumably use them if all other measures fail.

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