UK: Takeover Panel Consults on Miscellaneous Takeover Code Amendments

What has been published?

The Takeover Panel has published a consultation (PCP 2026/1) which proposes a number of miscellaneous Takeover Code amendments, most of which codify existing Executive practice or simplify drafting. The proposals cover a variety of areas, including when voting and share restriction agreements will mean that parties are acting in concert and the application of the rules on reverse takeovers.

Key takeaways

Acting in concert and shareholder arrangements

The proposals narrow Note 5 on the definition of "acting in concert" so that it only applies to an agreement between a person interested in a company's shares and the company or its directors, restricting the person from reducing its interest in shares (and not to other types of standstill agreement), and making it clear that for the parties not to be considered to be acting in concert, the terms of the agreement should allow the person to accept or agree to accept any offer, even if not recommended by the offeree board.

The proposed changes also clarify that a voting agreement entered into by a person interested in shares to vote as the board recommends on a resolution relating to the appointment or removal of a director would normally result in that person and the directors being viewed as acting in concert.

Reverse takeovers and competing proposals

The reverse takeover definition would be broadened to cover any acquisition by a Code company requiring an increase in voting equity share capital of more than 100%, whether the target is a Code company, a non-Code company or a business and assets.

Other relevant provisions of the Code (the requirement to obtain independent advice (Rule 3.2), the provisions on frustrating action (Note 8 on Rule 21.1) and the prohibition on offer-related arrangements (Rule 21.2(b)(v)) are only relevant where the transaction in question is an offer or possible offer to which the Code applies and so are unaffected by this change.

The equality of information rules (Rule 21.3) would also extend to reverse-takeover-type transactions with non-Code counterparties competing with an existing offer. The effect would be that where, as an alternative to an offer, the target enters into discussions to acquire a non-Code company (or a business or assets) in consideration for the issue of more than 100% of its share capital, a bidder, or potential bidder, would be entitled to receive all the information the target gives to the other counterparty. This could affect information sharing and process management where an offeree is assessing competing strategic options.

Extending a PUSU deadline

The Code Committee proposes to amend Rule 2.6(c) which deals with when the Panel normally consents to an extension of the "put up or shut up" (PUSU) deadline set under Rule 2.6(a), by which a potential offeror must clarify its intentions following a possible offer announcement, to:

• Delete the factors that the Panel takes into account when deciding whether to extend the PUSU deadline for a potential offeror.
• Delete the requirement for the offeree to comment on those matters in the announcement that provides the new PUSU deadline.

The changes are proposed on the basis that the Panel Executive routinely consents to a PUSU extension when requested by the target board, given that the board will have determined that an extension is in the best interests of shareholders. The board will also normally be best placed to determine what level of detail should be included in the announcement.

Review of notes on Rule 9.1

Under the proposals, the Rule 9 Notes (discussing how the requirement in Rule 9 to make a mandatory offer for a company applies in certain situations) would be reorganised and simplified. The changes are intended to simplify the Notes or delete Notes that are obsolete. Among the changes is a proposal to move parts of Note 2 (on collective shareholder action) into Practice Statement 26 on shareholder activism but the Panel says that this is not intended to indicate a change in practice.

Other amendments

Other proposed amendments include:

Special deals and management incentivisation arrangements: Updating Rule 16 fairness opinions to refer to arrangements being fair and reasonable "so far as shareholders are concerned". This reflects current Executive practice.

Frustrating action following rejection of an approach: Clarifying when frustrating action restrictions end after unequivocal rejection of an approach.

Investment research: Amendments to Rule 28.7 to remove the requirement to take down connected investment research from a party's website at the beginning of an offer period.

Restrictions on significant asset transactions following a lapsed offer: Amendments to Note 1(a) on Rule 35.1 to clarify that where a former bidder has made an unqualified no increase statement or acceleration statement during an offer, the Panel will not normally consent to the former bidder taking restricted actions in relation to the purchase of significant assets from the target in the three months after its offer was withdrawn or lapsed.

Next steps

The consultation closes on 2 October 2026. If the proposals are adopted, for transaction teams, the main action will be to factor the proposals into early Code analysis, particularly where shareholder arrangements, reverse takeover structuring or Rule 9 issues may arise.