This Practice Statement, published by the Takeover Panel on January 8, 2018, considers the application of Rule 21.1(a) of the Takeover Code where the board of an offeree company has received, and subsequently unequivocally rejected, an approach and does not know whether the potential offeror continues to be interested in making an offer. This raises the question of whether, and if so for how long, the offeree company board should then be considered to have reason to believe that a bona fide offer might be imminent. Rule 21.1(a) provides that where the offeree company board has reason to believe a bona fide offer might be imminent, the board cannot, without shareholder approval, take any frustrating action or certain specific actions described in the Rule.
The Practice Statement makes it clear that the Panel Executive normally considers that Rule 21.1(a) will continue to apply until 5pm on the second business day following the date on which the approach was unequivocally rejected unless before that time the rejected potential offeror has given the offeree company board reason to believe that it continues to be interested in making an offer. It also notes that the Panel Executive should be consulted if the offeree company board intends to take any action described in Rule 21.1(a) following the unequivocal rejection of an approach.
(Takeover Panel, Practice Statement No. 32, 08.01.17)