Following last year’s negative public and union reaction to Kraft’s takeover of Cadbury, the Takeover Panel has published a consultation on proposed amendments to its Takeover Code. The changes are designed, among other things, to provide greater recognition of the interests of offeree company employees.
The Takeover Code applies to the takeover of publicly listed companies in the UK. It is designed to ensure that shareholders are treated fairly and are not denied an opportunity to decide on the merits of a takeover. Under the Code, an offeror is required to describe in the offer document its intentions and plans for the offeree company, the offeror itself (if a company) and for the employees of the respective companies.
Since most takeovers by share purchase are excluded from the scope of the TUPE Regulations the TUPE information and consultation obligations do not usually apply. The Code imposes some duties on the offeror with regard to providing information to affected employees. The proposals would make it clear that the Code does not prevent information being passed in confidence to employee representatives during the offer period. Offeree company boards would be required to inform employee representatives at the earliest opportunity of their right to circulate an opinion on the effects of the offer on employment, published and obtained at the offeree company’s expense.
This provides summary information and comment on the subject areas covered. Where employment tribunal and appellate court cases are reported, the information does not set out all of the facts, the legal arguments presented and the judgments made in every aspect of the case. Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, we cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.
