Statement of reasons of Takeovers Panel
Note: The following statement of reasons should be read in conjunction with the statement(s) of reasons appended to the:
The Takeovers Panel has granted exemptions for certain classes of persons, transactions, and offers from compliance with rule 6(1) of the Takeovers Code. These exemptions, which are set out in this notice, come into force on 1 July 2001. The terms and conditions of the exemptions are designed to ensure that the underlying purpose and intent of the Code is fulfilled.
The exemption in clause 4 is appropriate and is consistent with the objectives of the Code because it closely mirrors the shareholder approval mechanism, which is an exception to the fundamental rule, set out in rules 7(c) and 15 of the Code.
The exemption in clause 5 is appropriate because transactions of this type can inadvertently lead to a breach of the fundamental rule. However, the conditions of exemption ensure that the policy of the Code is complied with. The exemption is consistent with the objectives of the Code because the attaching conditions require that any increase in voting control is eliminated (wholly or, in some cases, in part only) within 6 months and that the additional voting rights are not exercised before that elimination.
The exemption in clause 6 is appropriate and is consistent with the objectives of the Code because the strict application of the Code would be unduly harsh on shareholders if a buyback results in a decrease in their voting control and they are not able to top-up. The attaching conditions restrict the top-ups to certain levels to be reached within 6 months of the decrease.
The exemption in clause 7 is appropriate because it facilitates initial public offers by companies that only become code companies as a consequence of such an offer. The exemption is consistent with the objectives of the Code because the attaching conditions ensure that it applies only to an offer that is effectively a preliminary step to a company becoming a code company.
The exemption in clause 8 is appropriate because transactions of this type can inadvertently lead to a breach of the fundamental rule. However, the conditions of exemption ensure that the policy of the Code is complied with. The exemption is consistent with the objectives of the Code because the attaching conditions require that any increase in voting control is eliminated (wholly or, in some cases, in part only) within 6 months and that the additional voting rights are not exercised before that elimination.
The exemption in clause 9 is appropriate and is consistent with the objectives of the Code because the strict application of the Code would be unduly harsh on shareholders if an allotment results in a decrease in their voting control and they are not able to top-up. The attaching conditions restrict the top-ups to certain levels to be reached within 6 months of the decrease.
The exemption in clause 10 is appropriate and is consistent with the objectives of the Code because the strict application of the Code would be unduly harsh on shareholders if an allotment results in a decrease in their voting control and they are not able to top-up. The attaching conditions restrict the top-ups to certain levels to be reached within 6 months of the decrease.
The exemption in clause 11 is appropriate because it ensures that lenders and receivers are able to hold security interests that include voting securities. This exemption is consistent with the objectives of the Code because it is limited by the attaching conditions to bona fide financial transactions that do not have a collateral purpose of enabling a person to increase the person's voting control otherwise than in compliance with the Code. The Code will still apply to dispositions of shares on the enforcement of the security.
The exemption in clause 12 is appropriate and is consistent with the objectives of the Code because it is consequential to the exemption in clause 11 and without it those exempted would be unnecessarily penalised. It is limited to a person, an associate of whom is a lender or receiver, who has the benefit of an exemption under clause 11.
The exemption in clause 13 is appropriate because it facilitates an essential feature of corporate democracy in respect of the voting of shares. The exemption is consistent with the objectives of the Code because the attaching conditions limit the exemption to the usual situation where shareholders require a proxy to vote on their behalf.
The exemption in clause 14 is appropriate and is consistent with the objectives of the Code because it is consequential to the exemption in clause 13 and without it those exempted would be unnecessarily penalised. It is limited to a person, an associate of whom is a proxy, who has the benefit of an exemption under clause 13.
The exemption in clause 15 is appropriate because it facilitates an essential feature of corporate democracy in respect of the voting of shares by companies. The exemption is consistent with the objectives of the Code because the attaching conditions limit the exemption to the usual situation where a company requires a corporate representative to vote on its behalf.
The exemption in clause 16 is appropriate and is consistent with the objectives of the Code because it is consequential to the exemption in clause 15 and without it those exempted would be unnecessarily penalised. It is limited to a person, an associate of whom is a corporate representative, who has the benefit of an exemption under clause 15.
The exemption in clause 17 is appropriate because transactions of this type can inadvertently lead to a breach of the fundamental rule. However, the conditions of exemption ensure that the policy of the Code is complied with. This exemption is consistent with the objectives of the Code because the attaching conditions require that the additional voting rights are controlled by the beneficial owner of the shares.
The exemption in clause 18 is appropriate and is consistent with the objectives of the Code because it is consequential to the exemption in clause 17 and without it those exempted would be unnecessarily penalised. It is limited to a person, an associate of whom is a sharebroker, who has the benefit of an exemption under clause 17.
The exemption in clause 19 is appropriate because transactions of this type can inadvertently lead to a breach of the fundamental rule. However, the conditions of exemption ensure that the policy of the Code is complied with. The exemption is consistent with the objectives of the Code because the attaching conditions require that any increase in voting control is eliminated (wholly or, in some cases, in part only) within 6 months and that the additional voting rights are not exercised before that elimination.
The exemption in clause 20 is appropriate because the transmission of property to executors, trustees, or administrators in accordance with the terms of a will or on an intestacy may otherwise be in breach of the fundamental rule of the Code. This exemption is consistent with the objectives of the Code because the person or persons to whom the property is transmitted are, in effect, only representing the deceased person.
The exemption in clause 21 is appropriate and is consistent with the objectives of the Code because it is consequential to the exemption in clause 20 and without it those exempted would be unnecessarily penalised. It is limited to a person, an associate of whom is an executor, trustee, or administrator, who has the benefit of an exemption under clause 20.
The exemption in clause 22 is appropriate because persons who inherit property under a will or on an intestacy may otherwise be in breach of the fundamental rule of the Code. This exemption is consistent with the objectives of the Code because the Code is not intended to inhibit the inheriting of property under a will or on an intestacy.
The exemption in clause 23 is appropriate because transactions of this type can inadvertently lead to a breach of the fundamental rule. However, the conditions of exemption ensure that the policy of the Code is complied with. The exemption is consistent with the objectives of the Code because the attaching conditions require that the additional voting rights are controlled by the beneficial owner of the shares.
The exemption in clause 24 is appropriate and is consistent with the objectives of the Code because it is consequential to the exemption in clause 23 and without it those exempted would be unnecessarily penalised. It is limited to a person, an associate of whom is a nominee company or bare trustee, who has the benefit of an exemption under clause 23.
The exemption in clause 25 is appropriate because it facilitates normal intra-group transactions. This exemption is consistent with the objectives of the Code because the attaching conditions ensure that there is no change in the ultimate control of the voting rights.
The exemption in clause 26 is appropriate and is consistent with the objectives of the Code because it reduces costs and enhances efficiency. The attaching conditions ensure that the purpose and intent of rule 47 will still be fulfilled.
Note: The preceding statement of reasons should be read in conjunction with the statement(s) of reasons appended to the: