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Editor: Brian JM Quinn
Boston College Law School

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Friday, March 5, 2010

Takover Panel to Take Step Backwards?

Last week I noted that there appeared to be some blow-back from Kraft's successful acquisition of Cadbury's.  The former Chairman of Cadbury made a speech in which he called for changes to the rules of the Takeover Panel to ensure that the interests of long-term (read: British) shareholders are not sacrificed to the interests of short-term (read: foreign) shareholders.  The British Trade Minister supplied some supportive words and wouldn't you know it -- the next day, the Takeover Panel announced that it will formally review its rules: 

The Code is not concerned with the financial or commercial advantages or disadvantages of a takeover. These are matters for the company and its shareholders. Nor does the Code deal with issues, such as competition policy, which are the responsibility of government and other bodies.
...however...
In the light of recent commentary and public discussion, and suggestions for consideration from the Secretary of State for Business, Innovation and Skills and others, the Code Committee has decided to initiate a consultation to consider whethercertain Code provisions and the timetable for determining the outcome of offers could usefully be improved.

The situation is not helped at all by Kraft's moving with "indecent haste" to cut jobs in the UK.    This after pledging just a couple of months ago to add jobs to a post-merger Cadbury.  Of course, Kraft isn't all that concerned with the takeover rules it leaves behind once it has accomplished its transaction.  Although they will be dragged before Parliament to explain themselves.

After the Takeover Panel announced its new consultation on proposed rule changes, it also announced that Peter Kiernan, Managing Director of Lazard (London) who was to begin his term as Director General of the Takeover Panel would not do so for the time-being.
The secondment of Peter Kiernan as Director General was due to commence on 1 March. However, pending completion of some ongoing matters, it has been agreed that his appointment as Director General should be deferred.

Might it have anything to do with the fact that Kiernan advised Kraft in its acquisition of Cadbury?  I dunno. Maybe.

It's hard to know which way this will go and what the results of all this movement will be with respect to the Takeover Panel's rules.  It's worth watching, though.

Oh, and not to be forgotten - some of our friends at the Takeovers Panel down-under are taking advantage of this opportunity and the panel's 10th anniversary to urge it to reconsider its own rules.  Keep an eye on that as well.

-bjmq
  

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