IRELAND: Takeover Panel Proposals to amend the Takeover Rules and the Substantial Acquisition Rules

Tuesday December 28 2021

The Irish takeover Panel has published a consultation setting out proposals to amend the Irish Takeover Panel Act 1997, Takeover Rules, 2013 (the “Rules”) and the Irish Takeover Panel Act 1997, Substantial Acquisition Rules, 2007 (the “SARs”).

The primary purpose of the proposed amendments to the Rules and the SARs is to update them to take into account developments in takeover practice and changes in relevant legislation that have occurred since the Rules and the SARs were published.

In undertaking its review of the Rules, the Panel has considered amendments made to the Takeover Code by the Panel on Takeovers and Mergers in the UK (the “Code”) in recent years and the vast majority of the proposed amendments to the Rules reflect changes that have been made to the Code during this period.

Rule 8 Disclosure of dealings during the offer period

Disclosure of positions

The current disclosure regime under the Rules is based on “dealings” undertaken by persons subject to the regime and not “positions” held by them. In order to provide greater transparency as to where voting control of relevant securities lies it is proposed, in line with the Code, to introduce a requirement for certain parties to make a public opening position disclosure disclosing their positions.

Under the current Rule 8.1, all dealings in relevant securities (other than the securities of a cash offeror) during an offer period by an offeror or the offeree or by any party acting in concert with them are required to be publicly disclosed. Such a dealing disclosure will also include disclosure of long interests and short positions in the relevant securities in which the dealing took place.

Under the current Rule 8.3, a person who has a gross long interest of 1% or more in any class of relevant securities of the offeree or a securities exchange offeror is required to disclose all dealings (including their long interests and short positions) in the relevant securities of that party. However, if a person subject to Rule 8.3 does not deal in the relevant securities of the offeree or the offeror, they will be under no obligation to make a disclosure under the Rules in relation to their interests and short positions in that party’s relevant securities. This is the case regardless of the extent of the person’s interests in the relevant securities of that party. Furthermore, Rule 8.3 does not currently require a person to disclose their dealings or positions in the relevant securities of any party to the offer in whose relevant securities they have a long interest of less than 1%.

Under the current Rule 38.5 an exempt principal trader which does not benefit from recognised intermediary status (either because it does not have recognised intermediary status or because it does have recognised intermediary status but is not acting in a client-serving capacity) is required to disclose its long interests and short positions in the relevant securities of the offeree or a securities exchange offeror following a dealing in any relevant securities of that party. If such an exempt principal trader does not deal in the relevant securities of a party to the offer, it will be under no obligation to make a disclosure under the Rules in relation to its interests and short positions in that party’s relevant securities.

In view of the above, the Panel is proposing that a public opening position disclosure, containing details of any interests or short positions in any relevant securities of the offeree and any securities exchange offeror, should be made shortly after the commencement of an offer period and, if later, after an announcement that first identifies an offeror, by the following persons:

• the offeree;
• a securities exchange offeror (after its identity is first publicly announced);
• any person who is interested in 1% or more of any class of relevant securities of the offeree or a securities exchange offeror; and
• exempt principal traders connected with an offeror or the offeree which do not benefit from recognised intermediary status. (The disclosure requirements for exempt principal traders are set out in Rule 38.)

A person with an obligation to make an opening position disclosure must disclose details of all relevant securities, including short positions, of the offeree or any securities exchange offeror in which it has an interest.

It is also proposed to amend Rule 8.3 to require any person who has a gross long interest of 1% or more in any class of relevant securities of the offeree or a securities exchange offeror to disclose any dealings in the relevant securities not only of that party but also of any other party to the offer (other than a cash offeror). The Panel is of the view that the latter combined with the opening position disclosure requirement will ensure that persons making disclosures under the new Rules will provide a more complete picture of their long interests and short positions in relevant securities.

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