Rugger guy and a glib and shameless share offer

I am grateful to Rugger Guy for sending me this.

As ever the analysis is his and his alone and I am merely the publisher of this expert view.

Ok here it is:



You have asked me to try and explain what the next steps would be in connection with the takeover panel ruling. I will set out some of the details and then at the end of the listing, I will summarise in layman’s terms what should be expected.


The following is a brief summary of some of the most important Rules:


When a person or group acquires interests in shares carrying 30% or more of the voting rights of a company, they must make a cash offer to all other shareholders at the highest price paid in the 12 months before the offer was announced (30% of the voting rights of a company is treated by the Code as the level at which effective control is obtained).

When interests in shares carrying 10% or more of the voting rights of a class have been acquired by an offeror (i.e. a bidder) in the offer period and the previous 12 months, the offer must include a cash alternative for all shareholders of that class at the highest price paid by the offeror in that period. Further, if an offeror acquires for cash any interest in shares during the offer period, a cash alternative must be made available at that price at least.

If the offeror acquires an interest in shares in an offeree company (i.e. a target) at a price higher than the value of the offer, the offer must be increased accordingly.

The offeree company must appoint a competent independent adviser whose advice on the financial terms of the offer must be made known to all the shareholders, together with the opinion of the board.

Favourable deals for selected shareholders are banned.

All shareholders must be given the same information.

Those issuing takeover circulars must include statements taking responsibility for the contents.

Profit forecasts, quantified financial benefits statements and asset valuations must be made to specified standards and must be reported on by professional advisers.

Misleading, inaccurate or unsubstantiated statements made in documents or to the media must be publicly corrected immediately.

Actions during the course of an offer by the offeree company which might frustrate the offer are generally prohibited unless shareholders approve these plans.

Stringent requirements are laid down for the disclosure of dealings in relevant securities during an offer.

Employees of both the offeror and the offeree company and the trustees of the offeree company’s pension scheme must be informed about an offer. In addition, the offeree company’s employee representatives and pension scheme trustees have the right to have a separate opinion on the effects of the offer on employment appended to the offeree board’s circular or published on a website.


My take on the takeover panel rules are as follows:-

Should Mr King decide to make an offer for the shares and the deadline for this is at the end of the first week in April, this mandatory offer will require that an  offer document is posted to all shareholders and  which complies with most of the rules set out above. I do not think that a profit forecast is required, however unaudited accounts are not acceptable.

In short an extensive due diligence is required by lawyers and accountants and all outstanding legal, contingency and other matters need to be disclosed, and signed off by Mr King and his advisors.

Given the ruling that a mandatory offer by Mr King alone is required, it is fair to conclude that the offer document will be examined closely.



My highly un-expert take from his last sentence is that because the offer document is being presented by a glib and shameless liar then anyone entering into this deal should proceed with caution.

Of course, we are not clear at the moment if the South African based convicted criminal will abide by the directive of the Takeover Panel.

Developing story…

Discover Phil’s dramatic play Rebellion