UK Takeover Panel consults on miscellaneous changes to the Takeover Code

The proposals cover a range of topics including when voting and share restriction agreements will mean parties are acting in concert and the application of the rules on reverse takeovers

The Takeover Panel has published a consultation paper (PCP 2026/1) on a range of miscellaneous amendments to the Takeover Code. The Panel says that the proposals are intended to clarify and simplify provisions, codify aspects of Panel Executive's practice and update provisions so that the Code continues to operate clearly and effectively.

The areas on which the Panel is consulting include the following:

Agreements restricting reductions of interests in shares and voting agreements

The Panel is proposing to set out how the definition of acting in concert applies to agreements restricting reductions of interests in shares and voting agreements.

• Agreements restricting reductions of interests in shares – The Panel will clarify that agreements between a company/its directors and a shareholder that restrict the shareholder from reducing its interests in shares will normally mean that person is considered to be acting in concert with the directors (because the directors know that the shares cannot be transferred to an "unfriendly" party). However, if the shareholder is not restricted from accepting, or agreeing to accept, an offer, the shareholder will no longer be presumed to be acting in concert with the directors (because the shareholder could agree to accept a hostile offer).
• Voting agreements – The Panel is intending to codify that an agreement that requires a person to vote as the board recommends on any resolution relating to the appointment and removal of directors will normally lead to that person and the directors being considered to be acting in concert. The Panel will not normally consider a shareholder and the directors to be acting in concert if the terms of the agreement are limited to restricting the shareholder from voting in favour of any resolution to which the directors are opposed, and against any resolution of which the directors are supportive.

Reverse takeovers

The rules on reverse takeovers in the Code currently only apply to a transaction where a Code company is (i) acquiring another Code company and (ii) may need to increase its share capital by more than 100% as a result. The Panel is proposing to amend the definition of reverse takeover so that it includes any acquisition by a Code company where it may issue more than 100% of its share capital as consideration – it would no longer be confined to an acquisition of a Code company.

This amendment would mean that, if a target announced such an acquisition, a person would be able to set aside a Rule 2.8 statement, and the Panel would consent to Rule 35.1 restrictions being set aside.

The other Code provisions which apply on a reverse takeover (a requirement to obtain independent advice (Rule 3.2), the provisions on frustrating action (Note 8 on Rule 21.1) and the prohibition on offer-related arrangements (Rule 21.2(b)(v)) are only relevant where the transaction in question is an offer or possible offer to which the Code applies and so are unaffected by this change.

The Panel is also proposing to apply Rule 21.3 (on equality of information) to reverse takeovers. This would mean that where, as an alternative to an offer, the target enters into discussions to acquire a non-Code company (or a business or assets) in consideration for the issue of more than 100% of its share capital, a bidder, or potential bidder, would be entitled to receive all the information the target gives to the other counterparty.

Extending a PUSU deadline

Currently Rule 2.6(c) sets out the factors which the Panel will take into account when deciding whether to consent to the extension of a “put up or shut up” (PUSU) deadline. It also requires the target board to comment on those factors in any announcement of a PUSU extension.

The Panel is proposing to delete those requirements on the basis that the Panel Executive routinely consents to a PUSU extension when requested by the target board on the basis that the board will have determined that an extension is in the best interests of shareholders. The board will also normally be best placed to determine what level of detail should be included in the announcement.

Other changes

• Notes on Rule 9.1 – The Panel is consulting on various amendments to the Notes on Rule 9 (which discuss how the requirement in Rule 9 to make a mandatory offer for a company applies in certain situations). The changes are not substantive but instead are intended to simplify the Notes or delete Notes that are obsolete. Among the changes is a proposal to move parts of Note 2 (on collective shareholder action) into Practice Statement 26 on shareholder activism but the Panel says that this is not intended to indicate a change in practice.
• Special deals and management incentivisation – When an independent adviser gives a fair and reasonable opinion in relation to a special deal or management incentivisation arrangements under Rule 16 of the Code, the opinion will have to say it is fair and reasonable “so far as shareholders are concerned”.
• End of restrictions on frustrating action after the unequivocal rejection of an approach – New rules would clarify that restrictions on frustrating action fall away seven days following the unequivocal rejection of an approach by an unidentified potential offeror.
• Publication of investment research on a website – The requirement to remove investment research published by a connected adviser from a party’s website at the beginning of an offer period would be deleted. If a consensus forecast includes a forecast by a firm that is connected to the relevant party, the relationship between the party and the firm would have to be disclosed.
• Restrictions on significant asset transactions following a lapsed offer – The Panel is proposing to amend Note 1(a) on Rule 35.1 to clarify that, in line with the position following a “no intention to bid” statement made under Rule 2.8, the Panel will not normally allow a former bidder which had made an unqualified no increase statement or acceleration statement to purchase, agree to purchase or indicate it may purchase significant assets from the target in the three months after its offer was withdrawn or lapsed.

The consultation closes on 2 October 2026.