Public M&A – Takeover Panel consultation paper and two new practice statements

The Takeover Panel has published a consultation paper (PCP 2025/1) on dual class share structures, IPOs and share buybacks. It has also published two new practice statements on profit forecasts and unlisted share alternatives on a takeover offer.

Consultation on dual class share structures, IPOs and share buybacks

A company with a dual class share structure (DCSS) is typically one which has, in addition to voting ordinary shares, a class of shares with an enhanced level of voting rights or control as compared to the ordinary shares, held for example by a founder. In light of the new UK Listing Rules that came into force in 2024, which allow companies with a DCSS to list in the equity shares (commercial companies) category, the Takeover Panel is consulting in PCP 2025/1 on amendments to the Takeover Code relating to DCSS companies. 

Key proposals in the consultation paper include:

Companies with a DCSS – The Panel is consulting on a new framework for DCSS companies, which will primarily be applicable to a structure where the 'founder' shares carry multiple votes per share from the point of issue, and are converted to ordinary shares or extinguished on particular trigger events, such as a “time sunset” or the retirement or resignation of a founder shareholder. The Panel is also proposing provisions to: 

• clarify the application of the mandatory offer requirement to a DCSS company where a shareholder’s percentage of voting rights is increased as a consequence of a trigger event; and
• make the acceptance condition to a contractual offer for a DCSS company subject to two tests, taking into account the voting rights position immediately before, and immediately after, the relevant founder/special shares convert or are extinguished.

IPOs – There will be new provisions requiring a company to make disclosures in respect of the Takeover Code and any controlling shareholders (and their concert parties) on an IPO, as well as a codification of the ability of the Panel to grant a “Rule 9 (mandatory offer) dispensation by disclosure” in accordance with the Panel's existing practice.

Share buybacks – The rules around share buybacks will be made clearer and the provisions on disqualifying transactions will be amended to remove the restrictions on a company carrying out a share buyback under an annual shareholder authority.

The consultation closes on 26 September 2025 and the Panel expects to publish the final rules by the end of the year, with the amendments coming into effect in the first quarter of 2026.

Practice statements

The Takeover Panel has also published two new practice statements:

Practice Statement 35 covers profit forecasts, quantified financial benefits statements (QFBS) and investment research and provides guidance on topics such as:

• the Executive’s practice where a profit forecast is published by an offeree company after the unequivocal rejection of an approach about a possible offer;
• the application of Rule 28.1 to a profit forecast that is provided privately by the offeree company to an offeror (for example, an offeror subject to US securities laws) for due diligence purposes and which is subsequently included in a document or announcement published by the offeror in connection with the satisfaction of a condition to the offer; and
• the Executive’s practice in relation to whether a forward-looking statement should be treated as an aspirational target to which Rule 28.1 does not apply

Practice Statement 36 discusses offers where the bidder is offering an unlisted share alternative as consideration. It covers which terms for an unlisted share alternative will be acceptable, the disclosure required and the share rights that are permitted.