Striking a fair balance in UK takeover law: market interests, power of regulation, and enforcement

Abstract

In this article, the author identifies the main characteristics of the UK takeover regulatory regime, which is unique compared to other models in advanced capital markets. The principal values of the Takeover Code, the functional constitution of the Takeover Panel, the expertise-based approach to enforcement, and the minimal intervention of the judiciary help strike a fair balance among various market interests. With this model, minority shareholder’s engagement, employee’s participation, and public interest in market integrity have been addressed within the principle-based investor primacy while not destabilising the UK market for corporate control because of incumbent shareholder litigation and other regulatory actions. Of many rules, the disclosure requirement is being used to target various areas prone to abuse such as stake-building, virtual bid, deal protection arrangement, and post-takeover behaviour. The UK market has faced many cross-border takeovers and is competing with other major financial markets for corporate listings, this model has so far proven to be a resilient best market standard for takeovers.