No appetite for M&A reform?

In the run-up to the general election, the rules governing takeovers became a minor political story. After the anger at the Kraft-Cadbury deal, both Labour and the Lib Dems floated proposals to tighten up the UK’s regime.

Subsequently the Takeover Panel initiated its own review which closed at the end of July. Amongst the proposals on which the Panel consulted were raising the threshold required for a bid to go through, restricting voting rights to those that owned shares at the time a bid was made public, and improving the protection for shareholders in the offeror company.

However if a couple of notable submissions to the Panel are anything to go by, we shouldn’t expect a radical overhaul. Both Standard Life Investments and the Institute of Directors have made their comments to the Panel publicly available, and there is considerable common ground. Both reject the two proposals that politicians seemed to favourt most - an increased threshold for bids to pass, and restricting voting on deals to longer-term investors.

Oddly though the IoD’s position on an increased threshold seems to have gone through a rather abrupt u-turn. Back in April the lobby group stated: “we agree with the Government that the threshold for approval of a hostile takeover should be raised to a shareholder majority of two-thirds.“

Now it states: “we are not convinced that raising the acceptance threshold for a takeover offer is the best way to tackle investor passivity”.