Editing Takeover (section)

== Mechanics ==

=== In the United Kingdom ===
Takeovers in the UK (meaning acquisitions of public companies only) are governed by the [[City Code on Takeovers and Mergers]], also known as the 'City Code' or 'Takeover Code'. The rules for a takeover can be found in what is primarily known as 'The Blue Book'. The Code used to be a non-statutory set of rules that was controlled by city institutions on a theoretically voluntary basis. However, as a breach of the Code brought such reputational damage and the possibility of exclusion from city services run by those institutions, it was regarded as binding. In 2006, the Code was put onto a statutory footing as part of the UK's compliance with the [[Takeover Directive|European Takeover Directive]] (2004/25/EC).<ref>{{CELEX|32004L0025|format=PDF|text=Directive 2004/25/EC of the European Parliament and of the Council of 21 april 2004 on takeover bids}}</ref>

The Code requires that all shareholders in a company should be treated equally. It regulates when and what information companies must and cannot release publicly in relation to the bid, sets timetables for certain aspects of the bid, and sets minimum bid levels following a previous purchase of shares.

In particular:
* a shareholder must make an offer when its shareholding, including that of parties acting in concert (a "[[concert party (business)|concert party]]"), reaches 30% of the target;
* information relating to the bid must not be released except by announcements regulated by the Code;
* the bidder must make an announcement if rumour or speculation have affected a company's share price;
* the level of the offer must not be less than any price paid by the bidder in the twelve months before the announcement of a firm intention to make an offer;
* if shares are bought during the offer period at a price higher than the offer price, the offer must be increased to that price;

The Rules Governing the Substantial Acquisition of Shares, which used to accompany the Code and which regulated the announcement of certain levels of shareholdings, have now been abolished, though similar provisions still exist in the [[Companies Act 1985]].