IoD reacts to review of Takeover Code

Dated: 21 October 2010

Commenting on the proposals outlined today by the Takeover Panel, Roger Barker, Head of Corporate Governance at the Institute of Directors, said:

“We broadly welcome the approach the Panel has taken – it has erred on the side of caution and not supported some of the more radical options. Raising the threshold for acceptance of hostile bids from 50 per cent plus 1, or depriving certain shareholders of their voting rights would have been mistaken.

“However, we are disappointed that the Panel has not supported our proposal that all bids for major UK listed companies should be conditional on achieving the support of the shareholders of the acquiring company. We still believe this would be in the interests of shareholders and would increase the legitimacy of takeover activity in the eyes of employees and other parties with a stake.

He added:

“The Takeover Code must continue to support the UK as a leading destination for foreign investment and as a leading location for corporate HQs and operations. It would be undesirable for takeover policy to be perceived as a pretext for protectionism, as part of an industrial strategy, or as the outcome of a political lobbying process. For these reasons, we are opposed to a new public interest test for takeovers and we will make this point to Vince Cable’s wider review into Corporate Governance.”

ENDS

Contact Points

Edwin Morgan
Media Relations Manager
Institute of Directors, 116 Pall Mall, London SW1Y 5ED
Tel: +44 (0)20 7451 3392
Mob: +44 (0)7814 386 243
Email: edwin.morgan@iod.com
Website: www.iod.com/policy

Notes to editors

  • The IoD (Institute of Directors) was founded in 1903 and obtained a Royal Charter in 1906. The IoD is a non-party political organisation with upwards of 45,000 members in the United Kingdom and overseas. Membership includes directors from right across the business spectrum – from media to manufacturing, e-business to the public and voluntary sectors. Members include CEOs of large corporations as well as entrepreneurial directors of start-up companies.
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  • In addition, the IoD provides an effective voice to represent the interests of its members to government and key opinion-formers at the highest levels. These include ministers, constituency MPs, Select Committee members and senior civil servants. IoD policies and views are actively promoted to the national, regional and trade media.
  • For further information, visit our website: www.iod.com
  • You can also keep up to date with the latest views from the IoD on twitter.com/The_IoD and at blogs.iod.com