Takeover Panel relinquishes its right to regulate offers for Irish companies in favour of the new Irish Takeover Panel

The London Takeover Panel has relinquished its right to regulate offers for Irish companies in favour of the new Irish Takeover Panel

"Directors of Irish companies involved in takeovers may need to become more conscious of their fiduciary duties and responsibilities in takeover situations ..."

As a consequence of the formal separation of the Irish Stock Exchange from the London Stock Exchange in December 1995, the Irish Dail has enacted the Irish Takeover Panel Act 1997 (the "Act"). The Act, provides for the formation of a statutory Irish Takeover Panel ("Panel") to monitor and supervise takeovers of certain Irish companies. Broadly speaking, these are defined as companies whose shares are listed on "prescribed exchanges": the Irish Stock Exchange, the new Developing Company Market and the Exploration Market, as well as companies whose shares are traded on a prescribed exchange during the five year period preceding the date of the offer. The Panel commenced operations on 1 July 1997.

The Panel's responsibilities will include supervision of takeovers, partial offers, substantial acquisitions of shares, and other transactions where "control" of a company (a holding of 30% or more of the voting rights in that company) is acquired.

The London Takeover Panel announced on 27 June 1997 that, unless a firm intention to make an offer for a relevant Irish company was published by midnight on 30 June 1997, the London Takeover Panel would thereafter cease to be the regulatory authority in respect of offers for Irish companies.

Directors of Irish companies involved in takeovers may need to become more conscious of their fiduciary duties and responsibilities in takeover situations, as shareholders may rely on the Act to establish that there has been a breach of the duties owed to them, and maybe seek personal redress from the directors.

It is interesting to note that the placing of the London Takeover Panel's functions on a statutory footing is widely opposed in the City. This is on the basis that incorporating general principles designed to be interpreted in a purposive and flexible manner in a statute would require them to be interpreted and applied strictly. This would enable bidders and targets to seek judicial review of the London Takeover Panel's decisions with greater ease than they currently do, thereby making takeovers more lengthy, costly and their outcome more uncertain.