The Takeover Appeal Board Xchanging: Ruling of the Takeover Appeal Board (0516M)
15 Enero 2016 - 6:26AM
UK Regulatory
TIDMXCH
RNS Number : 0516M
The Takeover Appeal Board
15 January 2016
2016/1
XCHANGING PLC
RULING OF THE TAKEOVER APPEAL BOARD
Introduction
1. The principal issue on this appeal from
the ruling of the Hearings Committee made
on 18 December 2015, with written reasons
on 23 December 2015, is the interpretation
of Rule 2.6(d) of the Takeover Code, which
deals with the time by which a publicly
identified potential offeror, which is
in competition with an announced firm offeror,
must clarify its intentions in relation
to the offeree company:
"When an offeror has announced a firm
intention to make an offer and it has
been announced that a publicly identified
potential offeror might make a competing
offer (whether that announcement was
made prior to or following the announcement
of the first offer), the potential
offeror must, by 5.00 pm on the 53rd
day following the publication of the
first offeror's initial offer document,
either:
(i) announce a firm intention to make
an offer in accordance with Rule
2.7; or
(ii) announce that it does not intend
to make an offer, in which case
the announcement will be treated
as a statement to which Rule 2.8
applies.
...".
2. The appeal to the Board was heard on 6
January 2016, when the Board informed the
parties that the appeal would be dismissed,
with reasons to be given later.
Background
3. On 4 October 2015, Xchanging plc ("Xchanging")
announced that it had received separate
approaches from Capita plc ("Capita") and
Apollo Global Management, LLC ("Apollo"),
which might or might not lead to an offer
being made for Xchanging.
4. In accordance with Rule 2.6(a) each of
Capita and Apollo was required by not later
than 5.00pm on 2 November either to announce
a firm intention to make an offer for Xchanging
in accordance with the requirements of
Rule 2.7 or to announce that it did not
intend to make an offer, in which case
the announcement would be treated as a
statement to which Rule 2.8 (restrictions
on further offers or acquisitions) applied.
5. On 14 October, Capita announced a firm
intention to make an offer for Xchanging
at 160p per share in cash, which was recommended
by the board of Xchanging, to be implemented
by means of a contractual takeover offer.
6. In a separate announcement on 14 October,
Xchanging announced that it was holding
discussions with Apollo with regard to
a potential offer for Xchanging at 170p
per share in cash.
7. By virtue of Rules 2.6(b) and 2.6(d), the
time by which Apollo was required either
to announce a firm intention to make an
offer for Xchanging in accordance with
Rule 2.7 or to announce that it did not
intend to make an offer was not later than
5.00pm on the 53rd day following the publication
of Capita's offer document.
8. On 17 October Capita's offer document was
published and sent to Xchanging's shareholders.
The time by which Apollo was therefore
required pursuant to Rule 2.6(d) to announce
its intentions was 5.00pm on 9 December.
9. On 4 November Xchanging announced that
Apollo had notified Xchanging that it was
no longer interested in making an offer.
This announcement was made with the consent
of Apollo and, accordingly, Apollo then
became subject to the restrictions in Rule
2.8.
10. On 12 November, Xchanging announced that
it had received an approach from Computer
Sciences Corporation ("CSC") regarding
a possible offer at 170p per share in cash.
11. On 16 November Xchanging announced that
it had received an approach from Ebix,
Inc. ("Ebix") regarding a possible offer
at 175p per share in cash.
12. In accordance with Rule 2.6(d), and as
set out in Xchanging's announcements of
12 November and 16 November, each of CSC
and Ebix was required by not later than
5.00pm on 9 December (the 53rd day following
the publication of Capita's offer document)
either to announce a firm intention to
make an offer for Xchanging in accordance
with Rule 2.7 or to announce that it did
not intend to make an offer, in which case
the announcement would be treated as a
statement to which Rule 2.8 applied.
13. During the course of 7/8 December, the
Executive sought the views of Lazard &
Co Ltd ("Lazard"), advisers to Xchanging,
regarding the announcements which might
be made by CSC and Ebix on 9 December.
Lazard considered that, in the event that
CSC made a firm offer announcement (as
Lazard expected CSC to do), Ebix should
be required pursuant to Rule 2.6(d) to
clarify its intentions by the 53rd day
following the publication of CSC's offer
document.
14. At 7.57am on 9 December, CSC announced
a firm intention to make an offer for Xchanging
at 190p per share in cash, which was recommended
by the board of Xchanging. This announcement
stated:
"As a result of this announcement,
the previous deadline of 5.00 p.m.
on 9 December for other bidders either
to announce a firm intention to make
an offer or to announce they do not
intend to make an offer will be replaced
by a new deadline of 5.00 pm on the
53rd day following the posting of the
Offer Document.".
15. Later in the morning of 9 December, the
Executive circulated a draft Panel Statement
to the advisers to Xchanging, Capita, CSC
January 15, 2016 07:26 ET (12:26 GMT)
the request of CSC and upholds the ruling
of the Executive.
11. APPEAL
11.1 11.1 If any party wants to appeal this
Ruling to the Takeover Appeal Board ("TAB"),
it should notify its intention to do
so in accordance with the Rules of TAB
as set out on its website (www.thetakeoverappealboard.org.uk)
by 5.00 pm on Wednesday 30 December 2015.
23 December 2015
APPENDIX
HEARINGS COMMITTEE MEMBERS
The members of the Hearings Committee who
constituted the Committee for the purpose
of the Hearing were:
Present: Sir Gordon Langley Chairman
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Sir David Lees
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Lord Morris of
Handsworth
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Sir Ian Robinson
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Association for Mark Warham Rothschild
Financial Markets
in Europe
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Association of John Reizenstein Direct Line Insurance
British Insurers Group
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British Bankers' Simon Croxford Barclays Bank
Association PLC
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Institute of Simon Boadle PricewaterhouseCoopers
Chartered Accountants
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National Association Martin Mannion John Lewis Partnership
of Pension Funds
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Quoted Companies Michael Higgins Ebiquity
Alliance
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Secretary to Charles Penney Addleshaw Goddard
the Committee LLP
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This information is provided by RNS
The company news service from the London Stock Exchange
END
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