LONDON (Reuters) - Britain’s Takeover Panel is proposing changes to the way it regulates merger and acquisition activity in the light of the UK’s decision to leave the European Union, it said on Monday.
The panel plans to scrap the rules governing companies that currently have a shared jurisdiction following Brexit in a move that means takeover offers for some firms would fall outside the UK’s tightly-regulated M&A regime.
Under the plan, bids for companies that have their registered office in a country that is part of the European Economic Area (EEA) but whose securities trade in the UK and not in that state will no longer be subject to Britain’s Takeover Code.
Takeover offers for businesses that have their registered office in the UK but whose securities trade outside the country in an EEA state will also no longer fall under the panel’s rules if that company does not satisfy a residency test.
A consultation on the proposals will run until Dec. 17, the regulator said.
It said while its Code Committee recognized that some businesses in question and their investors might prefer the code to continue to apply to them following Brexit, removing the shared jurisdiction rules was “a natural consequence” of the UK’s departure from the EU.
“The Code Committee... does not believe there is a compelling argument for the code to be amended to ensure an offer for such a company should continue to be regulated by the panel post-exit,” it said.
Reporting by Ben Martin; Editing by Jan Harvey