FCA cracks down on takeover leaks
The Financial Conduct Authority has spoken out against a recent trend of potential takeovers being leaked, either inadvertently through hints or in a strategic and deliberate way by parties or their advisers. Examples include details of discussions between the board of a target and a potential offeror following an approach, or where the target board has rejected an approach but an increased offer is likely.
The FCA criticises the leak culture and highlighted the following points.
- Anyone leaking information about a takeover risks being investigated for market abuse (unlawful disclosure of inside information) under the Market Abuse Regulation.
- Companies and their advisers need to ensure a robust culture of secrecy surrounding inside information and active discouragement of leaks – a written policy of itself is unlikely to suffice.
- The risk of committing market abuse is in addition to the potential breach of Rule 2.1 of the Takeover Code (need for secrecy prior to announcement).
See Primary Market Bulletin 54 here.
