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U.K. Takeover Panel Concerned About `Inappropriate' EU Merger Oversight
The U.K. merger regulator said it opposed proposals to give a new European Union agency the power to monitor British takeovers.
The EU plans to create three pan-European regulators for banks, securities and insurance. The European Securities and Markets Authority, or ESMA, may be given the power to set EU standards for buyout bids or intervene in individual deals, the London-based Takeover Panel said in its annual report today.
Such a move “would be inappropriate, not least because takeover regulation must reflect company law, which still varies considerably between member states,” Gordon Langley, chairman of the panel that reviews mergers and acquisitions in the U.K., said in the report.
The panel “has devoted considerable efforts to making representations to this effect in Brussels, and with its counterparts in other member states,” Langley said. “It is hoped that, when it is finally established, ESMA will not compromise the existing framework of takeover regulation applied by the panel.”
The number of takeover bids fell to 90 from 104 in the year ended on March 31, according to the panel, which said it had a “busy” year enforcing its rules.
Rules Reviews
The regulator is reviewing its rules on shareholder voting, fees and disclosures after criticism of Kraft Foods Inc.’s takeover of Cadbury Plc. from politicians including former U.K. Business Secretary Peter Mandelson. The consultation will close next week.
Current Business Secretary Vince Cable said yesterday he would respond “very soon” to the review and that “there is a strong case for looking at the takeover regime.” Lawmakers have expressed concern that the purchase was ultimately decided by investors who were motivated by short-term profit.
The panel is considering whether the minimum acceptance for approval of a takeover offer should be raised, and whether acquiring companies should have to provide more information on the financing of takeover bids.
The regulator last week issued a so-called cold shoulder, its first in 18 years, to three investors who skirted takeover rules when they acquired 6.7 million shares of Principle Capital Investment Trust Plc. The men are banned from takeover activity in the U.K. for three years.
The regulator in May issued its first public reprimand in three years, criticizing Kraft for misstating its plans to keep a plant open as part of its takeover of Cadbury. An investment banker for Lazard & Co., which advised Kraft, dropped plans to head the agency after the censure was issued.
The panel also issued nine letters of private criticism during the year, up from eight the previous year, according to the report.
To contact the reporter for this story: Lindsay Fortado in London at lfortado@bloomberg.net.
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