THE NEED FOR DIRECT STATE REGULATION IN THE CONTEXT OF THE ‘TAKEOVER CODE’ FOR CORPORATE CONTROL IN THE UK

Abstract

The Takeover Code and Panel are integral to the regulation of mergers and acquisitions (M&As) and have a substantial role in controlling mergers and acquisitions which involve publicly traded companies in the UK. They serve to safeguard the interests of shareholders, maintain the integrity of shareholders and promote transparency in takeover processes in the UK. Therefore, undertakings somehow involved in takeover processes and bids must adhere to the Takeover Codes’ rules. In line with the Takeover Code, the Takeover Panel plays a crucial role in overseeing and enforcing the rules of the Takeover Code. However, the success of the Takeover Code and Panel is argued a lot lately. This article critically evaluates whether the historical development, substantive rules and current practice of the Takeover Panel and Code demonstrate a failure of self-regulation (market regulation). As a result, the need for direct state regulation of the market for corporate control is found. Thus, the remedy to the problem arising from the nature of the Takeover Code is searched in line with the Panel decisions, statutes and academic commentary.