On July 27, 2021, the Financial Conduct Authority (“FCA”) published a policy statement that includes final rules amending the UK Listing Rules, and new associated guidance, applicable to special purpose acquisition companies (“SPACs”).  The new rules and guidance came into force on August 10, 2021.

The final requirements are based on the FCA’s earlier consultation launched on April 30, 2021 (the “Consultation”).  The Consultation’s proposals focused on the presumption of suspension of trading for a UK-listed SPAC that (under the prior FCA rules) would be triggered when the SPAC announced an intended acquisition. In line with the Consultation’s proposals, the policy statement outlines key investor protections (described here as ‘eligibility criteria’) that must be embedded in the structure of a UK-listed SPAC in order for it to benefit from disapplication of the presumption of suspension.

In response to market feedback received during the Consultation, the final rules and guidance also provide for greater flexibility in relation to certain eligibility criteria. The FCA has also agreed to offer supervisory support to issuers seeking assurance, prior to admission to listing, that they are within the scope of the FCA’s guidance for the disapplication of the presumption of suspension.

Please click here to read the full alert memorandum.

Welcome to our UK Public M&A round-up. Our round-up will feature select topics that highlight notable themes, trends and developments in the UK public M&A space.

Our first edition includes:

We hope you find the topics in this issue to be of interest and invite you to contact the articles’ authors or your normal Cleary contact if you have any questions or want to discuss.

For similar articles written by the authors please click here.

On 20 July 2021, the UK Government announced that the National Security and Investment Act 2021, which was passed on 29 April 2021, will come into force on 4 January 2022. This new regime for review of investments on national security grounds will be among the most wide-ranging in the world. It represents the most significant change in the UK regulatory environment since the Government ceded the power to approve or prohibit mergers on competition grounds to an independent agency in 2002.

Please click here to read the full alert memorandum.

On July 13, 2021, the Securities and Exchange Commission (“SEC”) announced a major enforcement action related to a proposed merger between a special purpose acquisition company (“SPAC”) and a privately held target company (“Target”).  This followed numerous warnings by the SEC staff over several months of enhanced scrutiny of such transactions under the federal securities laws.[1]  The respondents, except for the Target’s CEO, settled the action by collectively agreeing to civil penalties of approximately $8 million and to certain equitable relief described below. [2] Continue Reading SEC Brings SPAC Enforcement Action and Signals More to Come

As we have covered previously, one of the most noticeable trends that has emerged in the current boom in UK public M&A activity[1] is the heightened level of target shareholder opposition to bids. This is manifesting itself in a number of ways, including through increased and novel “bumpitrage”[2] campaigns as well as through institutional investors becoming more vocal in expressing their discontent at proposed bids. There appears to be a general feeling among a number of the largest UK institutional investors that private equity are acquiring UK public companies “too cheaply”. Continue Reading UK Bids: Take-Private Boom Sees Negotiating Power Shift from Target Boards to Shareholders

On June 18, 2021, the German Works Council Modernization Act (Betriebsrätemodernisierungsgesetz) entered into force.  This legislation aims at supporting and facilitating the establishment of new works councils in Germany.  In order to achieve this purpose, the new law improves, inter alia, protection against dismissal of employees who are initiating the establishment of a works council, and simplifies works council elections by expanding the possibilities for a simplified election procedure. Continue Reading Germany Changes the Legal Framework to Increase the Number of Works Councils

Bumpitrage in UK bids being implemented by scheme of arrangement. So-called “bumpitrage” refers to the intervention of a shareholder activist in a public bid to attempt to force the bidder into improving the terms of the bid. Most public bids in the UK market are implemented by scheme of arrangement. When it becomes effective, a scheme of arrangement results in the transfer of all of the shares of the target to the bidder including the shares of target shareholders who decided not to vote on the scheme or to vote against the scheme.

Please click here to read the full alert memorandum.