• BHR CB issued letter re amendments to takeovers, mergers and acquisitions module under CBB rulebook volume 6 regarding Independent advice and shareholder approval.
• Follows BHR CB consultation on takeovers and mergers amendments.

Highlights

• Removed text re obtaining independent advice whether offer is in shareholder interest.
• Divergent views among board members must be stated in in offeree board circular.
• Include arguments for recommendation to shareholders re offer acceptance, rejection.
• If director has conflict of interest he must not be joined with the rest of board in views expression on offer and disclosing conflict in the offeree board circular to shareholders.
• Directors of offeree company in conflict of interest notifies offeree company’s board and their interest and must not vote on resolution to be adopted in regards of offer.
• Offeree company board should establish independent committee of board to discharge board’s responsibilities related to offer or it resides primarily with professional adviser.
• Conflict of interests includes significant cross shareholdings min with 10% between offeror and the offeree company or a number of directors common to both companies.
• Also common controlling shareholder in both companies implies a conflict of interests.
• Deleted paragraphs 2.2.11, 2.2.12, 2.2.13 of TMA Module chapter 2 of CBB rulebook.

Effectiveness

• Requirements are effective immediately, on 12 November 2023, and published on CBB website.