• AST TO Panel issued revised Guidance note 7: deal protection (previously named Lock-up devices), revised Guidance note 19: insider participation in control transactions.
• This is the fifth issue as well as third issue of the guidance notes, respectively.

Context

• AST TO Panel issued consultation papers re proposed amendments to both of these guidance notes on 14 December 2022 - re GN 7, AST TO Panel received 9 submissions.
• In addition, in relation to GN 19, AST TO Panel said it received 7 submissions.

Other Information Published

• AST TO Panel also published its Public consultation response statement - guidance note 7 - deal protection; in addition, published its Public consultation response statement - guidance note 19 - insider participation in control transactions (both of 8 August 2023).
• Each of these attaches annexures which show mark-ups highlighting various changes.

Deal Protection

• GN 7 explains that this guidance note has been prepared to assist market participants understand AST TO Panel's approach to deal protection devices sought by bidders.
• It applies to takeover bids, and schemes of arrangement, and any other transactions.
• Namely any other transactions that affect/are likely to affect control/potential control of a firm or the acquisition or proposed acquisition of a substantial interest in a firm.
• Principles discussed in GN 7 apply to any deal protection arrangement which has the effect of fettering the actions of a target; generally, the principles are relevant regardless of if arrangement is entered into re a non-binding or binding proposal.

Insider Participation in Control Transactions

• GN 19 has been prepared to assist market participants understand AST TO Panel's approach to situations where there is involvement or potential involvement by an insider (defined in GN 19) with a bidder in a takeover bid or potential bid for a target.
• States this GN 19 applies to takeover bids, schemes of arrangements as well as to any other transactions that affect or are likely to affect the control or potential control of a firm or the acquisition or proposed acquisition of a substantial interest in a firm.
• AST TO Panel's primary concern in those situations are to ensure consideration by the target board and management of the bid, and any competing proposal, is undertaken free from any actual influence, or appearance of influence, from participating insiders.
• In addition, other primary concern is to ensure disclosure of target firm confidential information to the bidder or potential bidder is subject to appropriate controls.
• Policy bases for GN 19 are insider participation in control transaction should not inhibit acquisition/control over voting shares taking place in efficient, competitive, informed market; and shareholders, directors being given enough data to assess proposal.