Hostile takeovers and defence tactics—the legal and regulatory restrictions

Copyright © 2025 LexisNexis
Published by a LexisNexis Corporate expert
Practice notes

Hostile takeovers and defence tactics—the legal and regulatory restrictions

Copyright © 2025 LexisNexis

Published by a LexisNexis Corporate expert

Practice notes
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This Practice Note, produced with input from Rebecca Cousin of Slaughter and May on market practice, discusses some of the main defensive tactics an offeree might seek to deploy when facing an imminent or actual unwelcome takeover offer and looks at the legal and regulatory restrictions on the taking of defensive action.

When a company is, or predicts that it may be, subject to a takeover offer which is, or may become, hostile, it is likely to seek to employ a number of defensive tactics to either see off the offeror altogether or to encourage the offeror to increase its offer.

Such defensive tactics or frustrating actions are limited by both law and the provisions of the City Code on Takeovers and Mergers (Code).

Code restrictions on frustrating action

The Code contains restrictions on frustrating action, which limit the extent to which an offeree may take action which may frustrate an offer without the approval of its shareholders or the consent of the Panel, and which have particular application in the context of an unwelcome

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Jurisdiction(s):
United Kingdom
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Key definition:
Defensive definition
What does Defensive mean?

An investment strategy is ‘defensive’ if it is designed to have a low level of risk (and probably will therefore also have a low expected return).

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