Public takeovers

Typical takeover structures

The tax consequences of a public takeover will depend on how the takeover is structured, and in particular whether:

1. •

   the consideration offered to target shareholders for their shares is:

   1. ◦

      cash

   2. ◦

      shares

   3. ◦

      loan notes, or

   4. ◦

      a combination of the above

2. •

   the offer is structured as:

   1. ◦

      a contractual takeover offer—this is where the offeror company (‘bidder’) makes an offer to the target shareholders to acquire their shares in target in return for consideration (ie cash, shares and/or loan notes), or

   2. ◦

      a transfer scheme of arrangement—this is where target enters into a court scheme to sanction:

      1. ‣

         the target shareholders transferring their shares to the bidder, and

      2. ‣

         the bidder paying the target shareholders the consideration that has been offered in exchange (ie cash, shares and/or