UK Takeover Panel Decision Could Set Global Precedent on Bid Retractions
Brigadier attempted to walk away from its bid for Moss Bros, citing COVID-19 as its reason.
May 21, 2020 at 05:54 AM
3 minute read
Credit: Moss Bros
A U.K. Takeover Panel decision rejecting an attempt to retract its takeover bid for clothing chain Moss Bros due to COVID-19 is likely to a set a new precedent worldwide, according to lawyers close to the deal.
On May 19, 2020 the Takeover Panel concluded that Brigadier Acquisition "should not be permitted to invoke any of the relevant conditions at this time" to lapse its £22.6 million offer.
The ruling is viewed as notable given the current deal climate in which other bidders may also look to retract their offers.
One corporate partner with knowledge of the situation said that it is also significant given the U.K. panel is well-respected globally and other countries, such as Australia and New Zealand, have similar systems. This means the decision could become a new precedent case for other jurisdictions as well as the U.K., the partner added.
It is important for two types of bidders, according to the partner. "The people who have already bid and think they can back out will think again, and those who are thinking to bid now will know that they will be stuck with their choice".
The last time the Takeover Panel heard a similar case was in relation to advertising agency WPP attempting to retract its bid for Tempus, following the 9/11 attacks, the partner added.
"It was held then that they couldn't walk away and now it was decided that COVID-19 was still not material enough", the partner said. "Moss Bros will now be the leading case, although it may still be appealed".
Ashurst is acting for Moss Bros with a team led by Tom Mercer and Tom Connor, having been called on when the matter when it went to the Takeover Panel.
Meanwhile, Proskauer Rose is advising Brigadier, with partner Rob Day leading.
European M&A has dropped sharply since the pandemic lockdown. But some deals have been agreed, including the £31 billion merger between mobile networks O2 and Virgin Media.
Read More:
Shearman Joins UK Trio On £31 Billion O2-Virgin Media Merger
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