New Law Modernises Treatment of Mergers and Takeovers

05 June 2008

A new law, the Companies (Takeovers and Mergers) (Jersey) Law 200-, has been lodged for consideration by the States. This law will modernise the treatment of takeovers and mergers in Jersey, giving new statutory duties and powers to the Panel on Takeovers and Mergers. If adopted, the Minister’s intention is to appoint the existing Panel to act in relation to the takeover of Jersey companies. This will underpin the Panel’s existing role in ensuring that takeovers and mergers of Jersey companies are carried out fairly and, in particular, that the interests of minority shareholders are protected. The Panel’s rules already comply with the relevant European Union Directive and giving it this new statutory recognition will ensure that the Island’s takeover regime is recognised internationally as meeting the highest standards.

In particular, the effect of the new law would be to protect the interests of shareholders who hold a small number of shares in a company because it allows the Panel to make rules to:

• ensure that they are given equal treatment with larger shareholders, who might otherwise push through deals in their own interests;
• ensure that they are given proper information in order to make a decision on a proposed takeover or merger;
• prevent the board of a company from acting in the interests of some shareholders only; and
• ensure that the shareholders will have the final say in whether to accept a bid.

Senator Philip Ozouf, the Economic Development Minister, said, “We are delighted to bring in this new law which will create the opportunity of continuing this highly beneficial arrangement with the Takeover Panel and of putting the relationship on a new statutory footing. The Panel’s expertise in this area is second to none and plays a significant part in ensuring that Jersey remains a business friendly environment while protecting the interests of all shareholders.”

If passed, the Law will put the existing non-statutory arrangements for Jersey takeovers and mergers on a statutory basis, as well as giving the Panel some additional powers. It closely mirrors the equivalent legislation in the UK and will ensure that the Panel has consistent functions and powers in both the UK and Jersey. It is understood that the Guernsey and Isle of Man governments will also shortly be taking steps to put the Panel on a statutory footing in their jurisdictions.

For further details please contact Senator Philip Ozouf, the Economic Development Minister, or James Mews, Finance Industry Executive, on 440444.