The regulation of takeover bids in the UK: An evaluation of provisions for employee involvement

Abstract

This article evaluates the provisions for information disclosure to employees contained in the UK Takeover Code, following the implementation of the Directive on Takeover Bids (2004/25/EC) in 2006 and further amendments resulting from the Kraft/Cadbury takeover in 2010, among other developments. It contrasts information and consultation (I&C) provisions across other EU directives on employment relations and emphasizes that the Takeover Bids Directive restricts itself to information disclosure, allowing employees merely to append their opinion to the offeree board circular. Detailed analysis reveals that very few opinions have actually been given over the past 12 years (2006–2017 inclusive), and of these almost one-third complain about lack of information. These empirical findings highlight the weakness of the UK provisions, and the article concludes by proposing areas where further regulatory reform might strengthen I&C in the takeover process.