The Non-Frustration Rule under the City Code on Takeovers and Mergers. An Assessment of the Recent Amendments and its Future Justification

Essay from the year 2024 in the subject Law - Civil / Private, Trade, Anti Trust Law, Business Law, grade: 78.00, Queen Mary University of London, language: English, abstract: Hostile takeover bids and the options available to directors in responding to them continue to be a hotly debated issue, with different jurisdictions taking different approaches. Based on the historical experience in the UK of measures taken by target company directors to frustrate unwanted takeover bids and the economic theory of the "market for corporate control", the City Code on Takeovers and Mergers has included a rule strictly prohibiting the directors of a target company from taking any action that could frustrate a bid without the prior approval of shareholders. Recently, the Takeover Panel amended this rule for the first time. This essay examines the recent amendments and discusses whether this rule can be justified in the future.