Invoking Protective Conditions to Terminate Public Merger and Acquisition Transactions
Journal of Business Law 64. 2011
Posted: 15 Apr 2014 Last revised: 15 Aug 2014
Date Written: December 31, 2010
Bidder protective conditions (such as material adverse change clauses) are used by bidders in takeover offers of publicly listed targets, allowing them to withdraw their offers costlessly when events specified in such conditions occur. This article examines the scope and efficacy of protective conditions in UK, under the City Code on Takeovers and Mergers and case law, and compares with the regulatory positions in US and Australia. It analyses whether UK should uphold its current regulatory approach towards protective conditions, in the light of recent events.
Keywords: Material adverse change clauses, takeovers, City Code on Takeovers and Mergers, Singapore Code on Takeovers and Mergers, mergers and acquisitions
JEL Classification: K22
Suggested Citation: Suggested Citation