It is not often that the Takeover Panel is praised for the length of its rule book (Lex, February 24). In its early days the panel liked to compliment itself on the shortness of its rule book compared with the US Securities and Exchange Commission, relying on enforcing the “spirit” of its non-statutory principles.
These have remained largely unchanged within a lengthening rule book designed to bring some predictability to the panel’s interpretations. It has been developed in conjunction with those groups most affected and is administered by a talented executive.
It is hard not to sympathise with those who will have responsibility for administering the government’s new corporate acquisitions policy. The criteria seem likely to be highly subjective giving little scope for reliable precedent or even “lengthy rule books”. There will be much opportunity for the political lobbyists, public relations consultants and judicial review lawyers who were prominent back in the days when “public interest” was grounds for a reference to the then Monopolies and Mergers Commission.
It is important there is the maximum objectivity. Otherwise the result will be to slow the takeover process down and prolong the uncertainty, damaging the interests of the businesses involved, their employees and investors and throwing unnecessary grit into the market mechanism for helping capital find the opportunities where it can achieve the most.
London SW6, UK