UK Public M&A Update Q2 2021 Overview 14 firm offers were announced in Q2 2021 (compared to 13 in Q1 2021 and 17 in Q4 2020), with a combined offer value of approximately £10.16 billion (representing a decrease from £12.67 billion in Q1 2021). Of those 14 offers, 10 were all cash. In the last quarter, Ashurst’s global public M&A mandates included advising: • Ramsay Health Care on the final and increased £1.04 billion recommended cash offer for Spire Healthcare Group plc; • Equitix and Goldman Sachs on the $2 billion recommended cash offer for John Laing Group plc by KKR; • Rothschild & Co on the final and increased £1.27 billion recommended cash offer for St. Modwen Properties plc; • Rothschild & Co on the £70.4 million recommended cash offer for Wey Education plc; • Oxford Instruments plc on the €42 million offer for WITec Wissenschaftliche Instrumente und Technologie GmbH; • Barclays and Citigroup on the €1.57 billion hostile cash offer from CPI Property Group S.A. and Aroundtown SA for Globalworth Real Estate Investments Limited ; and • Galaxy Resources on the proposed A$4 billion merger with Orocobre Limited. A summary of the key features of each announced offer is set out in the Appendix. Announced bids 14 Recommended on announcement 12 Schemes of arrangement 12 Average of bid premia (% unweighted) 36.61% Average of bid premia (% weighted) 26.12% Contents Q2 was relatively quiet from a regulatory and legal perspective with news items covering amendments to the Takeover Code to replace gender specific terms with gender neutral terms, the appointment of Overview 1 the next Director General of the Panel (Ian Hart from UBS), and a couple of legal updates in relation to takeovers implemented by way of scheme of arrangement. News digest 2 Further details of these developments are set out in the News digest on page 2 of this publication. In addition, as noted in our 2020 Annual Update and the Q1 2021 Update, the proposed amendments Contacts 5 to the Code regarding conditions to offers and the offer timetable as set out in PCP 2020/1 and RS 2020/1 came into force on 5 July 2021, and will apply to all firm offers which are announced under Appendix: Announced UK takeover bids 6 Rule 2.7 of the Code on or after that date. Firm offers announced prior to that date (or which are in (1 April 2021 to 30 June 2021) competition with a firm offer announced prior to that date) remain subject to the rules that were previously in force prior to that date. On 28 June 2021, the City of London Law Society and the Law Society of England and Wales published specimen documents to reflect the changes to the Takeover Code. 1 Other Panel News News digest On 15 April 2021, the Panel published a revised version of the Takeover Code, reflecting amendments made by Instrument 2021/2 to replace gender specific terms with gender neutral Appointments to the Panel terms. On 15 April 2021, the Panel announced that Ian Hart had been appointed to become the next The amendments to the Code set out in Instrument 2021/2 do not materially alter the effect of Director General of the Panel. He will take up his appointment on 1 July 2021. He will be on a two- the provisions in question and accordingly the amendments have been made without formal year secondment from UBS. consultation. On 29 June 2021, the Panel announced that Tony Pullinger will retire as Deputy Director General on The amendments took effect on Monday, 5 July 2021, the same day as the amendments to 31 December 2021. He will be succeeded by James Arculus, currently Head of UK M&A at Deutsche the Code made by Instrument 2021/1 (please see our Q1 2021 Update for details of these Bank. amendments). The 13th Edition of the Code was published on 29 June 2021 to reflect the various On 30 June 2021, the Panel announced that Tamara Young had been appointed as a Secretary changes to the Takeover Code, and took effect on 5 July 2021. On 29 June 2021 the Panel Executive of the Panel. She will take up her appointment on 27 September 2021. She will be on a two-year also published revised checklists for those offers which are subject to the 13th Edition of the Code. secondment from Freshfields Bruckhaus Deringer. Re GW Pharmaceuticals PLC - votes for a proposed scheme of arrangement for the purposes of the ‘headcount’ test GW Pharmaceuticals plc (GW) made an application for an order to convene its members (the Court Meeting) for the purposes of considering and approving a scheme of arrangement. GW raised a particular question as to how a single member of the Company should be counted at the Court Meeting for the purposes of the headcount requirement in s 899(1) of the Companies Act 2006 in a situation where such member might split its vote or appoint multiple proxies. Issues arose as to how votes at the meeting should be counted because 97.4% of the existing issued share capital of GW was held in the name of a depositary. In such an arrangement, only the depositary is a registered ‘member’ who can be counted as part of the majority in number for the purposes of s 899(1), with the effect that underlying investors are disenfranchised if their different interests are not represented by the nominee holding. Snowden J concluded that the appropriate approach in this situation was: (i) to treat a holder of scheme shares that casts a vote both for and against the scheme as voting in favour of the scheme if that holder casts more votes for the scheme than against the scheme; and (ii) that otherwise the holder should be treated as voting against the scheme. This would apply whether such votes were cast directly by the member splitting its vote or by multiple proxies on its behalf. If this approach created any issues that affected the result or went to the fairness of the voting on a dissenting member, the court would be able to deal with these issues at the sanction hearing. 2 3 Re William Hill plc – information provided in the explanatory statement and Contacts non-shareholder opposition to a scheme of arrangement William Hill plc (William Hill) made a successful application for an order to convene its members For more information about any of the issues raised in this update please contact: for the purposes of considering and approving a scheme of arrangement in relation to an offer for its entire share capital by its US joint venture partner, Caesars Entertainment Inc (Caesars). The Rob Aird Partner London +44 (0)20 7859 1726 [email protected] joint venture agreement included a right given to Caesars to maintain a list of names (and add to Simon Bullock Partner London +44 (0)20 7859 3115 [email protected] or to substitute names) of potential acquirers of the Company and which gave Caesars the right to terminate the joint venture in the event of an acquisition by a party on the restricted list. Michael Burns Partner London +44 (0)20 7859 2089 [email protected] David Carter Partner London +44 (0)20 7859 1012 [email protected] The High Court rejected the opposition of HBK Investments LP (HBK) and six other entities holding derivative interests in the scheme shares to the scheme on the basis that the Explanatory Will Chalk Partner London +44 (0)20 7859 3066 [email protected] Statement (accompanying the notice of the scheme meeting given to shareholders under s 897 Nick Cheshire Partner London +44 (0)20 7859 1811 [email protected] of the Companies Act 2006) provided materially inaccurate and inadequate disclosure of the Karen Davies Partner London +44 (0)20 7859 3667 [email protected] joint venture termination rights. HBK argued that telling scheme shareholders and those affected Richard De Carle Partner London +44 (0)20 7859 3660 [email protected] by the scheme that Caesars could “periodically add to or substitute names to a restricted list” is significantly different from telling them that Caesars had the right to update its designated list of Braeden Donnelly Partner London +44 (0)20 7859 2691 [email protected] no more than six names every six months, because the former might (depending on the length of James Fletcher Partner London +44 (0)20 7859 3156 [email protected] the period) amount to a commercial veto and an effective bar upon a competing bid whereas the Bruce Hanton Partner London +44 (0)20 7859 1738 [email protected] latter might represent only a high but surmountable hurdle to the emergence of a competing bid. Nicholas Holmes Partner London +44 (0)20 7859 2058 [email protected] The High Court noted that whilst it may be material to disclose to the ordinary class member the Hiroyuki Iwamura Partner London +44 (0)20 7859 3244 [email protected] existence of a termination right in relation to a key business relationship, the relevance of the Jeffrey Johnson Partner London +44 (0)20 7859 1956 [email protected] precise terms will vary according to the class member: the ordinary shareholder would view the offer very differently to the holder of a derivative interest hoping to elicit an increased offer. No Gaby Jones Partner London +44 (0)20 7859 3661 [email protected] shareholder (except one) as at the scheme meeting aligned themselves with the objections raised Adam Levitt Partner London +44 (0)20 7859 1633 [email protected] or said that they cast their vote under a material misapprehension notwithstanding HBK’s open Tom Mercer Partner London +44 (0)20 7859 2988 [email protected] letter of invitation to do so, and William Hill’s RNS announcement of HBK’s opposition.