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Case: R v Panel on Takeovers and Mergers ex parte Datafin Plc [1987] QB 315

Brief Facts: Panel on Takeovers and Mergers is an unincorporated association without any
legal personality. It has no statutory, prerogative or common law powers. But those who
indulge in the matters relating to takeovers must comply with the Code on Takeovers and
mergers. It is a self-regulatory body.
McCorquodale[MC] is the target company here. Norton Opax [NO] is the acquirer. Datafin is
a company who have announced a competing offer.
March 1986 – NO announced their original offer to acquire MC, but the offer lapsed when the
offer was referred to the Mergers and Monopolies Commission [MMC] that the offer was
against the public interest.
24 September 1986 – MMC decided that the offer was not against public interest and NO can
proceed with the offer.
25 September 1986 – NO issued a final offer (2 New NO Ordinary shares for 1 MC share). At
that point of time 1 MC share was 290p. In addition to that NO had a underwriting agreement
by Samuel Mont… of 260p/share.
The Board of MC advised to reject the offer.
01 November 1986 – Competing offer by Datafin – 300p/share.
06 November 1986 – NO increased its offer – 7 NO shares for 3 MC shares. NO share value at
that point of time 340.7p. NO had a underwritten agreement of 303.3p/shares.
Datafin then increased their offer to 310p/share and then to 315p/share.
During this time, Maxwell acquired a substantial shares in MC (22%). He also commited his
shareholding to NO’s offer on the condition that if NO’s offer failed his shareholding would
be assented to Datafins offer.
KIO is an investment company. It authorised its employee to buy 2.4mn shares of Sunlife in
MC at 315.5p/share on 17 November 1986, immediately after Datafin’s final offer of
315p/share. KIO assented those shares to NO.
20 November 1986 – NO had acquired 50.2% shares of MC.
The Code contains rules which prevent an offeror from buying shares at prices higher than that
contained in his offer without revising that offer upwards to match those prices and which also
prevent him increasing any offer which has been made on the expressed basis that it would not
thereafter be increased.
These rules would be ineffective if, while the offeror was subject to restrictions upon his
conduct, his servants, agents or those acting in collaboration with him remained wholly free to
take whatever action they thought fit.
So the offeror and its concert parties cannot acquire shares at a higher price than what is in its
final offer.
Datafin alleged that the KIO and NO are concert parties and they acted in concert to purchase
the shares and cooperate through the acquisition of shares in MC and since they were concert
parties KIO couldn’t have acquired shares at higher price as per the provisions of the code.
Datafin had complained to the panel and the panel had decided in favour of NO as there was
no active evidence/agreement to indicate that NO and KIO were concert parties.
There were two issues before the court:
1) Factual issue: whether there was concert b/w NO and KIO?
2) jurisdictional issue: whether the decision of the Panel can be subject to judicial review or
The court also held the same that there was no evidence to indicate that NO and KIO acted in
concert to gain the control of the company.
Regarding the jurisdictional issue, the court held that since the panel is performing a public
function (since its decision can affect many individual shareholders of the company) it is
amenable to judicial review.

I would like to divide the project into three parts. First one will set out the facts and the decision
of the court. The second part I have thought about discussing the UK Takeover code and its
inclusion in the 2006 Companies Act. In the third part, I have thought about discussing the
SEBI Takover code, 1997 and 2011 in comparison with the one in the UK.