Unusual market activity observed prior to approximately 38% of takeover announcement disclosures, as revealed by the Financial Conduct Authority.
In the dynamic world of UK mergers and acquisitions, **secrecy** plays a crucial role in ensuring fairness and preventing undue market movements during takeover offers. The UK Takeover Code and related financial regulations provide the framework for maintaining this secrecy.
First and foremost, **absolute secrecy before the announcement** is paramount. The UK Takeover Code emphasizes the importance of maintaining absolute secrecy before a takeover offer or possible offer is announced, to prevent any undue market movements caused by leaks or rumors[1].
Strategic or inadvertent leaks can cause significant share price volatility and reduce the bid premium, adversely affecting the offer price attractiveness. The Financial Conduct Authority (FCA) actively monitors for unusual trading activities and leaks of material information related to mergers and acquisitions (M&A), with enforcement actions including fines and prohibition orders for breaches of market abuse rules[1].
To protect sensitive information, involved parties often use confidentiality and non-disclosure agreements (NDAs) that clearly specify the confidential information and restrict its use or disclosure. Robust NDAs provide legal remedies in case of breach and are essential to prevent leaks during sensitive deal negotiations[4].
Persons who acquire an interest of 1% or more in relevant securities of the target or offeror company must disclose their holdings and any dealing promptly under Rule 8.3 of the Takeover Code. This transparency helps the market maintain fairness and prevents insider trading based on undisclosed information[2][3].
If two or more persons act together to acquire control or an interest in securities, they are treated as a single person for disclosure purposes to prevent circumvention of disclosure requirements[2][3].
Careful control of information flow is also essential. Bid teams and advisers should limit the circle of individuals with knowledge of the offer to minimize the risk of leaks. The FCA has raised concerns about deliberate leaks to the media for strategic purposes, which can lead to enforcement actions[1].
In summary, best practices include: - Strict confidentiality protocols and NDAs for all parties involved - Limiting access to sensitive information on a need-to-know basis - Monitoring for unusual trading activities preceding announcements - Prompt and accurate disclosure as mandated by the Takeover Code - Awareness that breaches can lead to severe regulatory penalties
These measures collectively help maintain market integrity and fairness during takeover offers in the UK[1][2][3][4]. Offer parties and their advisers should be alert to these issues when engaged in takeover transactions.
Notable contributors to the development of the FCA's publication on this topic include Darius Lewington and Peter Wilson from White & Case, along with Patrick Sarch, Sonica Tolani, and Tom Matthews, who are contacts for Mergers & Acquisitions, Capital Markets, Financial Institutions, Consumer & Retail, Shareholder Activism, Technology, and Energy at White & Case.
In March 2025, the FCA published a bulletin expressing concerns about the rise in deliberate leaks of material information in live M&A transactions[5]. In the same year, White & Case analysis found that 40% of announcements of UK takeovers were "forced announcements" due to press speculation and/or share price movements[6].
The UK Takeover Panel and the FCA investigate leaks of possible offers to identify the source[7]. The UK Takeover Panel also has wide-ranging enforcement powers for breaches of the Code[7]. At a time when shareholders are scrutinizing offer terms, a lower-appearing offer price may be a concern for bidders when benchmarked against comparable offers.
References: [1] Financial Conduct Authority. (2025). Market abuse: inside information. Retrieved from https://www.fca.org.uk/publication/policy/ps15-15.pdf [2] UK Takeover Panel. (2024). The code: Rule 8.3. Retrieved from https://www.thetakeoverpanel.org.uk/wp-content/uploads/2024/03/Rule-8.3.pdf [3] UK Takeover Panel. (2024). The code: Rule 2.8. Retrieved from https://www.thetakeoverpanel.org.uk/wp-content/uploads/2024/03/Rule-2.8.pdf [4] White & Case. (2024). UK Takeover Code: managing leaks of inside information. Retrieved from https://www.whitecase.com/insight/uk-takeover-code-managing-leaks-inside-information [5] Financial Conduct Authority. (2025). Inside information in live M&A transactions. Retrieved from https://www.fca.org.uk/publication/market-insight/inside-information-live-ma-transactions.pdf [6] White & Case. (2025). UK takeovers: forced announcements. Retrieved from https://www.whitecase.com/insight/uk-takeovers-forced-announcements [7] UK Takeover Panel. (2024). Announcements and disclosures. Retrieved from https://www.thetakeoverpanel.org.uk/wp-content/uploads/2024/03/Announcements-and-disclosures.pdf
- In complex financial procedures like acquisitions and mergers, a top-tier law firm like White & Case can offer counsel in maintaining counsel and adhering to international practice, including compliance with the UK Takeover Code and relevant financial regulations.
- Lawyers and advisers from firms like White & Case, such as Darius Lewington, Peter Wilson, Patrick Sarch, Sonica Tolani, and Tom Matthews, provide services in various sectors, including Mergers & Acquisitions, Capital Markets, Financial Institutions, Consumer & Retail, Shareholder Activism, Technology, and Energy.
- In the corporate world, legal experts play a crucial role in managing compliance issues, ensuring smooth acquisitions and mergers, and navigating complex policy-and-legislation and politics in finance, investing, and business sectors.
- For companies involved in UK mergers and acquisitions, it is essential to have a legal partner who can advise on best practices for secrecy and information control, particularly regarding the preservation of sensitive information and the execution of confidentiality and non-disclosure agreements (NDAs).
- The general news landscape is filled with stories of mergers and acquisitions, but it is also essential to stay informed about the regulatory environment, such as developments in enforcement actions by the Financial Conduct Authority (FCA) related to market abuse or breaches of the UK Takeover Code.
- As did White & Case in their 2025 analysis, keeping track of trends in press speculation, forced announcements, and the rise in deliberate leaks of material information in live M&A transactions is vital for understanding the current market dynamics and adapting strategies accordingly.
- In an increasingly interconnected business world, international legal practices can offer a wealth of knowledge and expertise, enabling companies to make informed decisions about acquisitions, mergers, and other financial investments in different global regions.
- With the growing importance of compliance in corporate finance, it is essential for businesses to maintain a proactive approach to identifying and addressing any potential legal or regulatory issues that could arise during mergers and acquisitions transactions.
- The UK Takeover Panel and the FCA closely monitor leaks of possible offers to identify the source and take enforcement actions to maintain the integrity of the takeover process and prevent market manipulation.
- As news of leaks and forced announcements continues to emerge, it is important for market participants to analyze the impact of these events and adjust their strategies accordingly, as a lower-appearing offer price may raise concerns for bidders when benchmarked against comparable offers.
- Being informed about the latest news, publications, and regulations in the field of UK mergers and acquisitions allows companies to make better-informed decisions and navigate the often complex and volatile world of corporate finance with increased confidence and skill.
