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Company Law Reform Bill [HL]

We very much understand the concerns that give rise to the amendment. This area has been debated to a considerable extent. ““Mix and match”” offers give shareholders the choice to receive shares, cash or a mixture of both, or another type of consideration. I think that many people would agree that in principle a minority shareholder who has been squeezed out following a mix and match offer should have the full range of choices available to other shareholders in that offer. But the arguments are finely balanced, as was recognised by the Company Law Review. In response to further consultation, a number of technical comments were received on how the provisions would operate in practice. The circumstances in the market might have moved on since the original offer was made—the value of securities offered having gone up or down—affecting the relative attractiveness of the respective options to shareholders. Questions were asked about how elections made at the point of squeeze-out would affect elections already made in pools by shareholders. It has to be said that we do not have answers to all these questions, and we think that extensive legislative provision might be necessary to provide them. Instead, in the Bill we have taken the opportunity to clarify that where an offer of shares, or a mixture of shares and cash, is made and it is no longer possible when the offeror exercises his right of squeeze-out to give the consideration in shares, the offeror should pay the cash equivalent, irrespective of whether the shareholders had previously been offered a choice—that is, whether or not the offer was ““mix and match””. Parallel changes are made as regards sell out—in Section 430B(3A) and (4). This is precisely what the takeovers directive requires. I hope that that explains our approach and reassures the noble Lord that we have looked at this issue very seriously.