If a person wishes to make a takeover offer under the Code, rule 41 requires that a takeover notice is sent to the prospective target company that contains, or is accompanied by, the information specified in Schedule 1 of the Code. Clause 5 of Schedule 1 requires that all the terms and conditions of an offer be stated.

Rule 41 does not refer to rule 44(1)(e) of the Code, which came into force on 1 June 2013. Rule 44(1)(e) requires that an offer must contain a term that the offeror may not allow the offer to lapse:

(i) in unreasonable reliance on a condition of the offer; or

(ii) in reliance on a condition of the offer that restricts the target company’s activities in the ordinary course of the target company’s business during the period that begins with the sending of the takeover notice and ends on the specified date referred to in rule 25(2) (or on the latest specified date referred to in rule 25(3A), whichever is later).

A number of draft offers accompanying rule 41 takeover notices are overlooking rule 44(1)(e) and not including the required term in the draft offer.

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