Mandatory offer / Rule 9 bid meaning

A mandatory offer (a “Rule 9 bid”) is the takeover offer a person must make to all other shareholders when they cross specified control thresholds. In the UK, it is governed by Rule 9 of the City Code on Takeovers and Mergers (UK Takeover Code); in Ireland, by Rule 9 of the Irish Takeover Rules. Usage is broadly consistent across England & Wales, Scotland, Northern Ireland and Ireland. The obligation is triggered when a person, together with any persons acting in concert, acquires an interest in shares carrying 30% or more of the voting rights, or, if already holding between 30% and 50%, makes any further acquisition (creeping control). The bidder must extend the offer to holders of every class of equity share capital, whether voting or non-voting, and to holders of any other transferable securities carrying voting rights. The offer must be in cash (or include a cash alternative) at not less than the highest price paid by the bidder or any concert party in the previous 12 months, and is normally subject only to a 50% acceptance condition. The Panel on Takeovers and Mergers (or the Irish Takeover Panel) administers the regime and may, in limited cases (for example, a...