Tell investors about bid approaches, top fund manager demands

Apr 20, 2021

Stock market investors are being short-changed by a persistent refusal of companies to reveal when they have received credible takeover approaches, according to one of the City’s most influential fund managers.

Richard Buxton, the head of strategy at Jupiter Asset Management, told Sky News that shareholders “deserve better disclosure” than they were currently receiving from boards.

“I thought the Takeover Panel was insistent that bona fide approaches to companies from credible firms with access to resources were disclosed to the market,” he said.

“Recent examples would suggest this isn’t the case, with takeover approaches emerging in the media only after several such offers have been received.”

Mr Buxton’s remarks come after two further examples of undisclosed takeover approaches to London-listed companies were revealed by Sky News, forcing formal announcements in both cases.

On Monday, Siris Capital confirmed that it had renewed a 170p-a-share offer for Equiniti, valuing the support services company at £620m.

It was the fifth written offer that Siris Capital had tabled but the first to be publicly acknowledged, raising questions about Equiniti’s commitment to good corporate governance.

On Tuesday, Innospec, a Nasdaq-listed chemicals company, confirmed that it had lodged a bid for rival Elementis – although its statement did not come until more than six hours after the London market had started trading.

Innospec said its offer for Elementis – which made no statement of its own, in accordance with the rules – had been rejected and that it was no longer actively considering a bid.

The two situations follow a series of more prominent bid situations which corporate boards have chosen not to inform investors about.

The Times reported this week that the Takeover Panel was conducting an “informal consultation” on the issue of bid disclosures following pressure from Lord Lee, a Liberal Democrat peer.

Lord Lee, a patron of ShareSoc, has called for reforms of the disclosure regime, arguing that investors who sell shares while unaware of material information unfairly lose out financially.

“Investors deserve better disclosure, if the offeror is credible,” Mr Buxton said.

“Sterling remains cheap…so it is unsurprising that so many US firms – companies or private equity – are trawling for opportunities in the UK market.

“Companies may not know the firms approaching them, but their advisors should be able to tell them if they are credible, not hide offers from shareholders.”

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