How is a corporation's taxable income assessed in a jurisdiction you arc familiar with? What tax benefits are available to corporations?

for more information on Corporation Tax in the UK, go to HM Revenue and Customs at". www.hmrc.gov.uk/.

Professional Eng/isb in Use Law

fMk Mergers and acquisitions

Mergers and acquisitions

Steve Jakes is a senior partner in a law firm and specialises in

mergers and acquisitions. He's talking to a client from Japan.

The London Stork Exchange

'A merger or takeover occurs when one company has acquired the majority, or even the entirety, of the shares of the target company. Statutory schemes of arrangement of companies are contained within the Companies Act. In the conventional non-statutory situation, the acquiring company, or offeror, usually makes an offer ro acquire rhe shares of the target company, the offeree, and gives the shareholders a fixed rime within which to accept the offer. The offer is made subject to the condition that it will be only be effective in the event that a specified percentage of the shareholders accept the offer. The price offered for the shares is usually more than would ordinarily be obtained at that point in time for those shares on the stock market. This constitutes the takeover bid. Of course, if the board of directors doesn't recommend the offer to its shareholders, it's regarded as a hostile takeover.

The freedom of companies to merge in this way is controlled by various scatutcs, European Community (EC J) competition authorities (known as antitrust regulators in the US), and the courts, which regulate anti-competitive concentrations of market power. If a merger is permitted, clearance is given by the regulatory authorities."

Dealing disclosure requirements

'The conduct of takeovers is controlled by rules set by the City ("ode on Takeovers and Mergers. The Code is administered by the Panel of Takeovers and Mergers, an independent body which draws its members from major financial and business institutions. UK registered and resident public companies have to abide by the Code. Disciplinary action may resulr from certain breaches of the Code, for example failing to disclose dealings in relevant securities of the offeree company. The guiding principles behind the Code are that shareholders are treated fairly and are not deiued an opportunity to decide on the merits of a takeover, and that shareholders of rhe same class are afforded equivalent treatment by an offeror."

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Professional English in Use Low

Complete the table with words from A opposite and related forms. Put a stress mark in front of the stressed syllable in each word. The first one has been done for you.

Verb Noun Adjective
a 'cq u ire	acqui'srtion
compete
regulate

Complete the article with words from the table above and A opposite. Pay attention to the grammatical context. There is more than one possibility for one of the answers.

Linde offers f 138m to ease delay in BOC bid

Linde has offered to pay BOC Group shareholders up to £138.4 million in compensation if anti-trust

(1).......................... delay the German group's

(2)........................... approach. In a move

designed to allay fears that regulators could

block Linde's £8.2 billion (3).................................. for

BOC, the German suitor said that it would pay
up to 27p per ROC share if it had not received
(4)........................... clearance in Europe and America

by July 26. The cash promise is supposed to partly cover the interim dividend that BOC shareholders would have otherwise received around July or August if their company had remained independent. Neither

Linde nor BOC expect (5)........................... objections

to their proposed (6)............................, although they

have given warning that the deal is unlikely to be completed until late summer. They expect regulators to sign off on the deal by the end of May.

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The Times

Steve Jakes is answering a client's enquiry about the rules on dealing disclosure. Complete this extract from his email. Look ar A and В opposite to help you. Pay attention to the grammatical context.

Dear Jan,

You asked about dealing disclosure rules in takeovers. Below is a summary of rule 8.3 of the

City Code on Takeovers and Mergers, which everyone must (1).......................................................................

or risk disciplinary action.

'Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the "Code"), if any person is, or becomes, "interested" (directly or indirectly) in 1% or more of any

class of "relevant securities" of [the offeror or of] the (2)................................................ company, all

"dealings" in any "(3)................................................................ " of that company (including by means

of an option in respect of, or a derivative referenced to, any such "relevant securities")

must be publicly (4).................................. by no later than 3.30 pm (London time) on the London

business day following the date of the relevant transaction. This requirement will continue

until the date on which the (5)....................................... becomes, or is declared, unconditional as to

acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of [the

(6)............................ or] the offeree company, they will be deemed to be a single person for

the purpose of Rule 8.3.'

Over Jco ipu

How are shareholders' interests protected during takeovers in a jurisdiction you are familiar with? In your opinion, are takeovers adequately regulated, over regulated or under regulated?

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