The new UK Listing Rules, effective from Summer 2024, removed the shareholder vote for significant transactions meaning established market practice for announcing M&A transactions has changed. One year on, we explore new and emerging market practice.

• An initial announcement is required on signing, with mandatory content under UKLR 7. Additional disclosure (for example, financial information for a disposal) may be included in the initial or follow-up announcement(s).
• Most issuers now make a single, comprehensive announcement when deal terms are agreed, meeting all UKLR 7 disclosure requirements. This helps avoid a period when potentially significant information has yet to be announced and should help mitigate the risk that investors are disadvantaged by a two-stage disclosure process. A further trend is for any other information to be set out in one follow-up announcement only, as soon as possible after it becomes available.
• The key exception is for Takeover Code-governed significant transactions:
  • The UKLR disclosure requirements are typically included in the bidder’s Rule 2.7 firm offer announcement, under Code requirements. Therefore, few additional UKLRs requirements need to be built into the 2.7 announcement (for example, a board recommendation). The 2.7 announcement also serves as the initial UKLRs announcement.
  • UKLRs information that was not disclosed in the 2.7 announcement is usually included in the subsequent scheme document.
• Our review of significant transaction announcements shows a range of detail, from minimalist and ‘essentials-only’ to comprehensive.
• If financial information for a significant disposal is not available at signing, or cannot be produced to the required standard, alternative forms of disclosure are permitted if accompanied by a fairness statement from the board. The FCA cautioned in PS 24/6 that ‘formulaic and highly caveated explanations are unlikely to satisfy the market’ or the FCA. Our review of these market disclosures shows announcements vary from light-touch to detailed.
• Where financial information is included in a disposal announcement, there is no longer a UK Listing Rules requirement for independent assurance.
• Market practice for risk factor disclosure is emerging. This is to address risks relating to the transaction and additional risks for the company arising in respect of the transaction.

• MAR restricts the timing and selective disclosure of inside information. With the removal of the shareholder vote, DTR 2.5.7G(5) was updated in July 2024 to clarify that an issuer may be permitted to selectively disclose details of a proposed transaction which constitutes inside information to major shareholders, even when there is no need to seek their support for a vote. This is only permitted ‘to ensure the viability of the transaction’.
• The FCA has reminded the market in Primary Market Bulletin 42 that any selective engagement must comply with MAR. In particular, in order for disclosure to be in ‘the normal exercise of the employment, profession or duties’ of the discloser, and therefore lawful and permitted, it must be reasonable, necessary and proportionate and kept confidential. It should not be simply to provide certain investors with prior notice of the proposed disclosure of inside information.
• Companies should seek specific advice before sharing information about transactions with select investors.
• The FCA will continue to monitor practice in relation to the timing of announcements and UKLRs compliance and will conduct a formal review in five years.

• Although listed companies are no longer required to enter into a mandatory relationship agreement with a controlling shareholder (30%+), voluntary use of these agreements is continuing, including on some IPOs announced in 2025. We expect it will remain the norm to retain an existing relationship agreement or, for new applicants, put one in place on an investor-driven basis.
• Where there is a controlling shareholder, a dual independent shareholder vote is still required for the election and re-election of independent directors, together with disclosures and a mechanism for a directors’ opinion on resolutions. See our July 2024 publication.

• The removal of break fees from the significant transactions category has led to an increase in their use and size. Previously these fees had in effect been capped at 1% of market capitalisation under the former Listing Rules.
• In the first year of the new regime, some transactions included a break fee in the range of 1 to 3% of market capitalisation.

• For transactions below the significant transaction threshold (where any ratio is between 5% and 25% on the Class Tests) there are no longer any UKLR announcement requirements. Disclosure obligations are governed by investor relations and the overarching MAR announcement obligation. Issuers must ensure all RNS announcements are not misleading and do not omit anything important, under UKLR 1.3.3.R.
• First, companies must assess whether the fact of there being a potential transaction constitutes inside information and whether there is a MAR obligation to announce it.
• Where there is no MAR obligation on the company to announce the matter publicly, voluntary announcements are at the company’s discretion. These must be prepared with the same level of care as any other RNS announcement and the company would want to verify it in the same way as it would any significant transaction announcement.
• The Upper Tribunal recently considered what it means for an issuer to be in breach of the predecessor to UKLR 1.3.3 (and for its directors to be ‘knowingly concerned’ in that breach). The decision underscores the need for robust internal governance (including procedures to identify and control inside information), as well as careful verification of all market disclosures to mitigate both company and personal risk. It is clear the liability of the issuer and its directors for voluntary announcements is the same as for mandatory announcements (see Box on Metro Bank decision).
• The Metro Bank decision highlighted the importance for companies of caveating figures or statements that may need future adjustment. This is increasingly reflected in announcements; for example, in the 29 August statement on the John Wood Group acquisition, the parties noted the delayed 2024 audit and stated: “Any financial information included within this announcement may therefore be subject to change pending the conclusion of the Audit.” Such language signals that disclosures may change once the 2024 accounts are published. Generally, it is advisable to consider in advance how transaction disclosures may be interpreted by the market in hindsight.