A real M&A headache
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Those thinking about a merger might want to make the most of the current regulatory environment after news of proposed changes to the Takeover Code.
Those thinking about a merger might want to make the most of the current regulatory environment after news of proposed changes to the Takeover Code. Joe McGrath, editor of GrowthBusiness sister title What Investment, explains.
If UK pension schemes get their way, mergers and acquisitions could become a real headache for UK companies –as proposals (if successful) will force bidders to show how a transaction affects a company’s pension scheme and its members.
The very worst scenario could result in additional reporting being required, coupled with actuarial valuations and tailored reports for members. While the consultation period has only just closed, pensions pundits have been working
the media hard to garner support for their cause, without a second thought as to how this could affect M&A activity in the UK.
At best, these proposals would make the deals a little more costly, but at worst, they could result in interested parties walking away from otherwise attractive deals and bring activity grinding to a halt at a time when it is very much needed.
Of course, we will have to wait at least a month now until we hear the findings of the Takeover Panel’s committee, but if they agree with the pensions proposals, it will affect all public companies in the UK – listed or not.
Don’t get me wrong, I am well aware of the pensions issues that we have in the UK, and yes, there have been a number of high-profile companies that have failed to honour their pensions responsibilities.
However, British businesses have enough on their plates at the moment and ‘nice-to-have’ research reports which are costly and time-consuming could have a really detrimental effect. Let’s also not forget that it is British businesses that are already being relied on to resolve the UK pensions crisis with the forthcoming National Employment Savings Trust (NEST).
By 2017, all employers will have to pay in a minimum of 3 per cent on behalf of every member of staff.
You might think that, at a time when growing businesses are being relied upon to lead this country out of the economic doldrums, certain groups would give a little more consideration to the bigger picture.
I just hope that the Takeover Panel’s review committee sees sense and kicks these proposals into the long grass – where they belong.