Takeover Panel consultation on dual class share structures, IPOs and share buybacks

We refer to the invitation to comment on the Takeover Panel’s consultation paper PCP 2021/1 on Dual class share structures, IPOs and share buybacks. We appreciate the opportunity to contribute our perspective on the suggested amendments to the Takeover Code, aiming to contribute to the well-functioning of the UK mergers and acquisitions market.

Norges Bank Investment Management (NBIM) is the investment management division of the Norwegian Central Bank and is responsible for investing the Norwegian Government Pension Fund Global (the fund). NBIM is a globally diversified investment manager with 19,754 billion Norwegian Kroner at end 2024, of which 1,137 billion (ca GBP 80 billion) invested in the United Kingdom. As a long-term investor, we support well-functioning markets that facilitate the efficient allocation of capital and promote long-term economic growth.

We welcome the Panel's intention to adapt the Code to the 2024 Listing Rules regarding companies with a dual class share structure (DCSS), IPOs and share buybacks. This will improve clarity on how the Code applies to takeover offers made for companies with dual class share structures, which might become more common in the UK market. We support the introduction of a new framework for the application of the Code to a DCSS 1 company, where Class B shares carry multiple votes per share from issuance and are extinguished or converted to ordinary upon a trigger event or sunset clause. The suggested amendments will clarify the application of the mandatory offer requirements to such companies, particularly to address situations where a shareholder might be affected and fall above the mandatory bid threshold because of a trigger event. We similarly welcome the new provisions to require additional disclosures in respect to the Code and any controlling shareholders at IPO, to enhance transparency for all on existing ownership and voting structures. Finally, we support clarifying the rules on share buybacks and amended provisions relating to “disqualifying transactions”.

We thank you for considering our perspective and remain at your disposal should you wish to discuss these matters further.

Yours sincerely,

Carine Smith Ihenacho
Chief Governance and Compliance Officer

Elisa Cencig
Head of Policy Engagement