Released 5 September 2002. Comment closed 31 October 2002.

This Policy Statement addresses the issue of ‘truth in takeovers’. It is for the guidance of market participants (bidders, targets and substantial holders) making public statements during takeover bids. Our policy considers statements that:

• in our experience are commonly made in the course of takeover bids; and
• may be misleading or deceptive.

This consultation draft policy statement amends our original Policy Statement 25 on misleading statements, published in 1992. The aim of this amendment is to update and elaborate on, rather than change the direction of, our policy since its original publication.

This Policy Statement covers:

A Last and final statements. These are statements made by market participants that they will or will not do something in the course of the bid. If a market participant intends to reserve the right to depart from its statement on the happening of an event, it must qualify its statement by reference to that event. Otherwise the market participant risks regulatory action by us for contravention of misleading or deceptive conduct provisions or an application by us or another party to the Takeovers Panel for a declaration of unacceptable circumstances.

B Making, correcting or updating statements. Bidders and targets must make, correct or update material statements during the offer period by preparing a supplementary bidder’s or target’s statement.

C Other misleading statements. We discuss some other issues: confusing or ambiguous statements; and statements by the bidder concerning the level of acceptances received.

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