The Takeover Code, or more formally The City Code on Takeovers and Mergers,[1] is a binding set of rules that apply to listed companies in the United Kingdom, such as those trading on the London Stock Exchange.
Many of its provisions are mirrored in the EU Takeover Directive.
[2] The Code is administered by the Panel on Takeovers and Mergers, which has the authority to enforce compliance and provide guidance on the interpretation of its rules.
The code is designed principally to ensure that shareholders are treated fairly and are not denied an opportunity to decide on the merits of a takeover and that shareholders of the same class are afforded equivalent treatment by an offeror.
The code also provides an orderly framework within which takeovers are conducted.