By Evarist Baimu Nyaga Mawalla - Home

substantial lapse of time before the bid goes unconditional in all respects. Otherwisethose who have already accepted the bid cannot trade their stock. A contract is formedbetween the offeror and each accepting shareholder from which neither can resile. It iscommon ground that in this case, the Norton Opax bid had gone unconditional as toacceptances. Once that happens, none of these contracts is conditional on the approval ofthe panel.The applicants make three basic complaints. First they allege that in breach of theCode on Take-overs and Mergers. Norton Opax failed to increase its offer toMcCorquodale shareholders, other than core sub-underwriters to reflect the increasedconsideration paid to core sub-underwriters and the parent company of the principal coresub-underwriter for the McCorquodale shares acquired by it from them. But Norton Opaxdid not pay any increased consideration for McMorquodale shares either to the core subunderwritersor indeed to anyone else.Under the terms of the underwriters agreements, the success of the bid have the core subunderwritersthe entitlement to an increased underwriting fee, but that was no part of theconsideration for the McCorquodale shares had been assented to Norton Opax bysomeone other than a core sub-underwriter. But in any case since this point was not put tothe panel it cannot be argued here.Secondly the applicants allege that in breach of the code the Kuwait InvestmentOffice (K.I.O) acted in concert with Norton Opax in that for whatever reasons they hadan agreement with Samuel Montagu & Co Ltd . Norton Opax’s merchant banker whichgave them an incentive to see that Norton Opax’s offer became unconditional and theydid so by purchasing shares at a price 12.2p in excess of the cash price offered by NortonOpax and by assenting those share to Norton Opax. Essentially this amounts to anallegation that an agreement which which gives underwriters an interest in the success ofthe bid makes the underwriter a concert party if he purchases shares in the targetcompany.But that does not come within the definition of “concert party” in the code and it is notfor the court to make it do so now.Thirdly the applicants allege that in view of the timing of and the price paid byK.I.O in their purchase of McCorquodale shares the fact that they were purchasedthrough one of the brokers to Norton Opax and the assenting of those shares to that oerthe panel cold not properly fail to conclude that K.I.O and Norton Opax were acting inconcert, unless it misdirected itself in law by erroneously assuming that in order tosupport such a finding it would have to have found that there had been communicationbetween Norton Opax and K.I.O in connection with those share purchases.This complaint is no doubt partly based on a sentence in the report to the panel’sexecutive; “Certain of (the core underwriters) met the management for the standardpresentation during the offer in the normal way but in fact K.I.O never met themanagement at all. The applicants assume from this first that the executive regarded that148