The Director General of the Takeover Panel, Omar Faruqui, will be speaking alongside deals experts at the launch of an updated Corporate Finance Faculty guideline on public to private (P2P) transactions. The free, breakfast event takes place on 21 April at Chartered Accountants’ Hall and is open to ICAEW members.

Why update the guideline?

Continuing interest by private equity in taking public companies into private ownership has triggered an update to the ICAEW’s guideline. Since 1968, the rules governing public company takeovers have been dictated by the Takeover Code and overseen by the Takeover Panel, one of the City's most long-standing institutions.

The Takeover Panel is guided by its general principles, the first of which being that all shareholders are treated equally. Since ICAEW’s last P2P guideline was issued in 2021, the Panel has issued a number of practice statements. One statement on unlisted share offers, clarifies that in situations where a portion of one of the available forms of offers includes a portion of unlisted shares, all holders of the securities of an offeree company of the same class must be afforded equivalent treatment.

Growth in P2P transactions has partly been driven by depressed values on the UK stock market for certain mid-cap companies. This has prompted growing interest by private-equity buyers offering a combination of cash and paper, including so-called stub equity in the new company. But stub equity is typically illiquid, because as the term P2P implies the new company is a private company.

Some financial institutions have expressed concern because they are unable hold this form of consideration and believe that all-cash offers do not necessarily represent similar value.

David Petrie, Head of Corporate Finance at ICAEW, explains: “The Panel is there to ensure that bids have an equal value at the time of completion of the transaction. But this doesn't necessarily mean that shareholders, with the flexibility to take stub equity as proportion of their consideration will, over the longer term, receive the same total return as shareholders that accept an all-cash alternative at completion.”

The updated guideline, published by ICAEW’s Corporate Finance Faculty and authored by PwC and Travers Smith, takes into consideration these recent practice statements alongside the practical changes to the way deals are done and new ways to structure deals that have emerged since the pandemic.

The latest guideline is relevant to all advisors working with clients who are considering a public-to-private transaction, including:

• lead advisors,
• members in private equity who may be thinking of taking a company private, and
• executive and non-executive directors of companies who may be approached by private equity with a view to taking the company private.

In 2023 and 2024, AIM and main market companies saw around 50 firm P2P offers each year, marking an increase compared with previous years. 2025 looks set to match this figure, according to analysis by BDO, which expects continued private-equity interest as many companies face challenges with low-capital-market values and liquidity.

ICAEW has a long and firmly-established relationship with the Takeover Panel. ICAEW’s President Derek Blair sits on the Panel, and the Corporate Finance Faculty is regularly in dialogue with the Panel and typically responds to its consultations, leading to changes in the Takeover Code.

The launch event

The guideline launch on 21 April will open with an address by Dan Gallagher, PwC’s Head of Corporate Finance followed by a presentation by the authors of the guideline.

The event also features a fireside chat with Omar Faruqui, Director General of the Takeover Panel, outlining its views on public to private transactions, and observations on the market.

The event will close with an expert panel session featuring leading experts on public to private deals, including from Macquarie, Travers Smith and PwC. 

The event will take place at Chartered Accountants’ Hall from 08:30 to 11:30am and include breakfast.

• Find out more about the event and book your place.