The regulation of takeovers concentrates on controlling directors in order to ensure that all shareholders are treated fairly.
Typically, the rules will require the target company to:
notify its shareholders of the identity of the bidder and the terms and conditions of the bid;
seek independent advice;
not issue new shares or purchase or dispose of major assets of the company, unless agreed prior to the bid, without the agreement of a general meeting;
not influence or support the market price of its shares by providing finance or financial guarantees for the purchase of its own shares;
the company may not provide information to some shareholders which is not made available to all shareholders;
shareholders must be given sufficient information and time to reach a decision. No relevant information should be withheld;
the directors of the company should not prevent a bid succeeding without giving shareholders the opportunity to decide on the merits of the bid themselves.
Directors and managers should disregard their own personal interest when advising shareholders.