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1 Int'l. In-House Counsel J. 3 (2007-2008)

handle is hein.journals/iihcj1 and id is 1 raw text is: International In-house Counsel Journal Vol. 1, No. 1, June 2007, 3-8 Managing a Bid Situation GARETH R. WILLIAMS Head of Group Legal and Company Secretary, Countrywide plc, UK Whether your organisation is a bid target of a trade buyer or of a private equity fund, the demands on the legal, compliance, administrative and company secretarial functions are considerable and immediate. What steps should you take now in order to be ready for such a challenge? Set out below are some themes for in-house counsel/Company Secretaries acting for the target company in a typical public to private buy-out scenario. Conflicts of Interest In a straight bid scenario your Board will function as a unitary body evaluating the offer in the context of the interests of the Company's shareholders and other stakeholders. Its task will not be easy because the shareholders will have different priorities and many will sell their holdings to more speculative institutions attracted to the movements in the Company's share price. Enduring relationships with long- term investors will count for little once short-term investors buy in their place. The investor landscape is also changing as hedge funds who may have traditionally shied away from illiquid minority holdings are mandated to participate in stub equity investment opportunities within target companies. A management buyout scenario adds an additional dynamic to the process. The Board will in effect split into an Independent Committee which will be required to run the Company's response to the bid and which will probably be made up of the Non-Executive Directors, whilst the Executive Directors will probably be involved as principals in the buy-out. The Company Secretary would have a foot in both camps, on the one hand assisting the Company's Independent Directors (who normally have no access to in-house resources other than the Company Secretary), whilst on the other, having continued day-to-day involvement with the Executive team, including input into aspects of the buy-out proposal. It is therefore essential to be clear from the outset who your client is and where your fiduciary responsibilities lie and to maintain appropriate confidentiality and Chinese walls. Operationally, you must ensure maintenance of adequate records of the processes followed. As the professional, you are expected to maintain the highest standards of competence and impartiality. External Engagements You are likely to be involved in the appointment of lawyers, accountants, City financial advisers, corporate brokers, PR consultants, actuaries and the like. It helps to have retention arrangements and continued contact with suitable firms and individuals. You will have no time for beauty parades, or getting to know you sessions in an offer period; new advisers will have to undertake their own conflict International In-house Counsel Journal ISSN 1754-0607 print/ISSN 1754-0607 online