The Takeover Panel has recently handed down only the second cold-shoulder sanction in its history to activist investor Brian Myerson and two associates.
Myerson and his associates were found to have breached the Takeover Code by acting in concert in acquiring shares in Principle Capital Investment Trust (PCIT), and then presenting ‘a false picture’ to the panel to conceal the breach. Additionally, Daniel Posen, one of the associates, was found guilty of attempting to conceal the source of his funds.
The effect of being cold-shouldered is fairly dramatic for an activist shareholder such as Myerson. Essentially, the panel has required all Financial Services Authority-authorised firms (and therefore all banks and brokers) not to act for him in dealing in securities for a period of three years, which would clearly preclude him from undertaking any public company investments in the City. The power to stop firms acting for a cold-shouldered individual is enshrined in the Financial Services and Markets Act 2000.
Myerson has already resigned his non-executive directorship of Liberty International plc as a consequence of the sanction. He is currently involved via two PCIT funds in an attempt to change the board of D1 Oils plc and, following the release of the panel statement, D1 Oils advised shareholders to reject that proposal on the grounds that it would be inappropriate for the proposed candidates to join the board given that that Myerson ‘is a person not likely to comply with the UK Takeover Code’.
He has vowed to appeal the panel’s decision to the European Courts.
The only other cold-shoulder sanction was levied in relation to a proposed takeover of Dundee Football Club in 1992.
