POTAM
When one company launches a takeover for another, the ensuing battle can be one of all-out hostilities with hundreds of millions of pounds, the egos of megalomaniacs and proud managements at stake. In such a heated environment, the tactics being employed by the bidder and the defending party need to be kept under scrutiny to ensure they don't do anything untoward or unethical (actually, it is more likely to be the City advisers who think up the real dirty tricks).
The City's attempts to ensure fair play is the Takeover Panel, or, as it should be known, the Panel on Take-overs and Mergers (POTAM).
It was established in 1968 to oversee the operation of the City Code on Take-overs and Mergers and it now regulates the code of takeovers in the U.K. The concept was proposed by the Governor of the Bank of England and the Chairman of the Stock Exchange in response to mounting concern about practices unfair to shareholders, which had featured in a number of controversial takeovers.
Between 1968 and 2002 the Panel handled some 7,000 announced offers and, in addition, approximately half as many cases where no offer was, in the event, announced.
Although the Panel is not a statutory body, some of its rulings may carry the same force as the law. The chairman, two deputy chairmen and three other members of the Panel are appointed by the Bank of England.
The rest of the Panel is drawn from members of City institutions. The Panel has a set of rules and practice notes which companies engaged in take-overs must follow. If the rules are broken the Panel may publicly censure and refer to the regulator governing the offender.
More seriously, the Panel has the power to suspend access to the securities markets on a temporary or a permanent basis.